CLE - Cyclone Metals

[MR.]

Another nice rise for CFE today. Probably on the speculation regarding the Russian interest. If another offer is to eventuate it will have to be soon as the meeting date for approval of the sale to china draws near. Regardless of which offer succeeds the SP has still room to move. CFE is showing me a nice profit at today's price, even the half that was bought by mistake.

Good on ya there Nioka. I'm sure there are many watching.

No lower than $1.20 per share TS will accept? Then why did he settle with $400 million then in the first place? I think this Russian is tring to get enough votes to stop the sale to MCC and with good reason...

Takeover, we will just have to wait and see! The price is $0.85 do you want to sell your share to this Russian or take the risk he "might" offer more?
I think $0.85 per share is a good price, could you please explain your valuation of $1.15?

 

[nioka]

Good on ya there Nioka. I'm sure there are many watching.

No lower than $1.20 per share TS will accept? Then why did he settle with $400 million then in the first place? I think this Russian is tring to get enough votes to stop the sale to MCC and with good reason...

Takeover, we will just have to wait and see! The price is $0.85 do you want to sell your share to this Russian or take the risk he "might" offer more?
I think $0.85 per share is a good price, could you please explain your valuation of $1.15?

I've sold half (to lock in profit) today. The balance that I owned before the "mistake" I will hold for an outcome of the proceedings unfolding.
To get to $1.15 as a value is easy. Even the CFE management suggest that. Take the number of shares on issue and divide that into the nett proceeds of the possible sale to China and give some value to the area CFE will still hold and you get a figure in excess of $1.15.

 

[YOUNG_TRADER]

Hey guys,

was just crunching some numbers of Magnetite project values and value per tonne etc etc

Anyway it looks like $1 - $2 is the level per tonne Magnetite that some international projects are selling at,

Having said that I was somewhat surpised to discover via calcualtions that CFE is only recieving 82c per Tonne Magnetite given its proximity to infrastructure, ports rail etc etc, perhaps its the lack of a nearby benefication plant or steel mill that reduces its potential somewhat compared to these International sales but I would have thought they could have got at least $1/t?

Here are the Calcs

Deposit = 1.56Billion t's @ 31.2% Fe = 487M tonne Magnetite

Sale price = $400m AUD

= 82c per tonne of contained Magnetite


Could have done better CFE managment, especially if they had waited till after this recent 95% price rise, but thats hindsigth I guess

p.s. I'm not a holder, just passing on some observations

lol looks like someone heard what I had to say, how funny guess Russian billionaire Roman Abramovich reads ASF and thought, hey that YT is right, 82c per tonne Magnetite is just too cheap

So if the offer is $1.20

Well theres 325m shares + 185m avg 35c options

Fully diluted = 510m shares with $15m cash + $65m from the options

So a $1.20 bid = $610m (510m x $1.20) less $80m company cash

So net cost of $1.20 bid = $530m



Deposit = 1.56Billion t's @ 31.2% Fe = 487M tonne Magnetite

Sale price = $530m AUD

= $1.09c per tonne of contained Magnetite


This is in line with International EV's for Magnetite project sales

Will be interesting to see how the company and the Chinese respond if its all true

 

[enigmatic]

I must be a little confused I thought that the russian offer was for CFE.
Not for the single project of $400million
I would be looking for a minimum of 750mil if they sold to the russians.
Unless I'm misstaken and this russian news is only for the one project

 

[enigmatic]

If anyone is confused with my values. 400mil for current project and 350mil for the second tenement which CFE estimate was worth 350million.
like i said bare minimum 750million

 

[MR.]

If anyone is confused with my values. 400mil for current project and 350mil for the second tenement which CFE estimate was worth 350million.
like i said bare minimum 750million

Enigmatic the 350 million for the second tenement could you please post where this value is written. Is / was it in an announcement?

 

[enigmatic]

Sorry MR. I have yet to been able to find were that information was from. I have been following this from August last year and I'm sure it has been mentioned in this thread on a few times. I will try to find it as soon as I have the available time.

