CLE - Cyclone Metals

[nioka]

I cant speak french so I'm glad you post in english. (failed french at school called the teacher "cochon de lait" and we didnt get on after that). To answer your question, I'm still trying to work out why others haven't worked out how good CFE actually is. I'm glad you asked the question, maybe someone out there has an answer.

 

[thebaldfacts]

Maybe I'm just a bit too in love with this stock atm, can anyone mention anything negative about it? Like I'm trying to find bad aspects to this stock but I'm coming up blank.

Idk, this is just my opinion, holding on for the double in price.

I used my divvie to top up @ 33 cents, as I think this has limited downside risk and enormous upside potential.

The only negatives I can see is that some people doubt that the balance of $80M for the Cape Lambert sale will be received (something TS has strongly denied) and that due to the business model, the market is never going to attribute full value to the sum of the parts as it relies on the monetising of the parts by sale before any value is ascribed to it.

It is interesting that prior to the IPO of lady Annie, the price got to 63.5 cents in February (at a time when the all ord's was at 5000 admittedly) but fell away when the IPO fell over. After the trade sale was announced it bounced to 54 cents but never recovered that price.

 

[nioka]

The only negatives I can see is that some people doubt that the balance of $80M for the Cape Lambert sale will be received (something TS has strongly denied) and that due to the business model, the market is never going to attribute full value to the sum of the parts as it relies on the monetising of the parts by sale before any value is ascribed to it.
.

Even that may not a negative as CFE will get back Cape Lambert if conditions are satisfied and the money is not paid. That is why the deal is not likely to fall over.

 

[No Gain]

Can someone explain todays announcement between CFE and CHM to me, I'm a bit lost on it.
Is it saying that CFE will provide a credit facility to CHM of $6,500,000 and in addition purchase $2,000,000 worth of placement shares and placement options at.1.5cents from CHM.
On top of that Tony Sage is buying $400,000 of shares/options and Jason Bontempo is buying another $100,000 worth.
So in total is that $9,000,000 of funding but with no shares or options for the $6,500,000. Or if there are shares and options for CFE from the 6.5 mil the question is how much. That is how much of CHM do CFE shareholders now hold.

If there are no shares or options for the 6.5 mil what are the terms?

 

[nioka]

Can someone explain todays announcement between CFE and CHM to me, I'm a bit lost on it.
Is it saying that CFE will provide a credit facility to CHM of $6,500,000 and in addition purchase $2,000,000 worth of placement shares and placement options at.1.5cents from CHM.
On top of that Tony Sage is buying $400,000 of shares/options and Jason Bontempo is buying another $100,000 worth.
So in total is that $9,000,000 of funding but with no shares or options for the $6,500,000. Or if there are shares and options for CFE from the 6.5 mil the question is how much. That is how much of CHM do CFE shareholders now hold.

If there are no shares or options for the 6.5 mil what are the terms?

I understand the shares and options are around 15% of the company. CFE appoints half the board and you can be sure that the terms of the loan favour CFE. Seems as though Tony Sage dealt himself a piece of cake as well.

 

[nioka]

PERTH (miningweekly.com) ASX-listed resources group Cape Lambert has signed a strategic alliance agreement with fellow-listed resources company Chameleon Mining.

Cape Lambert said in a statement that the agreement would not only see it become a significant shareholder of Chameleon, but would also ensure it had exposure to one of the largest iron-ore prospective landholdings in the emerging mid-west region of Western Australia.

Cape Lambert has agreed to provide Chameleon with a credit facility of up to A$6,5-million, which would enable it to more actively pursue further mining opportunities as well as develop its existing exploration interests.

In turn, Cape Lambert would appoint Tony Sage, Jason Bontempo and Paul Kelly to the Chameleon board as its three representatives.

Cape Lambert would also assume responsibility for all technical activities associated with the evaluation and exploration of the assets owned by Chameleon.

Sage believes the agreement with Chameleon represented a unique low-cost opportunity to further increase its exposure to the emerging mid-west iron-ore province.

"I have at all times stated that our aim is to be one of the largest landholders of iron-ore prospective tenements in the emerging mid-west region of Western Australia", Sage said.

"In a short amount of time, both Cape Lambert and our associated company Fe Limited has amassed a significant land position in the mid-west, something we will continue to do as I believe this area of Australia has the capacity to rival the Pilbara in terms of its world standing as an iron-ore province", he added.

Cape Lambert holds 17% of Fe Limited, which has access to over 3 000 km² of iron-ore prospective land in the mid-west region.

In addition to the provision of a credit facility, Cape Lambert has also agreed to subscribe for shares through a placement Chameleon has recently completed. In total, Chameleon has placed more than 166,6-million shares at A$0,015 a share with a three-for-five attaching option exercisable at 1,5c on or before December 31, 2012, to raise A$2,5-million.

Of the total, Cape Lambert has subscribed for A$2-million worth, representing more than 133,3-million shares at A$0,015 a share.

