ADY - Admiralty Resources

[MS+Tradesim]

I'm going to repeat Rub's post because it perfectly echoes my thoughts at the moment:

From their annual report it appears that they have already secured 5 million from one credit provider, and awaiting internal approval for another 5 million convertible note to be received before the end of October. Debt has indeed become very expensive, but not much that can be done about that now. So from a cashflow perspective they look to be safe for another 3 months. A lot can happen in that time. At a minimum they need:
1) A signed contract for offtake of iron ore and attached letter of credit
2) Make a decision on their tender for the Lithium offtake and prepayment.
If they can get that over the line in the next 3 months than things should turn around (and hopefully boost the shareprice).
Not too much to ask for. So Phil Thomas: show us why you deserverved a 500K salary this year!

 

[SCHUMACHER]

Looks like a dead cat bounce to me as the volume is really small. You need 50mill plus volume for confirmation to confidently buy this pup.

Well Lioness ...You got your wish..........ADY traded over 50 million shares on friday.....I loaded up at the open at 4.4c
cheers SCHU

 

[roland]

Thought I would spread my misery around with all my holdings. Maybe my losses will brighten up someone else.

ADY -62.27%

 

[aleckara]

Thought I would spread my misery around with all my holdings. Maybe my losses will brighten up someone else.

ADY -62.27%

I've lost a bit too. No use selling now though - my holding is not that much now anyways which is why I didn't look at it. Oh well, live and learn - still young.

I just received an email from Maria (ADY Investor Relations) clarifying a few things. Still there is some things there to be concerned about. The company is in financial distress and the bondholders here are king with their recent agreement. They really wanted to shift the leftovers to them rather than us.

Hope they don't go bust. I still think Lithium will be the next thing. Just don't know if ADY will be the one to do it. Maybe a bigger player (i.e SQM, BHP or whoever else) will end up having the field, and in that case there is no use in investing in that bigger company - it is factored into the price already.

 

[roland]

actually to put it into context, I've made 85 trades with ADY since Feb 2005

trading realised profit is $8,319
currently sitting on an unrealised paper loss of $11,489

so could be worse, and may get worse ???? - who knows

 

[sjx]

- Hi, I'm new here.

Wow these guys are really taking a beating.. Maybe they just can't come up with the required funds.. guess we'll just have to wait it out, but now that they're at 3.9c, im almost.... considering buying more..

Lithium seems like a promising thing at the moment.. so either these guys find their groove and start moving up, or who knows..

 

[rub92me]

Their Lithium tender for a 10 year offtake went out more than 2 months ago according to ADY announcements. In current market conditions it is hard to imagine that anyone would commit to a price or a substantial prepayment ($50 million) for a 10 year contract. If any of them would have that kind of money to spend they could buy the entire company at current share price and get some free iron ore to boot! The battery market could take a beating too over at least the next year or two which would reduce Lithium demand and put pressure on the price.

 

[aleckara]

actually to put it into context, I've made 85 trades with ADY since Feb 2005

trading realised profit is $8,319
currently sitting on an unrealised paper loss of $11,489

so could be worse, and may get worse ???? - who knows

It's a bear market. Most investments are in the red. Plus since I work for a company with share trading restrictions most of my money was tied up in a stock that dropped like crazy.

Managed to get out today after some negotiation off it but the damage has been done. But I think it can get worse - the China piece of the puzzle has yet to fall and that could be the last domino. Chinese demand is slowing atm as evidenced by Mt Gibson's announcement. No rush to jump in atm I think until I can see positive momentum (fundamentally in terms of news and price). Lithium i can see demand rising albeit from a small base as hybrids will go through lithium (i.e a 300kg battery in each car and more people own cars than laptops). Even if car sales slow that gives carmakers these days more reason to switch to these cars - they don't use fuel and they know if they don't do it they will go under eventually. Great motivation to finally make a change.

