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I'm waiting for exhaustion selling on a large kangaroo tail like we saw in August then I'm back in. The fundamentals on the Li are stuff that dreams are made of.
ADY - Admiralty Resources
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Yep. I've been following ADY for about 3-4yrs. As a diversified chemical producer it will do very well. A number of projects all at significant value add points. I was waiting until after the demerger to get onboard again but if there is a nice selloff that will do fine as an entry point.
Interestingly one of the best performing stocks in USA in 07 was a fertiliser producer.
Interestingly one of the best performing stocks in USA in 07 was a fertiliser producer.
the august sell-off or panic was caused very much by that the closure of the futures exchange rather than normal trading behaviour.
so, whilst the potential exists for us to revisit the august lows this move downwards seems to be taking a long time
these prices are a bargain for ADY and i think anyone who was smart to get off at the high 0.5 and waited to re-enter is being rewarded handsomely.
MS+Tradesim, do you think there would have been an advantage waiting till after demerger before entering ADY or RLL - assuming the SP was trading @ .5 before it?
so, whilst the potential exists for us to revisit the august lows this move downwards seems to be taking a long time
these prices are a bargain for ADY and i think anyone who was smart to get off at the high 0.5 and waited to re-enter is being rewarded handsomely.
MS+Tradesim, do you think there would have been an advantage waiting till after demerger before entering ADY or RLL - assuming the SP was trading @ .5 before it?
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This time around I'm thinking I'll see exhaustion selling across a number of stocks as first, the panicky exit once USA recession reality hits in, then second the smart buyers will step in when enough is enough and push prices back up. Historically, the US market falls on average 28% in a recession. I think it would be naive to assume that won't happen this time and that such a fall won't affect Australian equities.
nikki,
I exited ADY soon after the demerger ann. as I could not price the two new companies. I had originally been holding ADY on a target of $2+ (pre-consolidation) in 2009 onwards. Once the cost base for the demerged cos. is known and I can assign new values and figure cash flows etc, I will be in a position to price and then buy accordingly. Until that info is known, there is too much uncertainty for me right now. On the other hand in a large sell-off, it won't matter much as I will be able to enter at a great discount and profit whatever happens.
nikki,
I exited ADY soon after the demerger ann. as I could not price the two new companies. I had originally been holding ADY on a target of $2+ (pre-consolidation) in 2009 onwards. Once the cost base for the demerged cos. is known and I can assign new values and figure cash flows etc, I will be in a position to price and then buy accordingly. Until that info is known, there is too much uncertainty for me right now. On the other hand in a large sell-off, it won't matter much as I will be able to enter at a great discount and profit whatever happens.
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OK, I'm back on board. Since selling out at .50, I am happy to grab some now at .335. Time to hold and wait now
rub92me
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Still on the sidelines myself. The way this has been going down (steadily) leads me to think that it could go down a bit further before it turns for the better. Like MS+ Tradesim I would ideally want to see a quick sharp sell-off on high (15 million plus) volume. It doesn't always happen that way of course so I could miss the boat. If it drops to 30 cents over the next few days then I may get tempted regardless and jump in with a trade. We should see some news soon on the Lithium, however in the past good news seemed to be anticipated in a rising shareprice before the announcements happened...OK, I'm back on board. Since selling out at .50, I am happy to grab some now at .335. Time to hold and wait now
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With Citi and Merrill Lynch reporting massive writedowns as well as some key economic indicators in the USA due this week, I believe we are not far off some very painful price slashing. I really hope you guys aren't hurt. I am however, looking forward to a juicy entry.
MS+Tradesim,
i am still holding (very long-term) and not suffering in the short term (too much anyway).
my take is that if the DJIA breaks 12500 we should all take cover and i might even consider selling @ a loss because the next real support is in the 11000's (bottom ranges).
it is consolidating between 12500-12925 at the moment and i would not be buying anything (short term) unless it breaks resistance @ 12925.
so, good luck and maybe you can have my shares if the DJIA breaks support @ 12500
i am still holding (very long-term
) and not suffering in the short term (too much anyway).my take is that if the DJIA breaks 12500 we should all take cover and i might even consider selling @ a loss because the next real support is in the 11000's (bottom ranges).
it is consolidating between 12500-12925 at the moment and i would not be buying anything (short term) unless it breaks resistance @ 12925.
so, good luck and maybe you can have my shares if the DJIA breaks support @ 12500
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This is pretty insane, no change in fundamental but more than 30 percent fall in less than a month is this stock still a good prospect for the mid term i.e. 1 year
rub92me
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How come ADY is not trading? I don't see any ASX announcement. Good timing for a trading halt. Unusual to be PRE_NR for so long.