Chameleon has tenement holdings in the mid-west of Western Australia, prospective for iron-ore and gold, which are in proximity to tenements held by Cape Lambert or its associated companies.

http://www.miningweekly.com/article...ncrease-mid-west-iron-ore-exposure-2010-08-10

 

[vincent191]

Do your research on CHM very thoroughly. Look at who are on the board of Directors and research their background. Also look at some of the postings on the CHM tread. If you conclude that they are seriously into fe mining then make up your own mind.

 

[prawn_86]

Do your research on CHM very thoroughly. Look at who are on the board of Directors and research their background. Also look at some of the postings on the CHM tread. If you conclude that they are seriously into fe mining then make up your own mind.

I agree with your sentiment, but if CFE load the board up, its possible they could take CHM in a new direction

 

[nioka]

I agree with your sentiment, but if CFE load the board up, its possible they could take CHM in a new direction

Because CHM has been such a dog in the past it was a cheap proposition for CFE to take up a significant holding for a pittance. Sage has demonstrated his ability to turn losers into winners and I doubt if he would have entered into the arrangement without there being a chance of doing something profitable with an investment there. He will have control via the board so I expect that I will profit via my shareholding in CFE.

I have also bought 100,000 CHM, on the strength of the above information, for my daughter.

 

[vincent191]

CHM has been put into a voluntary suspension pending clarification of the appointment of a receiver by International Litigations.

I smell something rotten. Their legal expenses are funded by some international litigation funder who will get 60% of any payment from their court case against MMX. Obviously somebody doesn't like the latest development with CFE.

Let us assume CHM wins against MMX and 60% goes to the un-named litigation funder, whats in it for the CHM/CFE venture? I assume itt is the litigation funder who has control over Jack Hills.

 

[nioka]

CHM has been put into a voluntary suspension pending clarification of the appointment of a receiver by International Litigations.

I smell something rotten. Their legal expenses are funded by some international litigation funder who will get 60% of any payment from their court case against MMX. Obviously somebody doesn't like the latest development with CFE.

Let us assume CHM wins against MMX and 60% goes to the un-named litigation funder, whats in it for the CHM/CFE venture? I assume itt is the litigation funder who has control over Jack Hills.

I wouldn't get too worried about the situation with CHM. If there wasn't something odd happening then it wouldn't have attracted Tony Sage.That is also why it is there as a bargain for CFE to grab. Sage has put a lot of his own cash in as well as money from CFE. I'll go along with the thought that he will win on this one as he usually does and holders of CFE will win along with him. The litigation funder can only have a claim for a debt to be paid. If the debt is paid then that ends any claim. CFE money has the debt covered I assume.

 

[vincent191]

I think the litigation funder put in the $1.5 million court costs deposit (from memory) for CHM. The funder is not going to let CHM just walk away especially if there is any chance of CHM winning some sort of payout from MMX. If the Singaporean funder is who we think he is (CHM will not disclose his name) litigation is his profession and he had won some major cases in Europe, he is not going to be that easy to shake off.

Anyway no point in me speculating I think the whole mess will be sorted out shortly and I hope CFE gets the CHM carcass and kick Benny and his porno mate out the backdoor.

People have long since forgotten that the judge insist that CHM lodge this big deposit for legal costs before he will even hear the case. Such a deposit is common when the judge doubts the party's ability to pay should the verdict go against them. Further, if the judge doesn't like your chances of winning he may ask for a large deposit or ask you to top up the deposit after preliminary hearings. Such had been the case with CHM.

For more info google Rebecca Urban a WA journalist who did a lot of investigation into this case.

 

[nioka]

Chameleon expects to emerge from receivershipThe West Australian
August 13, 2010, 12:42 pm
Chameleon Mining says it expects its receivership, brought about by its litigation funder, will be lifted next week in a Supreme Court decision.

The Singapore-based International Litigation Partners moved to appoint an insolvency firm as external receiver to Chameleon.

A Chameleon spokesman said ILP had alleged the mineral explorer had breached the terms of a $20 million fixed and floating charge secured by ILP over Chameleon last year, which prevented the Sydney-based Chameleon from granting security over its assets to a third party.

Chameleon had allegedly committed the breach on Tuesday when it entered into a deal with Cape Lambert Resources.

The strategic alliance between Chameleon and Cape Lambert would see Chameleon issue shares to Cape Lambert, which would arrange a credit facility of up to $6.5 million for Chameleon.

Chameleon later on Wednesday obtained from the Supreme Court of NSW an injunction to restrain the receiver from acting, the Chameleon spokesman said.

The spokesman said the receiver yesterday submitted an application to dissolve Chameleon's injunction, "which failed on all counts".

"The judge (Justice Clifford Einstein) said that these matters are urgent and must be dealt with on a final basis as soon as possible," the spokesman told AAP on Friday.

