CLE - Cyclone Metals

[Buddy]

Why would the management do this, when they can stuff around for at least 5 - 10 more years with that cash, while earning their six figure salaries...

Yes, that's true. Seems like the mug punters are going to be the loosers on this one. Yet again!
Barstards!

 

[evas34]

I am not going to vote for those guys, just look at the fact of the recent share price dropping, we as small shareholders are getting hurt.

First, I don't think them have gave us enough substantial reasons why the investment in the African is bad. Even African is a somewhat remote areas, but it is a rich land of natural resources, what's more, the labour will be much cheaper than in Australia.

Second, what them suggest is to pay fully franked dividend than the unfranked dividend, that means, the company should have at least 30m franking account credit balance on the tax return, to put it another way, the company should have already paid 30m to the ATO. I cant see that from the reports, so, there is no way CFE can pay franking credits to us.

I admit I didn't like the employee options as well, but considering the board have managed to sell the assets to MCC at a higher price than the sale to Delong before the price rise of the iron ore, they did a reasonably good job there, so, it will not hurt so much to give some options away.

I have been accumulating CFE through every possible sources of fund, hope I will laugh instead of cry in a few month later

 

[nioka]

I can't see the reason for CFE SP to be as low as it is. The best thing the present management can do to keep the shareholders on side would be to pay the promised cash return to holders which was expected to be around 25c per share. The cash is there to do this.

The cash available, related to the market cap makes CFE a target. In the "old" days Alan Bond would have snapped it up by now.

The present board need a kick up the proverbial but the proposed one would be worse for the general shareholders as I see things.

Message to the board; Pay out the 25c a share pronto. That's the reason I'm still holding.

As for Africa, I haven't made up my mind yet on that one.

 

[Family_Guy]

Was just reading a statement from CFE regarding a few issues and it got me thinking. So i was wondering if anyone knows if an ex div date on the 25c unfranked return for shareholders has been announced? What i'm getting at here is simply this.......i would like to buy more at these current prices. Have we gone past an ex div date on the 25c divvie and perhaps this is why the SP is floundering, or will the ex div date be released at the end of the month as per tonights statement from the board.

Cheers

 

[nioka]

Was just reading a statement from CFE regarding a few issues and it got me thinking. So i was wondering if anyone knows if an ex div date on the 25c unfranked return for shareholders has been announced? What i'm getting at here is simply this.......i would like to buy more at these current prices. Have we gone past an ex div date on the 25c divvie and perhaps this is why the SP is floundering, or will the ex div date be released at the end of the month as per tonights statement from the board.

Cheers

I doubt that we have gone past the ex div date. a call to the company would answer that.
The present menagement were smart enough to get CFE into the great cash position that the company enjoys, I doubt if they would be dumb enough to blow it in a bad investment in Africa.
I can see no reason why the SP is as it is. That is a worry to me but not enough of a worry to sell out. Maybe a good time to buy more when cash is king and CFE have the cash and more to come.

 

[YOUNG_TRADER]

Hey guys,

On holidays, only checking mkts sporadically,

I bought a few more of these, cash is cash and 90c Cash Backing vs 36c share price is a no brainer for me

Buy the gloom sell them boom

Just look at MQG today up 50% at one point, crazy!

I wonder what will happen when the mkt wakes up to the fact that CFE has a current NTA of 75c-80c and will end up with 90c

Be safe guys, I'll be lurking

Well it was interesting to watch as an observer how that whole Chinese deal/Russian buying thing played out, very strange if you ask me

Anyhoo just ran some number for fun and here's what I got

380M shares + 120M (ish) opies avg conversion price 33c

So total capital = 500M

Cash current = $270m
Sale proceeds to be recieved = $160m
Option exercise = $33m
Total = $463M

NTA Share = $463m/500m = 92.5c

There are 2 further factors worth considering,

1. The company has kept the Cape Lambert South Project which is IMMEDIATELY South and touching the main Cape Lambert Deposit and magnetic surveys have found a 3km long anomoly which looks similar to the much larger anomoly the discovered at the main Cape Lambert deposit which after much work was found to host 1.5Bt's and eventually sold for $400m

