FLX - Felix Resources

[noirua]

Felix closed at $9.17 up 90% on the years low of $4.80, a few weeks ago.

Thanks for all the information m_s. Some from certain posters is misleading or out of date, as anyone investing may care to know.

The stated 5.3 million tonnes for the year ending 30/6/2009 will be difficult to achieve as the first quarter was down at 960 million tonnes. Sales for the Yarrabee mine are also a bit disappointing and semi-soft coking coal out of the Ashton mines are unlikely to reach expected levels due to port restrictions at Newcastle.

The profits last year were boosted by sales of 20% of the Moolarben Project and no sales are expected for the current year.

Figures of 16.7 million tonnes in year ending 30/6/2012 are now extremely unlikely. Production at Moolarben is well behind schedule and will only start in early 2010 with no hitches. The underground mine, if it goes ahead on schedule, will be in production now in 2012.

The comment on coking coal is highly misleading as it is only produced from the Ashton mine in the Hunter. Highest production for Felix who own 60% of the mine will be 2.3 million tonnes per annum (mtpa).
All coal at Yarrabee will be PCI coal and may reach 3.8mtpa by year ending 30/6/2010.
All coal at the Minerva mine, Felix have 51%, is all thermal coal and Felix interest about 1.3 mtpa.
All the Moolarben coal is thermal coal and about 40% of the open-cut mine is lower grade power station coal for the new power station in the Hunter. Maximum production for Felix by 2014 is 10 mtpa but more likely at 9 mtpa.

Felix may later add mines at Harry Brandt, Wilpeena and Athena. These mines may replace rundown at Yarrabee and Minerva around 2016 onwards. The former Harry Brandt will be a new Anthracite mine.

Felix are exploring the Phillipson deposit in South Australia with a new office in Adelaide. This possible diesel from coal project is probably for 2016 or very much later.

 

[noirua]

Felix closed at $9.17 up 90% on the years low of $4.80, a few weeks ago.

Thanks for all the information m_s. Some from certain posters is misleading or out of date, as anyone investing may care to know.

The stated 5.3 million tonnes for the year ending 30/6/2009 will be difficult to achieve as the first quarter was down at 960 million tonnes. Sales for the Yarrabee mine are also a bit disappointing and semi-soft coking coal out of the Ashton mines are unlikely to reach expected levels due to port restrictions at Newcastle.

The profits last year were boosted by sales of 20% of the Moolarben Project and no sales are expected for the current year.

Figures of 16.7 million tonnes in year ending 30/6/2012 are now extremely unlikely. Production at Moolarben is well behind schedule and will only start in early 2010 with no hitches. The underground mine, if it goes ahead on schedule, will be in production now in 2012.

The comment on coking coal is highly misleading as it is only produced from the Ashton mine in the Hunter. Highest production for Felix who own 60% of the mine will be 2.3 million tonnes per annum (mtpa).
All coal at Yarrabee will be PCI coal and may reach 2.8mtpa by year ending 30/6/2010.
All coal at the Minerva mine, Felix have 51%, is all thermal coal and Felix interest about 1.3 mtpa.
All the Moolarben coal is thermal coal and about 40% of the open-cut mine is lower grade power station coal for the new power station in the Hunter. Maximum production for Felix by 2014 is 10.4 mtpa but more likely at 9 mtpa.

Felix may later add mines at Harry Brandt, Wilpeena and Athena. These mines may replace the rundown at Yarrabee and Minerva around 2016 onwards. The former Harry Brandt will be a new Anthracite mine.

Felix are exploring the Phillipson deposit in South Australia with a new office in Adelaide. This possible diesel from coal project is probably for 2016 or very much later.

Yarrabee coal production corrected from 3.8mtpa to 2.8mtpa, and maximum from Moolarben at 10 to 10.4mtpa.

 

[noirua]

Much talk everywhere about a bid for Felix Resources. Strangely the possible bidders have themselves been hit by the crumbling coal and iron ore sector and surviving is now the order of the day.

Felix will give their Second Quarterly report on 30th January 09 and Half Yearly on 18th February 09. These reports should still make good reading as only spot prices will have been hit and only 30% of currency is hedged.

The interim dividend was 3 cents in 2008 at halfway and that should be well beaten.
Profits will be the interesting point and whether sales of semi-soft coke and PCI coal have held up.

 

[pacestick]

Has anyone heard of the latest play on the ucc project .Its significance was downplayed at the AGM by the MD I had an idea that a shipment had been sent to Japan for evaluation but I cant find any reference to it

 

[noirua]

Much talk everywhere about a bid for Felix Resources. Strangely the possible bidders have themselves been hit by the crumbling coal and iron ore sector and surviving is now the order of the day.

Felix will give their Second Quarterly report on 30th January 09 and Half Yearly on 18th February 09. These reports should still make good reading as only spot prices will have been hit and only 30% of currency is hedged.

