CLE - Cyclone Metals

[Ashsaege]

Yes but don't you all think this is going to go down faster than a two dollar hooker after the 14th of October?

I reckon it will get smashed after people pocket the divi and jump out again

Im kinda expecting it to be oversold today, though i wont be selling.
The aussie market should do very well today, after wall street's record bounce last night... hopefully this will soften the blow for CFE today.

 

[herbert]

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

Hi Youngtrader,

you still around? Bought into CFE about 2 months ago because their cash: market cap ratio is outstanding in my opinion.

Can't see the SP drop below 20c since their cash backup is around 46C/share netto and they are about to drill Cape Lambert South which could add a potential 300 M$ to CFE, once Jorced and sold.

Anyway, bargain buying at current prices.

Cheers

 

[Ashsaege]

Hi Youngtrader,

you still around? Bought into CFE about 2 months ago because their cash: market cap ratio is outstanding in my opinion.

Can't see the SP drop below 20c since their cash backup is around 46C/share netto and they are about to drill Cape Lambert South which could add a potential 300 M$ to CFE, once Jorced and sold.

Anyway, bargain buying at current prices.

Cheers

There isn't much daily volume for CFE, which means that price can swing quite easily... and it wouldn't take too much selling for it to drop below 20c.

 

[Go Nuke]

Hi Youngtrader,

you still around? Bought into CFE about 2 months ago because their cash: market cap ratio is outstanding in my opinion.

Can't see the SP drop below 20c since their cash backup is around 46C/share netto and they are about to drill Cape Lambert South which could add a potential 300 M$ to CFE, once Jorced and sold.

Anyway, bargain buying at current prices.

Cheers

Well its below 20c right now!

As I suspected got smashed after the divi was paid.

Ah well, I'll just add it to the the paperlosses with the rest of my portfolio

 

[herbert]

Well its below 20c right now!

As I suspected got smashed after the divi was paid.

Ah well, I'll just add it to the the paperlosses with the rest of my portfolio

go nuke,

the divi is not the reason why CFE got smashed. It's the overall market, just look at AGO, BRM , FMG, BHP ,Rio etc.

In another environment CFE would be trading at around 40c+ right now. It's a long term hold, with 240 M$ cash they'll be able to survive this crisis and emerge victorious afterwards. Just be patient and hold.

Cheers

 

[Ashsaege]

go nuke,

the divi is not the reason why CFE got smashed. It's the overall market, just look at AGO, BRM , FMG, BHP ,Rio etc.

In another environment CFE would be trading at around 40c+ right now. It's a long term hold, with 240 M$ cash they'll be able to survive this crisis and emerge victorious afterwards. Just be patient and hold.

Cheers

I think the divie was the reason why it got smashed. The SP basically dropped by the same amount the divie was. And now the company is worth $100mill less.

Since then the SP has gradually fallen and that would be from the overall market.

I am too optimistic for the future.. tho it may be a while

 

[mrgroundwork]

i was thinking of trying to strip the special div on this, but i decided against it as generally that method doesnt work in a falling market...

good call in the end, the SP dropped by the same amount of the div pretty much...

personally i dont like the direction they are taking the company... would have been better to look at assets closer to home with all that cash thank look offshore...

 

[gav]

I posted this on the FMG thread, but thought it was appropriate here too.

% fall of Iron Ore stocks:
BCI - Down 85%
AGO - Down 84%
CFE - Down 56%
MGX - Down 89%
FMG - Down 78%

 

[Sunburnt]

Hello CFE watchers,

I think the price closed at 27c on ex-dividend day. Given it was sitting at 45c the day before, and paid a dividend of 21.7c that should have seen it drop to roughly 23c - so sellers were ahead by 4c really. It seems the drop was a combination of both factors....

 

[Sean K]

Cripes,

Is the cash backing 2 or 3 x it's current MC?

Market is factoring no production in the next xx years for the likes of this and BRM.

Surely the world will break out of recession and even depression and Chindia will need IO.

 

[Go Nuke]

Noone commenting on the action around CFE at the moment?

Ive noticed a bit of a pick up lately with way more buyers than sellers.
Some initial drilling results maybe??

 

[Justthinkin]

I'm keenly following CFE and constantly finding myself tracking down who's who in the share registry. A recent 36M parcel looks to have Russian associations (UniCreditaton International Limited) which could mean absolutely anything.