I would imagine any ore discovered here would also be naturally sold to the Chinese, so in a way CFE already have a buyer lined up IF thats IF they can drill out another deposit



2. The company is propsing to give back $100m in 2 parts, in specie distribution and dividend, using the 380M shares currently on issue = 26c a share


Key points
NTA should be 90c vs SP 50c
Company has the Cape Lambert South Porject which does look promissing

DYOR

 

[Ashsaege]

Was just reading a statement from CFE regarding a few issues and it got me thinking. So i was wondering if anyone knows if an ex div date on the 25c unfranked return for shareholders has been announced? What i'm getting at here is simply this.......i would like to buy more at these current prices. Have we gone past an ex div date on the 25c divvie and perhaps this is why the SP is floundering, or will the ex div date be released at the end of the month as per tonights statement from the board.

Cheers

25c divies??? could someone explain this to me... as the share price is currently under 40cents.
I know the company has cash.

 

[Family_Guy]

25c divies??? could someone explain this to me... as the share price is currently under 40cents.
I know the company has cash.

They have 400+mil shares out there and they say they want to give $100mil cash back to share holders.......so somewhere between 20-25cents...... at least i think that is how it is worked out.
And if that is the case then holding CFE is a win for me. It does not make sense to me that if my maths is correct and the share price is this low.

 

[Ashsaege]

They have 400+mil shares out there and they say they want to give $100mil cash back to share holders.......so somewhere between 20-25cents...... at least i think that is how it is worked out.
And if that is the case then holding CFE is a win for me. It does not make sense to me that if my maths is correct and the share price is this low.

That sounds too good to be true with the current share price. Surely market efficiency would have picked up on this.
I've only been holding CFE for a week, i wonder is there is an ex div date or something that's already past. I'll go through previous posts and company announcements and do some research.

 

[Justthinkin]

This is a curious stock and I suspect will prove not to be for the faint hearted. Yound trader is correct ... it is basically a cash cow with a sideshow of mining play aside the field it has just diligently sold to the Chinese et.al. So it can't be all bad.

Where this stock is going to get very ugly is the apparent corporate plays ahead.

The directors seems to have assumed the position of King Midas... in their minds everything they touch ineveitably turns to gold...they seem ready if not dangerously eager to spray shareholders cash all about.

Last Friday's meeting request and court action is I think about Power United saying that the directors should not spray his share of cash about.

Things to watch are:
(a) My calculations say that CFE has about $200M of shareholder cash that in the abscence of something very interesting, they could return to shareholders. In my view, the directors have not shown sufficient cause or capability to retinn large sums of other peoples money;
(b) the Russians on the register are interesting in as much I suspect they may be awfully close to 19.9%, subject to what happens next;
(c) Power United have put onthe table 50,000,000 times 32.7 cents to exercise thier options, late August, and that decsion was clearly not underwritten by the African opportunity;
(d) Watch how the balance of unlisted options are managed. There is a parcel of 28M on the register and I'd be curious to know who owns them

The directors I think have to date been a little foolhardy... I think they are indeeed sitting on a huge pile of cash and are loathe to give it back to shareholders at large and even less enthusiatic about winding up CFE and finding another job. At a distance, the African deal does have a nasty stench especially given the London source writ... why bother with the agro??? You would have to question why they would bother... surely.

Yet the market is always right... despite the mountain of cash, nobody's bidding it up... hmmmmm

Lastly, I do have a position with CFE but you really really do need to do your own research. What's above is the ranting of an optimist who truly thinks the market is a great place to be.... good luck

 

[mrgroundwork]

That sounds too good to be true with the current share price. Surely market efficiency would have picked up on this.
I've only been holding CFE for a week, i wonder is there is an ex div date or something that's already past. I'll go through previous posts and company announcements and do some research.

market has already priced in around a 20c special div... so it is realistically only valuing the company at around 15-20c...

the market seems to be placing a huge discount on the company for the risk associated in management stuffing up a number of issues it is tackling at the moment...

the market can be pretty good at pricing this risk (in mining companies as opposed to financials) so I dunno whether i would be buying in and taking a contrarian view to the whole market just to try and get this div...