 

[rub92me]

Trading halt relating to a possible sale of an 'important asset'. Unlikely they are talking about Phil Thomas, because he's been more of an expensive liability. : Maybe they're selling their iron ore business to the infamous Mr Farkas Klein, the owner of Wyndham Exploration SA (40%JV partner of Vallenar Iron ore) and imho the main reason they are in so much strife. The same Mr Farkas Klein is also the owner of Minera Santa Fe, the very same company that shafted ADY by not delivering on their iron ore contract causing a huge loss.

 

[mayk]

Trading halt relating to a possible sale of an 'important asset'. Unlikely they are talking about Phil Thomas, because he's been more of an expensive liability. : Maybe they're selling their iron ore business to the infamous Mr Farkas Klein, the owner of Wyndham Exploration SA (40%JV partner of Vallenar Iron ore) and imho the main reason they are in so much strife. The same Mr Farkas Klein is also the owner of Minera Santa Fe, the very same company that shafted ADY by not delivering on their iron ore contract causing a huge loss.

IS this a rumor? If they can sell the Iron ore business, will it bring in the mulla for ADY?

I was ready to grab alot of ADY if they went down to 1cent, don't think it will happen now, if the deal went through.

 

[rub92me]

IS this a rumor? If they can sell the Iron ore business, will it bring in the mulla for ADY?

I was ready to grab alot of ADY if they went down to 1cent, don't think it will happen now, if the deal went through.

It's just a guess, mayk. In my view they only have 2 important assets: their iron ore and their Lithium. Of course they could be talking about just some of their many iron ore tenements that have not yet been explored.

 

[shccbell]

Well I don't really care sold out a few days ago - big big loss. Whatever they do they need to have enough money to cover their very expensive burn rate for a minimum of 6 month, if they are to change market perspective. If they can change from a train heading for a cliff to a going concern then I will reinvest but not until that is actually clear.

I'm not sure how much their IO business is actually worth in the present market but its sure to be sold at a huge discount as all know ADY can't survive without new money and no one is going to lend to them and a capital raising is virtually impossible no sophisticated investors left out there for ADY.

Best of luck to holders

 

[MS+Tradesim]

Today's announcement:

MEMORANDUM OF UNDERSTANDING SIGNED FOR
THE SALE OF RINCON LITHIUM LIMITED
The Board of Admiralty Resources NL has signed a binding Memorandum of
Understanding (MOU) with Charge Resources Pty Ltd for the sale of the whole of the
Company’s interest in its subsidiary Rincon Lithium Limited. A sale and purchase
contract is currently being finalised.
Rincon Lithium Limited’s assets include the mine tenements in Northern Argentina
(Salar del Rincón and Salar de Río Grande) and the full rights over the patent
application for the production of lithium carbonate from brines.
Admiralty Resources NL will receive a total of A$36,281,536 in four tranches. The first
tranche of A$28,781,536 is receivable at settlement after binding agreements are
entered into, expected to be today or very soon thereafter. The final tranche is
receivable by 30 June 2009.
In addition, Admiralty Resources NL will be entitled to commit a maximum of 10% of
the capital raised should there be an Initial Public Offering (IPO) of the assets of
Rincon Lithium Limited at a discount of 15% to the offer price.
The proceeds of the sale will enable the Company to clear its debts: A$11.8m to
Hawkswood Investments Pty Ltd (in Liquidation), US$12m to Ya Global Investments
L.P. and A$1.94m to Australian private investors. The remaining proceeds will be used
for working capital to expand the iron ore operations in Chile.
The debt due to Hawkswood Investments Pty Ltd (in Liquidation) will be discharged at
settlement and the fixed and floating charge over the Company’s assets will be lifted
The demerger announced on 2 October 2007 will not proceed as Admiralty will have
disposed of its interests in Rincon Lithium Limited for cash.

This is very interesting. I checked on ASIC. Charge Resources Pty Ltd was created on 20/10/08. I suspect they found investors willing to pony up money towards the Lithium project but who refused to touch the iron ore side of ADY. Simple solution? Create a brand new company and spin off the Li business into it. None of the fuss of the demerger and the Li is free and clear of the iron business hassles. Any money that PT is somehow involved in the new company either as an investor or a director.