Sage is messing about... looks like the child who has discovered the hole in the bottom of the piggy bank or maybe Gollum ex Lord of the Rings "... my Precious, my Precious....".

A share price less than net cash holdings... forget any non cash nebulous asset (rights re south Cape Lambert etc etc) and assume every liability known to mankind settled and you still have cash signifacntly greater than market capitalisation!!!!!!!!!!!

Someone needs to to stomp on this dribble and soon. About now!!!!

 

[Sunburnt]

Main reason for not increasing my exposure is in trying to keep the ol' portfolio balanced .... and a certain dose of suspician/fear. It seems easy for blue chip banks to lose 1 billion dollars these days, so 200 million going missing with a mining company - seems reasonable.....and why aren't the rich and famous not buying this stock?

 

[Justthinkin]

I do hold CFE but am equally nervous about jumping in deeper. Fundamentally there is no logical reason why a company would trade at such a significant discount to its net cash asset position.

I spoke to Sage. His simple comment was Evraz. If you've done any reseacrh you'll find the CFE share registry a real piece of work and Evraz quite an interesting company.

Key Evraz issues:

(a) recently given a bailout ex Russian State bank sufficient to allow it to pay its tax bills;
(b) Government concerned (aka terribly annoyed) that Evraz has leveraged stalling Russian mills to fund acquisition of foreign assets...
(c) Evraz has a put and call options re Singaporean Delong Holdings acquisition. Evraz has acquired (and holder of it keeps shoving them through) nigh 20% of Delong Holdings at the handsome sum of S$3.9459 (compared to prevailing mrkt price of S$0.75)
(d) In the event that Peoples Repulic of China this side of next February authorise a further 32% investment, the proud owner of the Delong shares will inevitably exercise his put option and deliver to Evraz that 32% (same pricing diparity)
(e) Note that Delong has a parcel of options and shares in CFE (12,000 and 28,000 respectively)
(f) Evraz continues to trade extremely close to the magic 20% ownership of CFE... very close indeed.​

Short version...a major CFE shareholder with no cash , little political support, a few vulnerabilities to the Chinese government but in an enviable position of being front runner to a cash box. No-one knows his next move.

For me the decision was buying circa 40 cents net cash for about 20 cents shouldn't require extensive financial analysis. But my heart stays comfortably in my mouth because CFE is not beyond a good dumping. Not for the faint hearted.

For those still interested, I had contemplated a marriage between SDL (impressive JORC resource in West Africa, some cash) and CFE (a less impressive project in West Africa and a mountain of cash)... but I doubt it will happen because CFE is about proving up resources and flogging of development whereas SDL seems content traversing the entire value chain.

Good luck today...might be a shocker on thin volumes.

DYOR... the above is just the rantings of the little yellow man wearing a lollipop pink tutu running around in my head.

 

[d_crome]

CFE looks to have taken a position with DMM - SDL's little brother...

Might want to definitely check that out.

 

[Sunburnt]

All of the above is very interesting (thanks for the info) ....I shall keenly watch this stock in 2009.

 

[Go Nuke]

haha D crome I thought you were going to suggest that SDL had hooked up with DMM.
Being relatively close to one another I thought that would make more scense

 

[d_crome]

Nuke - mate, if only that were the case I think we'd all be smiling.

Looks like CFE has somebody on DMM's board now, so it'll be interesting to see how it all works out.

 

[Justthinkin]

An interesting article ex WA papers this morning.

http://www.thewest.com.au/default.aspx?MenuID=3&ContentID=116008

CFE MD Sage supposedly calling a directors meeting to authorise "low ball" offers on assets presently up for sale inclduing those proudly owned by OZL and CopperCo. Also Sage banter re supposed Chinese interest in African assets...

Life must be tough with a balance sheet oozing with cash in an environment when peers are drowning in a sea of debt.

DYOR. I'm long CFE... not sure where else you can buy cash for less than 100 cents in the dollar!!!

 

[resourceboom]

the sp is starting to see some increases lately,
still well under cash backing tho.

still struggling to understand why people wont pay 50c for $1, esp when that just for cash. What about the other prospects which mean you could be paying 33c for $1 or even less, with quite low risk, or should you buy govt bonds yielding 0.5 or 0% ??