Unusual to be PRE_NR for so long.How come ADY is not trading? I don't see any ASX announcement. Good timing for a trading halt.
ady is rumoured to be close to signing a major deal with a Chinese steel maker according to afr. this might be the reason for the trading halt. it will be interesting to see the release.
also, investers should wait for new ore price outcome in Feb/Mar. it should be significant.
rub92me
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Hi yangxh, that would be good news indeed. What's puzzling though: if this rumour is about, why has the share price been pummeled lately along with (and even worse than) the rest of the market?
hi, rub92me, I guess the day/short traders dumped their holdings along with the market. It is all about the fear. But, good news (expected and unexpected) will come soon such as this trading halt (this is unexpected). Ore price, and ady scheduled activities will bring ady share price back soon. Look at the top 20 shareholders, they control about 50% of the all shares. They are not selling.
rub92me
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Amidst all the doom and gloom in the markets, I found something to take our minds off the short term woes and think about the longer term. The below article gives yet another boost to the potential bright future of Lithium in batteries. The timing of ADY to become a major Lithium producer certainly couldn't be much better.
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ADY in preopen. Just waiting for the news release to become available. Fingers crossed. Hope it's good
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Here is the release - looking good
17 January 2008
Company Announcement Office
Australian Securities Exchange Limited
20 Bridge Street
SYDNEY NSW 2000
HIGHLIGHTS
- Admiralty is close to concluding 10 years sales agreement and funding package with
total minimum sales of 23.5 million tonnes, at 50% share of all excess production and
a loan package.
- New 100% owned subsidiary established in Chile.
- Interim FOB benchmark price increase to US $51.78 per tonne FOB, a 13% price
increase, until 2008 CVRD benchmark price announced.
- 2008 shipping contract for balance of WISCO CFR 2006 sales shipments less by
TFS Freight Services.
The board of directors of Admiralty is pleased to confirm it is close to concluding a 10 years
contract for 50% of its iron ore production from its joint venture in Cia Minera Santa Bárbara
in Chile. The other 50% has already been allocated to WISCO, Wugung Iron Steel, China’s
second largest steel producer. Contract negotiations with WISCO are being finalised around
the MOU signed in September 2007.
Admiralty is in an advanced stage of discussions with a number of parties and these
negotiations are continuing. The successful bidder is required to accept the security
arrangements.With one key buyer, legal sign off on contracts has been obtained by both
sides. Part of the iron ore package is for the buyer to assist Admiralty obtain from one of
three major trading banks interested, a total funding package of approximately US $40
million, which is the amount required to meet our short term expansion plan.
The Board has a clear preference for debt over equity at this stage, and it does not wish to
dilute shareholders with a major equity placement.
The Board confirms there are negotiations with Rizhao Steel and three other companies,
from which Admiralty will choose one. The Board wants also state the tone of the
negotiations which have a fair degree of volatility at the moment because another buyer is
involved. There may be a small placement in the iron ore sales package to accommodate
the strategic interests of two iron ore clients at a premium to the market.
Admiralty Resources Chile Limited
As a result of concluding the acquisition of a further 10% of Cia. Minera Santa Bárbara, the
Board has decided to establish its own corporate entity in Chile. Michael Clarke, Managing
Director of Admiralty Resources NL, located in Chile, is currently setting up the new office for
this operation. There are a number of key benefits of implementing this new entity, including
the cost of the loan to Cia. Minera Santa Bárbara.
Admiralty has provided interest bearing loan to Cia. Minera Santa Bárbara of approximately
US $22 million and this will be increased to approximately US $60 million in 2008 for
production expansion to achieve the next milestone of 4 million tonnes per annum.
Shipping contract for WISCO 2006 CFR Sales Contract
Admiralty and Cia. Minera Santa Bárbara signed a sales agreement with WISCO in January
2007 for 17 shipments of iron ore on a CFR basis. Six of these shipments were delivered in
2007. The contract was renegotiated with four shipments to take place in early 2008 and the
balance using the Panamax size port when it is completed.
CFS Services Director, Nick van der Hoeven, negotiated before shipment contract on behalf
of Admiralty.
Yours sincerely,
Phillip Thomas
Executive Director
17 January 2008
Company Announcement Office
Australian Securities Exchange Limited
20 Bridge Street
SYDNEY NSW 2000
HIGHLIGHTS
- Admiralty is close to concluding 10 years sales agreement and funding package with
total minimum sales of 23.5 million tonnes, at 50% share of all excess production and
a loan package.