 

[nioka]

I must be a little confused I thought that the russian offer was for CFE.
Not for the single project of $400million
I would be looking for a minimum of 750mil if they sold to the russians.
Unless I'm misstaken and this russian news is only for the one project

The Russian deal is that they are buying shares and are now a major shareholder. There is no "russian offer" as such at this stage, only SPECULATION that they will continue to want a bigger slice or all of CFE.

That's how I see it. I may be wrong.

 

[YOUNG_TRADER]

lol looks like someone heard what I had to say, how funny guess Russian billionaire Roman Abramovich reads ASF and thought, hey that YT is right, 82c per tonne Magnetite is just too cheap

So if the offer is $1.20

Well theres 325m shares + 185m avg 35c options

Fully diluted = 510m shares with $15m cash + $65m from the options

So a $1.20 bid = $610m (510m x $1.20) less $80m company cash

So net cost of $1.20 bid = $530m



Deposit = 1.56Billion t's @ 31.2% Fe = 487M tonne Magnetite

Sale price = $530m AUD

= $1.09c per tonne of contained Magnetite


This is in line with International EV's for Magnetite project sales

Will be interesting to see how the company and the Chinese respond if its all true

Guys my figures and calculations were based on a Russian offer at $1.20 a share,

At this stage its all speculation, but what I was trying to show is that if the offer was made at $1.20 what the Russians were paying for the main magnetite deposit per tonne magnetite, now if there are other deposits this changes things

Anyway I don't hold just crunching numbers for fun

Good luck

 

[TheAbyss]

A few things of note with CFE yesterday.

1. Director (Tim Turner) who is a not a full time employee of CFE, offloads 500,000 shares on market - Take the money and run son.

2. CEO Tony Sage announces that a hostile take over bid by Evraz is imminent however CFE are continuing with the sale to MCC as they should.

Looks to be all upside for shareholders short term as the 28th July shareholder meeting is the deadline for any other offer so we will either see an offer for the entire company or the sale of the Cape Lambert project will progress and the money will go into the bank.

Perhaps i am being to simplistic however i cant see a lose factor on this one at the moment (depending on what entry price you have of course).

http://www.theaustralian.news.com.au/story/0,25197,24050518-5005200,00.html

 

[Family_Guy]

OK, so what happened here? This is one i have had my eye on, but dropped off it when the price rocketed away last week. I cant see an announcement, but the price dropped heavily. What is the expectation of the meeting today? Some insider knowledge or just plain profit taking before the announcement?

 

[TheAbyss]

Either 1 of 2 things are going to happen today.

1. The meeting proceeds and the sale more than likely goes through
2. There is a counter offer put on the table prior to the meeting which looks very unlikely.

The SP spike was due to speculation that an offer would come through for the entire company as opposed to the single project which todays meeting is to decide whether to accept or not.

A good result for CFE either way.

Ineterst now will be news on the other ptenements adjacent to the Cape Lambert project plus what do they invest the money ionto, will it be a smart and prudent investment or highly speculative?

Thats up to you to decide in due course.

 

[Go Nuke]

WOW
CFE is getting ABSOLUTELY PUMMELED right now!
Down to 58.5c!

From what ive been reading on here from people who sit and do the maths, this is below its fair value based on the $400+ Mil they are about to recieve??

Ive copped a smashing today on the market...and I don't even hold bank stocks!

 

[nioka]

Shareholders meeting approved the sale so that removes the possible takeover offer. I suggest that the speculators buying in the hope of a higher take over offer are selling. That selling would trigger stop loss arrangements and start a mini lemming rush. The value is still in the company as the sale proceeds will exceed today's market cap and the company still has other irons in the fire. I'm holding for now.

 

[nioka]

News just out says that the Russian deal may not be off after all. The areas not sold are likely to contain 900m tonnes of iron ore and with the company well cashed up after completing the sale to chinese interests of the first lease hold area it still makes an attractive investment proposition for the Russians to continue to expand their holding in CFE. Those selling today may have made a costly decision. The next few days could be interesting. If the price stays down I will have a buy order placed to take advantage.