"We're in court again next week, hopefully as early as next Tuesday to commence a final hearing, a determination of whether the receiver should be removed.

"We're confident that we've got them covered."

International Litigation Partners could not be immediately contacted for comment.

Chameleon on Tuesday said in a statement that Cape Lambert's investment was an endorsement of Chameleon's decision to take a dispute with iron ore miner Murchison Metals over the Jack Hills iron ore assets in the State's Mid-West to the Federal Court of Australia.

That action is ongoing.

Chameleon shares were suspended from trading on Wednesday pending an announcement and last traded at 2.3 cents.

 

[No Gain]

Hi Nioka, you seem to be following and know a bit about CFE. This DMC purchase - has there been any talk from CFE of their intentions and any comment around on the price paid and future prospects. That is was it a good move by CFE in the view of market researchers or a bad move, or is it a wait and see.

 

[nioka]

Nogain,
This is an odd one for CFE and it is hard to work out what is going on here. To date Tony Sage has made few mistakes and has pulled off some big ones. He keeps buying CFE and he has put a lot of his own money into DMC as well as CFE's money. He seems to be playing it close to his chest and not many other people, if any, know what is really going on. I doubt that he has gone this far withought giving the business a lot of thought. I'm happy to go along with him until I see something that alarms me, especially while he has his own money in play.

 

[nioka]

This is from todays announcement.
" Key Findings
The supergene hematite results from the 2010 drilling generally confirm the iron grades from
the 1975 shallow surface drilling by earlier explorers, which forms the basis for the current
2008 Inferred Mineral Resource of 33.1 million tonnes at 55.5% Fe. Drill holes MKDD001
and MKDD002, however demonstrate that additional transported, supergene material exists
outside of the 1975 drilling and 2008 resource thereby enabling the resource size to be
increased.
The hematite iron mineralisation is associated with low phosphorous and sulphur.
The primary magnetite banded iron formation (BIF) Fe grades are typically higher at 32 -
36% than other magnetite projects.
The primary magnetite BIF lenses vary from 50 to 200m thick and extend to more than 300m
below surface over the full 7km strike length of the two prospects.

Cape Lambert Executive Chairman, Mr Tony Sage said these initial drill results indicate that the hematite cap DSO potential was of better iron grade and larger than initially thought, which improves the prospects of early cashflow from an initial DSO development.

Mr Sage further added the grade of the underlying magnetite was typically higher than other magnetite projects at 34-36% Fe. For example the 10 billion tonne JORC resource Tonkolili project in Sierra Leone, West Africa has a magnetite grade of approximately 30% Fe, and 25% of that project is in the process of being sold to major Chinese steel group, Shandong Iron & Steel for US$1.5 billion, valuing the project at US$6.0 billion."

While CFE has many irons in the fire this is its largest project at this stage and one that should pay off well for holders of CFE. DYOR.

 

[No Gain]

I had a look at the Buys and Sells for CFE today and was wondering why there are so many trades of 1 to 10 shares (.37 cents to $3.70) at 37 cents. There are some meaningful trades at .37cents but most of the quantity is going through at .375. What's going on? If someone only trades one share are they still up for the usual trading fees? The only reason I can think of why someone is trading in this fashion is to make it look like CFE are down 1 cent for the day. Any other ideas?

 

[ParleVouFrancois]

On "the other site" there has been much discussion of a capper in place, keeping the share price down in order to buy time for a company to organise finance to buy out CFE. I don't really subscribe to this theory (well, it'll be true if we have a T/O offer in the next few months but other than that it sounds a bit dodgey), I read that Delong Holdings have been selling down, imo this has been causing the depressed share price recently. However I'm rather hopeful that with the sale of Marampa (for 500 million as TS has said it's worth in the past) we'll see a big rerating of CFE, towards the 50-60 cent mark. However this will only occur once it is actually happening, the market recently doesn't seem to want to price much potential in the smaller caps. Especially ones with exposure to South Africa (GDO + CCC are two other examples).

 

[No Gain]

I thought that there may be some sort of intention to keep the price down. A take over offer usually starts at a premium to the average share price so it would make sense to keep the sp down prior to making an offer. However there may be other resons to keep the SP down as well. What they are I don't know. If there is a rerating to 50 -60 cents that would be nice for me as I've held for a while now.

 

[noie]

Announced yesterday.

The Board of Cape Lambert Resources Limited (Cape Lambert or Company)
(ASX:CFE) is pleased to announce that, as part of a capital management program, it intends to implement an on market share buy-back (On Market Buy-Back).
The Board has determined to introduce the On Market Buy-Back for up to 10% of the Company’s fully paid ordinary shares (Shares).
The On Market Buy-Back will comply with the provisions set out in the Corporations Act and the ASX Listing Rules and does not require shareholder approval.
Patersons Securities Limited has been appointed by Cape Lambert to act as broker to the On Market Buy-Back. The earliest that the Company will be permitted to buy-back any Shares on market will be 22 October 2010.