- New 100% owned subsidiary established in Chile.
- Interim FOB benchmark price increase to US $51.78 per tonne FOB, a 13% price
increase, until 2008 CVRD benchmark price announced.
- 2008 shipping contract for balance of WISCO CFR 2006 sales shipments less by
TFS Freight Services.
The board of directors of Admiralty is pleased to confirm it is close to concluding a 10 years
contract for 50% of its iron ore production from its joint venture in Cia Minera Santa Bárbara
in Chile. The other 50% has already been allocated to WISCO, Wugung Iron Steel, China’s
second largest steel producer. Contract negotiations with WISCO are being finalised around
the MOU signed in September 2007.
Admiralty is in an advanced stage of discussions with a number of parties and these
negotiations are continuing. The successful bidder is required to accept the security
arrangements.With one key buyer, legal sign off on contracts has been obtained by both
sides. Part of the iron ore package is for the buyer to assist Admiralty obtain from one of
three major trading banks interested, a total funding package of approximately US $40
million, which is the amount required to meet our short term expansion plan.
The Board has a clear preference for debt over equity at this stage, and it does not wish to
dilute shareholders with a major equity placement.
The Board confirms there are negotiations with Rizhao Steel and three other companies,
from which Admiralty will choose one. The Board wants also state the tone of the
negotiations which have a fair degree of volatility at the moment because another buyer is
involved. There may be a small placement in the iron ore sales package to accommodate
the strategic interests of two iron ore clients at a premium to the market.
Admiralty Resources Chile Limited
As a result of concluding the acquisition of a further 10% of Cia. Minera Santa Bárbara, the
Board has decided to establish its own corporate entity in Chile. Michael Clarke, Managing
Director of Admiralty Resources NL, located in Chile, is currently setting up the new office for
this operation. There are a number of key benefits of implementing this new entity, including
the cost of the loan to Cia. Minera Santa Bárbara.
Admiralty has provided interest bearing loan to Cia. Minera Santa Bárbara of approximately
US $22 million and this will be increased to approximately US $60 million in 2008 for
production expansion to achieve the next milestone of 4 million tonnes per annum.
Shipping contract for WISCO 2006 CFR Sales Contract
Admiralty and Cia. Minera Santa Bárbara signed a sales agreement with WISCO in January
2007 for 17 shipments of iron ore on a CFR basis. Six of these shipments were delivered in
2007. The contract was renegotiated with four shipments to take place in early 2008 and the
balance using the Panamax size port when it is completed.
CFS Services Director, Nick van der Hoeven, negotiated before shipment contract on behalf
of Admiralty.
Yours sincerely,
Phillip Thomas
Executive Director
rub92me
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roland, looks like you timed your re-entry into ADY well Certainly looking likes the market likes the announcement!
Certainly looking likes the market likes the announcement!
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The ann is good news but some things to consider...
1) 4 shipments of iron ore early this year = not much income
2) Lots of debt to be taken on - not a problem if infrastructure is completed in a timely way and contracts are finalised. More delays here = larger interest cost
3) Demerger yet to happen and we still don't know how what cost base will be allocated to each share
4) Li infrastructure way behind schedule - I note in their latest presentation they're now saying Jun-Sep 09 before all ponds are ready. That is a big delay.
Previously it was meant to be 06, then late 08, now mid-late 09.
I have every confidence that it will pan out successfully but these delays mean share price doesn't grow smoothly = opportunity cost. I'm sitting on the sidelines all cashed up but I don't know how much to throw into ADY because of these factors. So back to my original plan, either sub-30c entry or wait till cost base for demerged companies to be announced.
1) 4 shipments of iron ore early this year = not much income
2) Lots of debt to be taken on - not a problem if infrastructure is completed in a timely way and contracts are finalised. More delays here = larger interest cost
3) Demerger yet to happen and we still don't know how what cost base will be allocated to each share
4) Li infrastructure way behind schedule - I note in their latest presentation they're now saying Jun-Sep 09 before all ponds are ready. That is a big delay.
Previously it was meant to be 06, then late 08, now mid-late 09.
I have every confidence that it will pan out successfully but these delays mean share price doesn't grow smoothly = opportunity cost. I'm sitting on the sidelines all cashed up but I don't know how much to throw into ADY because of these factors. So back to my original plan, either sub-30c entry or wait till cost base for demerged companies to be announced.
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