The interim dividend was 3 cents in 2008 at halfway and that should be well beaten.
Profits will be the interesting point and whether sales of semi-soft coke and PCI coal have held up.

Following the somewhat sudden turnaround by Macarthur Coal today and confirmation of postponed shipments, we should take a quick look at Felix again.

Felix have not forecast profits for the half year to December 31st or the full year. So analysts have been left to guess, or is it estimate. Their previous average estimate was EBIT$412 million for the full year.

Macarthur export mainly PCI coal, and Felix only PCI coal from its 100% owned Yarrabee mine, and shipping appears to be well down on expectations.

Shipping from the Minerva mine have been surprisingly good and about 20% up on expected levels. This is a thermal coalmine with single shiploads.

The Ashton mine exports of semi-soft coking coal in October, November and December are not known. But MAY have been affected by the downturn.

Development of the new mines at Moolarben continue with infrastructure being built.

Coal sales in the first quarter were down at 986,000 tonnes due to Yarrabee stocking for the new wash plant, and holdups at Ashton. Will be interesting to see the second quarter results.

 

[noirua]

The FLX share price still continues to be a puzzle. Are there bids on the table now or just interested companies waiting for the sector to tumble further?
Felix have said they are not cutting coal production. Well, they seem to be getting loads of coal out of Gladstone from the Minerva mine and appear about 30% ahead of forecasts, up until 31st December 08, however, Yarrabee PCI coal shippings appear to have slipped and news from the semi-soft coking coal mines at Ashton in the Hunter, are awaited.

 

[noirua]

FLX continue to plug away at shipping thermal coal from their QLD coal mine at Minerva (51%). January shipping out of the RG Tanna Terminal, Gladstone Port, is 125,000 tonnes eta 20/1/09 and 63,000 tonnes eta 23/1/09.

 

[pacestick]

Recently had to cross koorangang island where the ncig is being built felix a partner. There seems to be a lot of work already commenced . Although I have some difficulty with the site itself as the larger bulk carriers can not completley fill here even with dredging. I dont know why they didnt follow the example of point hay in queensland or cape lambert iron ore W.A. and build a long wharf out to sea maybe the continental shelf is to shallow here

 

[noirua]

Recently had to cross koorangang island where the ncig is being built felix a partner. There seems to be a lot of work already commenced . Although I have some difficulty with the site itself as the larger bulk carriers can not completley fill here even with dredging. I dont know why they didnt follow the example of point hay in queensland or cape lambert iron ore W.A. and build a long wharf out to sea maybe the continental shelf is to shallow here

Thanks for the info. As to dredging depths and long wharfs out to sea, you may be one of the very few to notice this.

The Koorangang Island terminal looks as if it's going to be available just at the time coal sales drop away sharply. Though some might say that it's mainly thermal to semi-soft coke being shipped and not much semi-hard to hard coke, and therefore will not be as bad as all that.

Felix have up to 10 million tonnes of thermal per year out of the new Moolarben mine to sell. About 4 mtpa from 2010. Fortunately this low cost mine will do well if thermal falls to US$70 (AU$104) per tonne. Mining cost per tonne was given at AU$30 per tonne in 2004/5. (Info cited from the amalgamation document at the time of the Felix Resources merger with White Mining.)

 

[noirua]

Tough times ahead in the coal sector. Will be interesting to see if Felix are blown off course at all.

Need to spend Aussie (about) $320 million over the next 3 years in developing their 80% share of the Moolarben Project. Hopefully the cost will be a bit lower in the present low steel price climate.

Reported to have $300 million in the bank up until end Sept 2008. Spending on Moolarben started apace last December, just as coal prices and the credit crunch had started to bite hard.

The stock price is holding just above $8.00 with some takeover possibilities probably still in the share price.

Felix Resources may still be considering bids in this climate as the low cost Moolarben open-cut and underground mines - due to produce up to 13mtpa of low cost thermal coal - may still be of interest.

 

[noirua]

Felix Resources executive director Hans Mende has bought 158,927 shares in Felix resources. ( 62,949 at $8.5751 average and 95,978 at $8.6216 average).
He is a 50% owner of AMCI, a private American coal company, that holds a 19.2% stake in FLX.

Felix MD Mr Brian Flannery had said, that all the major holders would stand firm together in the face of bids for the company and would act together.
Since the credit crunch arrived that situation may have added pressure on some holders.

 

[pacestick]

What I find interesting is that it was an on market purchase not an off market purchase from a fellow director. The next week or two should show if there are implications for other shareholders

 

[noirua]

I wish I was as confident as your post information Nick Radge. Oil is still under pressure and markets look stressed out.
Still, strange things have happened and bidders for FLX may be hoping the FLX share price moves up. This may seem odd but they are in a catch 22 situation: They can't bid more than double the present price to get the FLX directors to agree an offer, as their own shareholders may object.

 

[noirua]

Felix Resources second quarterly report is out on Thursday.

Shareholders will be more interested in any statement concerning Felix going over to selling more thermal coal instead of PCI coal and semi-soft coke.

