FLX - Felix Resources

[Real1ty]

The one big plus that the Aussie export coal miners are looking for is to set the prices for benchmark thermal for 2008 at US$90 per tonne and then the $Aussie to sink back to A$1.35 to the greenback.
Felix are aiming for after tax profits of around A$100 million for Y/E 2008 which should be achievable at the present exchange rate of around A$1.13 to US$. The Half Yearly result to 31st December 2007 should show that is being achieved.

noirua

I have been following this thread keenly and enjoy the discussion and views of those who keenly follow this stock, which i currently don't hold.

If i may just get slightly off topic here are you suggesting that the AU$ will retreat next year or are you saying that you think the miners are thinking it will slip back next year?

If so, and you agree with this view, could you elaborate please, as i think the opposite is a very real chance.

Cheers

 

[noirua]

noirua

I have been following this thread keenly and enjoy the discussion and views of those who keenly follow this stock, which i currently don't hold.

If i may just get slightly off topic here are you suggesting that the AU$ will retreat next year or are you saying that you think the miners are thinking it will slip back next year?

If so, and you agree with this view, could you elaborate please, as i think the opposite is a very real chance.

Cheers

Hi Real1ty, Interest rates are one of the key factors here and this is versus the low rating of the Greenback. Interest rates may not fall that much further in the States, due to inflation pressures and the Government there introducing other measures to solve the sub-prime disaster.

Australia may well have more sub-prime problems than are realised at present and the prices of many commodities may well fall back further. The need for interest rate increases may well subside.

Miners will obviously hope the Aussie will weaken, but as I mentioned, it is more likely to average around A$1.13 to the Greenback.

 

[Real1ty]

Hi Real1ty, Interest rates are one of the key factors here and this is versus the low rating of the Greenback. Interest rates may not fall that much further in the States, due to inflation pressures and the Government there introducing other measures to solve the sub-prime disaster.

Australia may well have more sub-prime problems than are realised at present and the prices of many commodities may well fall back further. The need for interest rate increases may well subside.

Miners will obviously hope the Aussie will weaken, but as I mentioned, it is more likely to average around A$1.13 to the Greenback.

Hi noirua, Thanks for your reply.

I won't go into it too much as this isn't a currency thread and i don't want to derail the thread.
Although inflation is an issue, i still think the Fed will cut next time and maybe one more, while we have quite large inflation issues here which will see more hikes next year.
I feel this is where we might get support for our dollar but it is very hard to predict and there are many other issues involved.
The miners will certainly be hoping you are right

Felix are a very tightly held company but with excellent prospects.
You seem quite confident when they report it will be very encouraging and that mixed with higher contract prices virtually guaranteed, this should provide the possibility of good sp appreciation.

Of course the risk to this will probably be the actual sentiment in the market due to the credit fallout, which i am sure we are going to hear a lot more about.

Very enjoyable and informative thread.

 

[noirua]

The following link to a Meekatharra Minerals (later Auiron Energy and Felix Resources) announcement on 25/1/1999, gives details of the companies, THEN, 85% interest in gold holdings in Indonesia.
These holdings were due to be floated on the TSX but events following the Bre-X collapse brought this C$300 million float prospect to a close.
It is thought that Felix Resources still have royalty rights over the gold holdings or should have: http://stocknessmonster.com/news-item?S=FLX&E=ASX&N=176389

 

[noirua]

Felix have made headway this morning at $8.00, up 36 cents, but in meagre trading.

This light trading in this very tightly held stock has prevented FLX from entering the ASX 200, despite the market cap being easily high enough to achieve that.

The stock price has been advantaged, up to now, by these large holders having 70% of the shares, but it is now held back by this, due to a hostile bid having hardly any likelyhood of succeeding as it would have to be between $10 and $12 a share, IMHO.

AMCI, 19.12% holders, are a private American coal outfit and look more interested in expanding Felix than agreeing to a bid for its shares.
The rest of the holders are former White Mining shareholders and these companies are interested in running the Ashton coal mines, Moolarben Project, Harry Brandt and the UCC interests as well.

A lot of UK holders have held on through thick and thin and rarely ever trade and that includes a few German and Irish shareholders in the same position.

Interesting in many ways, as Felix have good operating mines at Yarrabee with expansion in the future at Yarrabee North; Minerva with the massive 560 million tonnes of coal ( inferred) at nearby Athena; Ashton open-cut and longwall mines; Moolarben low cost open-cut and underground future mines; and in the future, Harry Brandt Project and UCC Project.

 

[noirua]

"Korean consortium joins Moolarben": http://www.asx.com.au/asxpdf/20080102/pdf/316rnjn7mn0hcq.pdf


Korean consortium pays $90 million plus 10% of development costs for 10% stake in Moolarben: Agrees to take 2.8 million tonnes of 17% ash coal, each year, at market price for the life of the mine.