 

[SimpleMan]

I think no one would disagree that the market is clearly confused or concerned and probably both. However it is hard to escape that the management got the company to such a position, and I can't help thinking that they are only doing what they say they were going to do i.e. find some more iron ore.

Why are the Russians and these other players so interested ? With a wealth of other Companies failing or with cash problems this has at least got to be on the right side of the odds curve. I have put my money where my mouth is, and I guess time will tell.

 

[nioka]

I think no one would disagree that the market is clearly confused or concerned and probably both. However it is hard to escape that the management got the company to such a position, and I can't help thinking that they are only doing what they say they were going to do i.e. find some more iron ore.

Why are the Russians and these other players so interested ? With a wealth of other Companies failing or with cash problems this has at least got to be on the right side of the odds curve. I have put my money where my mouth is, and I guess time will tell.

CFE is hard to work out at the moment. With a market cap showing at $169m and a return of $100m to shareholders promised there is a balance of around $300m in cash seemingly valued at $69m.

Considering that position why is a HongKong based company with about 19% share holding trying to replace the whole board, getting injunctions against the actions of the present directors and trying to prevent the African purchase. Is it just to get their hands on all the cash and stop our promised divvy? They certainly won't get my proxy even if I'm not completely happy with the present board.

 

[rub92me]

I have been looking at this too for a while and can't find anything wrong with the valuations that have been provided by various posters. However, if things sound too good to be true, they usually aren't, which is the only thing holding me back. I have no clue as to what it may be, but there could be a black swan hiding in the shadows somewhere.

 

[nioka]

there could be a black swan hiding in the shadows somewhere.

This is what is lurking in the background.

Recent recored share transactions resulted in the following ownership.

15th July. Merril Lynch 16%
16th july. Evaraz Group 19%
30th August. Power United 11.49%
30th August. Michael Shemesian 16%

Plus plenty of trading since.

Note that Power United is the one that is trying to take over the board. If the others mentioned are on their side then it is all over for the say of the small shareholders.

 

[rub92me]

Nioka, nope, that's not the black swan, that's black clouds. A black swan is something that can not be readily gained from the information at hand, but easily explained in hindsight. I guess time will tell and I hope for holders it's just black clouds.

 

[Justthinkin]

15th July. Merril Lynch 16%
16th july. Evaraz Group 19%
30th August. Power United 11.49%
30th August. Michael Shemesian 16%

Just to clear thing sup... my take is that the Evraz 19% includes that disclosed by Merryl. The Shemensian 16% includes the Power United holding. Please correct me if I am wrong.

My take is that Shemesian who [based on some google research] is a player whi is happy to put others in an awkward position and financially lever accordingly. Possibly this is another instance. I don't think he has any long term aspirations re CFE...

The names to watch are Evraz, Power and Delong (ex Singapore). Evraz is amidst a takeover of Delong who as I understand it the proud owner of 28M unlisted CFE options, exercisable at 37.7 cents.

The uneventful meeting between Meril and the company not so long ago is intriguing.

If you really wanted to annoy someone then what you might do is call an EGM and force the premature exercise of these option. But would that cause downstrem complexities... maybe.

Also the African play is bewildering. If they have a fettish for remote area diggings, I'm sure there is a mountain of projects going for cents in the $ with compliant reserves defined. Moroever, the directors keep telling me about the progress of injunctions (almost a blow by blow description) yet I can only surmmise what actual cash position is and might be 3 months hence. This transaction does smell, the directors sense of urgency causes me to feel uncomfortable and I think an EGM (if not the injunction process) could reveal some interesting facts.

Again... do you own research...

 

[Family_Guy]

And there you have it.
22.7 cents a share with an ex-div date of 14 Oct.
SP currently at 35c.
So i wonder if the SP will hold or go up. Can't see it falling with out being snapped up.

edit......only took a few minutes to drive up 8c

 

[Family_Guy]

I just got a ph call from a so called research company from Power United asking me a few questions about what i thought the board were doing...........half expected an 'invite' to meet Mick Gato.

 

[hsv2001]

Am i reading right, that this is approx. a 50% return on the shares I wish i had some spare cash