 

[rub92me]

Today's announcement:
This is very interesting. I checked on ASIC. Charge Resources Pty Ltd was created on 20/10/08. I suspect they found investors willing to pony up money towards the Lithium project but who refused to touch the iron ore side of ADY. Simple solution? Create a brand new company and spin off the Li business into it. None of the fuss of the demerger and the Li is free and clear of the iron business hassles. Any money that PT is somehow involved in the new company either as an investor or a director.

Yep, this stinks to high heaven. First completely balls up your iron business by having the wool pulled over your eyes by shrewd South Americans and then selling a business that has superior economics to iron ore by about 8 times and should be worth about 500 million for a fraction of that.

 

[MS+Tradesim]

Rub,

That's exactly what I'm thinking hasn't happened. I don't believe PT would let the Li go. He knows it inside out. He's spent years on it. The iron business was always about getting cashflow, which never happened. For the sake of ADY shareholders they have to do what they can to keep the company afloat, but I think we can look forward to Charge Resources doing an IPO at some stage and I would GUESS with a reserved portion or discount for ADY holders.

 

[rub92me]

Rub,

That's exactly what I'm thinking hasn't happened. I don't believe PT would let the Li go. He knows it inside out. He's spent years on it. The iron business was always about getting cashflow, which never happened. For the sake of ADY shareholders they have to do what they can to keep the company afloat, but I think we can look forward to Charge Resources doing an IPO at some stage and I would GUESS with a reserved portion or discount for ADY holders.

The original deal for ADY holders was they would get the Rincon Lithium business for free as a spin-off. If you are correct, the best ADY holders can expect is a discount. So maybe PT still has a personal stake in the Li business and it is a good deal for him. I don't know, time will tell. A far superior deal for ADY holders in my opinion would have been to sell off the iron ore business and keep the Lithium. Why keep something that you have already proven you can't manage?

 

[MS+Tradesim]

The original deal for ADY holders was they would get the Rincon Lithium business for free as a spin-off. If you are correct, the best ADY holders can expect is a discount. So maybe PT still has a personal stake in the Li business and it is a good deal for him. I don't know, time will tell. A far superior deal for ADY holders in my opinion would have been to sell off the iron ore business and keep the Lithium. Why keep something that you have already proven you can't manage?

I agree. I'm just taking a guess at what is going on, not necessarily what should be happening. The Li was my primary interest in ADY all along. I'm not holding at the moment but have been awaiting a re-entry point. Now I have no idea until more info is available.

 

[mayk]

In the wake of latest circumstances, what is the future of ADY? How much is their Iron Ore business worth?

Can someone crunch the numbers? Is anyone going to the agm in Melbourne?

 

[Fisherman99]

ADY has no future without Rincon. Nobody will give them cash anymore, they cheated on their investors, they are burning cash. Look at their last quarterly cashflow report, they spent 12.4 millions for production, 1.8 millions for the management. No shipment before 02.2009. There won"t be any improvement in their IO business because they don`t have the monies for the necessary investments, because the management spends the monies for their own good. Last year, they spent 3.5 millions on their own salaries, 2.3 millions for "consultancy + professional expenses" (PT+friends, too???), 872.797 for travel and entertainment (food, drink, women?), 666.153 for motor vehicles (Bentley or Rolls?), 160.411 for office furniture and 3 millions for "overheads" - round about 10 millions for the last year. Read their annual report... Quite a nice party - we paid for it... My opinion is, that this whole thing was planned by PT and his friends. Why should they share any future profits with the ADY-shareholders if they`re able to put the monies in their own pocket? The cash is on the table (Lithium-Tender), but ADY didn`t take it - because "Charge Resources" will do so... And guess who`s behind Charge Resources... ADY was just the instrument for collecting money from investors to get Rincon and Santa Barbara financed and developed - now they are taking over our assets on the cheap. Next step: selling Santa Barbara / going into receivership or going straight into receivership...

 

[sjx]

This company is a joke now..

They are criminals. PT now resigned (probably a good thing..)

Looks like i missed the exit point of Friday.. Should have known