 

[michael_selway]

"Korean consortium joins Moolarben": http://www.asx.com.au/asxpdf/20080102/pdf/316rnjn7mn0hcq.pdf


Korean consortium pays $90 million plus 10% of development costs for 10% stake in Moolarben: Agrees to take 2.8 million tonnes of 17% ash coal, each year, at market price for the life of the mine.

Hm it seems everyone wants a peice of FLX, eventually it will gettakenover in full one would suspect

thx

MS

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.8 21.5 35.8 54.5
DPS 6.0 3.9 19.0 12.7

 

[noirua]

"Moolarben Leases and Exploration Licenses": http://www.asx.com.au/asxpdf/20080102/pdf/316rv4j92xl4bn.pdf

Two new exploration Licences awarded at Moolarben and future announcement will upgrade reserves. Underground mine awarded two mining licences.
Shallow depth coal seam found on Ulan seam.

 

[Reefer]

Not much negative news coming out of the Felix camp at the minute Noirua!
Just need to get the bl**dy court case behind us and I think we will see a real appreciation in the share price. Looking forward to the half yearly accounts which should give us a good spurt.
It is a strange stock at times though, and extremely volatile which is probably a reflection of the tightness of the register. I feel your $10 to $12 takeover price may look undervalued before too long.

 

[noirua]

Not much negative news coming out of the Felix camp at the minute Noirua!
Just need to get the bl**dy court case behind us and I think we will see a real appreciation in the share price. Looking forward to the half yearly accounts which should give us a good spurt.
It is a strange stock at times though, and extremely volatile which is probably a reflection of the tightness of the register. I feel your $10 to $12 takeover price may look undervalued before too long.

Hi Reefer et al, It looks as if Felix are managing to carry on regardless and try and forget the court cases pending: http://mudgee.yourguide.com.au/articles/1155926.html?src=topstories

Felix stock continues to move on very light trading, 196 million shares in issue and most sitting on them. Felix trade at $8.07, up 30 cents, in meagre trading, volume 13,817 shares traded in 90 minutes.

 

[Reefer]

Volume 13,817. Number of trades is 58 = average trade of 238 shares. Been trading like that for months with a few larger trades pushing up the daily average, but miniscule trades dominating. Is it brokers accumulating or just a reflection of the number of small holdings? I would think the brokerage would be a killer if you traded in such small quantities, unless of course you were not subject to it.
I feel someone is quietly accumulating out there, though there have been no substantial holding announcements. Got me puzzled.

 

[noirua]

Coal being shipped out of the Gladstone Port, RG Tanna terminal, QLD, in January 2008.
From the Yarrabeee Mine (100%) = 113,600 tonnes
From the Minerva Mine (55%) = 264,480 tonnes

Estimated Yarrabee sales for Y/E June 2008 at 1.8mtpa, 150,000 tonnes per month.
Estimated Minerva sales for Y/E 2008 at 2.5mtpa, 208,333 tonnes per month.

 

[haemitite]

Wonder if they are having a good hard look at RSP

I hold both, now that FLX has a strategic position in port capacity M&A should be on the cards

 

[noirua]

Thermal (benchmark) coal reaches US$91.77 a tonne, excluding shipping costs.

More details on the Korean consortium purchase of a 10% interest in Moolarben: http://www.globalcoal.com/news/coalnews.cfm

 

[noirua]

Felix Resources have now fallen over 15% from their $8.70 high, not long ago. Always the bid factor in this stock and trying to work out full value on future prospects at Moolarben.

A$180 million has been paid, or will be paid, for two 10% stakes in Moolarben and A$70 million of the A$350 million for the development of the open-cut and underground mines at Moolarben. This leaves A$210 million to be paid for by Felix and includes the compulsory purchase of land.

A few think the deal with the Korean consortium was done too cheaply at A$90 million, as A$100 million was spoken about earlier on. Perhaps the taking of 2.8 mtpa of coal throughout the lifetime of the mine was a factor.

There are still the court cases outstanding, brought by Ulan Coal (90% Xstrata and 10% Mitsubishi), and if these are found in favour of the NSW Government and Felix, there will still be the matter of compulsory purchase of Ulan's land, that covers 20% of Moolarben.

Will Felix do a deal with Xstrata at the last minute and allow them 20% of Moolarben for a reduced payment? Maybe only around A$100 million, plus A$70 million towards development costs.
That would leave Felix only having to find A$40 million to develop the mine. ( Or if you take into account the A$250 million due/paid from Sojitz and the Korean consortium: Then Felix would have covered the whole cost of Moolarben development with A$70 million over and a 60% stake).
However, this could lead to having to revalue Felix on potential asset value and future profits, with only a 60% stake in Moolarben. The risk factor for FLX would move to almost zero at the same time.

Felix at $7.30 a share have a market cap of A$1.43 billion.
The present value of Moolarben is put at A$900 million plus A$350 million development costs. ( Felix at present own 80% of Moolarben with a further A$160 million due from Sojitz and the Korean consortium, plus A$70 million development costs.) The value will probably be enhanced when Moolarben is completed in 2010.