 

[chansw]

News just out says that the Russian deal may not be off after all. The areas not sold are likely to contain 900m tonnes of iron ore and with the company well cashed up after completing the sale to chinese interests of the first lease hold area it still makes an attractive investment proposition for the Russians to continue to expand their holding in CFE. Those selling today may have made a costly decision. The next few days could be interesting. If the price stays down I will have a buy order placed to take advantage.

I am interested to read the news you mentioned. Do you have the URL for that news? Thanks a lot.

 

[nioka]

I am interested to read the news you mentioned. Do you have the URL for that news? Thanks a lot.

It is a news item on ASF business news. The best place to get up to date and reliable info. (while the promo is sincere I had to include it to get the 100 digits)

And I just noticed that this is my 2000-th post.

 

[Family_Guy]

My apologies for the silly question, Nioka. ASF business news.........Where exactly? is this a subscriber thing you speak of??
Interested in reading this as i did dive in late this arvo.

 

[nioka]

My apologies for the silly question, Nioka. ASF business news.........Where exactly? is this a subscriber thing you speak of??
Interested in reading this as i did dive in late this arvo.

Down the left side of the home page. (Now I need 100 digits for that to be accepted0. It is the column I always read first when I log in. Titled "News Headlines."

 

[blues]

Australian Business and Finance News

--------------------------------------------------------------------------------


Cape Lambert expects Russian bid soon
28/07/2008 05:13:49 PM


Cape Lambert Iron Ore says it expects a takeover bid in coming months by its largest shareholder, Russian steel making giant Evraz Group SA.

The junior iron ore explorer says it may become a takeover target now that it is cashed up after selling its namesake project and has another promising project on its books.

Cape Lambert shareholders on Monday voted in favour of the sale of the Cape Lambert North project in Western Australia's Pilbara region to China Metallurgical Group Corporation (MCC) for $400 million.

Cape Lambert shares closed down 26 cents, or 32.3 per cent, to 54.5 cents.

Cape Lambert director Tony Sage told AAP that he expected Evraz would be "very busy looking at ways to control the board", lifting its stake beyond 19 per cent because Cape Lambert was cashed up with a "fantastic deposit", the Cape Lambert South project, remaining in its portfolio.

Mr Sage said Evraz would soon raise its stake through its likely-to-succeed takeover bid for Singaporean steel group Delong, which has a 4.4 per cent stake in Cape Lambert and holds 28 million options that it can exercise to increase the stake to 13 per cent.

Evraz currently holds more than 10 per cent of Delong.

"They (Evraz) are not going to go away, put it that way," he said.

"They've made a $50 million investment in us and are not going to sit there without board representation, which I don't think the board would approve.

"However, if they spend another $120 million to gain control of the company and our $400 million in cash, they will more importantly gain control of Cape Lambert South."

Mr Sage said the Cape Lambert South project should hold at least 900 million tonnes of iron ore.

He said it would cost $30 million over the next six months to prove up a $300 million resource that was compliant with Australia's mineral reporting code.

"We fought tooth and nail with MCC to keep this deposit in our grasp.

"We expect that to be a huge resource. We would not have to develop it."

Cape Lambert has a deal to sell its ore to MCC, sending it to the Chinese conglomerate's processing plant and a port that it is currently developing at Cape Preston, which is situated within a few kilometres of Cape Lambert's Pilbara projects.

"We'll be able to sell that immediately knowing there is a port and a concentrator being built by MCC," Mr Sage said.

He said between $30 million and $100 million of the proceeds from the Cape Lambert North project sale would go to shareholders.

The final figure was dependent on the company's evolving growth plans, which included partnerships with other Pilbara iron ore miners, and potential projects in west Africa and Brazil.

Cape Lambert has applied for tenements in the Pilbara which have not yet been granted.

Mr Sage said Cape Lambert, - which was cash-strapped at the end of March with only $2 million in the bank, had been approached recently by several iron ore hopefuls that had found it hard to raise funds and sought a cashed-up joint venture partner.

"There's heaps of opportunities with the remaining cash," Mr Sage said.

About $87 million from the sale proceeds would be taxed but would not have to be paid until June 2010, he said.

MCC's first tranche of $240 million is to be paid on July 31 followed by a second tranche payment of $80 million on September 15.