Since the announcement by MD, Mr Brian Flannery, that October was the best month ever, it seems as if there was a big decline in November and December, that has worsened in January and February on the PCI coal and semi-soft coke front.

Only 18,700 tonnes of Yarrabee PCI coal was shipped in January, showing a marked decline. Minerva mine taking up some of the slack with a big increase in sales during that month.
It should be pointed out that thermal coal profits are very much less than PCI coal. Or at least they were up to October.

Felix Resources will have gained something from the plunging AUD and that figure may not be known until the half yearly report that is out at the end of February.
Currency agreements generally run for 6 month periods and how Felix's run has not been announced.

 

[noirua]

Felix Resources 2nd Quarter Report: http://www.felixresources.com.au/si...5_20090129_December_2008_Quarterly_Report.pdf

Basics of report: Net profit for first half forecast at $160 - $170 million ($228 - $242 million EBIT). One off $59 million gain, not included in forecast that covers closing out of coal swaps.

Cash held of $300+ million with $37 million debt.

Company is moving, since December, to selling more thermal coal from the Minerva mine to make up for a drop in PCI coal sales from Yarrabee. Sales of some semi-soft coke from the Ashton mine is expected now to be replaced by sales of thermal coal.

Felix have put back the expansion of the Yarrabee mine from 1.9mtpa to 2.8mtpa until markets improve.

Felix are continuing with work on the Moolarben open-cut mine, due to produce in 2010. 2.8mtpa of thermal coal has been sold in forward contracts for the life of the mine at market prices then prevailing.

Felix are to drill the Phillipson permits in South Australia where gravity anomalies have been shown in three places.

 

[noirua]

Felix Resources are moving up today against the general trend in the market and probably a slow reaction to the excellent second quarter results.

Should move on a bit more this week as the takeover factor appears to be removed from the stock. Felix may well have a good chance of achieving the analysts average forecast of just over EBIT$400 million for YE 30th June 2009.

The maintenance of the 2008 53 cent dividend depends on the Directors confidence in having enough cash to fund the 80% of the Moolarben Project, that's 80% owned by Felix.

 

[michael_selway]

Felix Resources are moving up today against the general trend in the market and probably a slow reaction to the excellent second quarter results.

Should move on a bit more this week as the takeover factor appears to be removed from the stock. Felix may well have a good chance of achieving the analysts average forecast of just over EBIT$400 million for YE 30th June 2009.

The maintenance of the 2008 53 cent dividend depends on the Directors confidence in having enough cash to fund the 80% of the Moolarben Project, that's 80% owned by Felix.

Yeah that takeover is still a mystery, wished they woudl at least give a hint on who the parties were! I sold this one at $16.50, but have bought back in at much lower prices

Their very low debt really makes them so attractive for anyone to takeover

Thanks

MS

Earnings and Dividends Forecast (cents per share)
2008 2009 2010 2011
EPS 51.8 174.9 122.7 125.2
DPS 53.0 57.3 20.8 41.3

Date: 30/1/2009
Author: Luke Forrestal
Source: The Australian Financial Review --- Page: 48
Shares in coal miner, Felix Resources, closed $A0.29 higher on 29 January 2009,at $A6.90. The rise came as the company issued an ultimatum to suitors led byYanzhou Coal Mining. Although a deadline has not been given, Felix directorshave warned the suitors they need to make a decision on whether they willformally bid for the Australian company. Felix produced an estimated 1.14million tonnes of coal in the December 2008 quarter

 

[noirua]

Yeah that takeover is still a mystery, wished they would at least give a hint on who the parties were! I sold this one at $16.50, but have bought back in at much lower prices

Their very low debt really makes them so attractive for anyone to takeover

Thanks

MS

Price continues up this morning. It does surprise me how the stock stays so low when profits continue along merrily.
There was much talk about an offer around $12 per share - pure speculation - and an older one around $20. I think we can rule these out as games being played.

There appears no way a company could make an offer to satisfy the major holders with 69% of the stock. After all, the bidders, except BHP, have seen their shares tank worse than Felix Resources.
Which company could possibly make an outrageously high bid without their shareholders grumbling in today's markets? They need their support. I suppose only a private company or a Chinese company with their governments backing could bid - highly unlikely in my view.

 

[mitch87]

great company with great assests, regardless of a takeover the price increase is warranted, however the speculators may be back, i can only see yanzhou making the bid with gov backing, and with 2-3b in cash, although s.h support is highly unlikely.

 

[noirua]

great company with great assests, regardless of a takeover the price increase is warranted, however the speculators may be back, i can only see yanzhou making the bid with gov backing, and with 2-3b in cash, although s.h support is highly unlikely.

Yes, it could just be speculators moving in today as I can't see any very large bids. Some UK investors seem to be more interested again now as the stock has fallen so much.
Probably todays ASX announcement stirred up interest: http://www.asx.com.au/asxpdf/20090203/pdf/31fw5fv13fxn0z.pdf