Felix own 100% of the Yarrabee mine and Yarrabee North tenement. 51% of Minerva and the Athena tenement. 60% of the Ashton coalmines. UCC Project and Harrybrant anthracite tenement. Felix also have other interests in South Australia.

 

[noirua]

"Macquarie, UBS up 2008 thermal coal price outlook": http://uk.reuters.com/article/oilRpt/idUKSYD14320080114

Half Yearly Report for Felix is due out this Friday 18th January.

 

[Reefer]

China coal shortage to continue
Wednesday Jan 16 08:17 AEDT
China, the world's largest coal consuming nation, used more coal than it produced in 2007 and will stay short through at least 2010, a coal industry official said on Tuesday.

China's demand for coal is expected to rise to 2.76 billion tonnes in 2008, from 2.62 billion tonnes in 2007, said Wu Chenghou, executive director of the Coal Sale and Transportation Association of China.

Wu estimated China produced 2.58 billion tonnes of coal in 2007, slightly above an estimate of 2.52 billion tonnes issued by the State Administration of Work Safety.

He did not comment on whether the country had drawn down coal stocks in 2007 to remain a net exporter, despite producing less than it consumed. China has not yet issued official output data for 2007, and often revises that figure several times.




Customs data released Tuesday showed the country's net exports of coal fell sharply to 2 million tonnes in 2007, compared with net exports of 25.1 million tonnes in 2006 .

By 2010, China's coal consumption will reach 3.06 billion in 2010, up 10 per cent compared with last year, more than will be satisfied by domestic production of between 2.9 billion and 3 billion tonnes, Wu told reporters at an industry conference.

Coal output in 2008 could be reduced by a number of factors, including a crackdown on mines that are unsafe, polluting or wasteful of energy, Wu said.

Some mines could also be closed during the Olympic Games in Beijing in August.

That could cause regional shortages in 2008, Wu said without further specifying. He did not give an output estimate for 2008.

During last year's meeting of the ruling Communist Party, some mines were shut and local media attributed the decision to an effort to avoid embarrassing fatalities from mine accidents, which caused an average of 10 deaths a day in 2007.


©AAP 2008

 

[michael_selway]

China coal shortage to continue
Wednesday Jan 16 08:17 AEDT
China, the world's largest coal consuming nation, used more coal than it produced in 2007 and will stay short through at least 2010, a coal industry official said on Tuesday.

China's demand for coal is expected to rise to 2.76 billion tonnes in 2008, from 2.62 billion tonnes in 2007, said Wu Chenghou, executive director of the Coal Sale and Transportation Association of China.

Wu estimated China produced 2.58 billion tonnes of coal in 2007, slightly above an estimate of 2.52 billion tonnes issued by the State Administration of Work Safety.

He did not comment on whether the country had drawn down coal stocks in 2007 to remain a net exporter, despite producing less than it consumed. China has not yet issued official output data for 2007, and often revises that figure several times.




Customs data released Tuesday showed the country's net exports of coal fell sharply to 2 million tonnes in 2007, compared with net exports of 25.1 million tonnes in 2006 .

By 2010, China's coal consumption will reach 3.06 billion in 2010, up 10 per cent compared with last year, more than will be satisfied by domestic production of between 2.9 billion and 3 billion tonnes, Wu told reporters at an industry conference.

Coal output in 2008 could be reduced by a number of factors, including a crackdown on mines that are unsafe, polluting or wasteful of energy, Wu said.

Some mines could also be closed during the Olympic Games in Beijing in August.

That could cause regional shortages in 2008, Wu said without further specifying. He did not give an output estimate for 2008.

During last year's meeting of the ruling Communist Party, some mines were shut and local media attributed the decision to an effort to avoid embarrassing fatalities from mine accidents, which caused an average of 10 deaths a day in 2007.


©AAP 2008

Hm coal shortage till 2010, that's a long time to have a shortage. Have to see the rest of the world consumtion and production etc

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.8 21.5 35.8 54.5
DPS 6.0 3.9 19.0 12.7

thx

MS

 

[noirua]

Felix have slipped badly in continuous light trading as sellers accept lower and lower offers. Yesterdays close at $6.65 was more than $2 down on the recent highs, 276,523 shares were traded which shows how tightly the stock is now held.
Half Yearly Report should be out this Friday and should show progress as good as the First Quarter.
Much is on the strength of the Aussie against the Greenback and hopefully the US Dollar will be more in demand in present nervous markets.

 

[Reefer]

Hit $6.20 today which is the lowest the stock has been since middle of October. Perhaps the half yearlys have been badly affected by demurrage, is Moolarben court case going against us - we are suffering a much greater correction than all the otehr coal stocks, most of which are rising. Very disappointed with the performance over the last few weeks.