AFL - AF Legal Group

[TabJockey]

Anny today very good news. One concern I had was their production costs, which are apparently "significantly improved". Gold production up to 22,667 ounces a quarter which is about 31million in revenues. Costs will be around 23M for the quarter, that's 8M of earnings for the quarter or around 8% of the market cap...in one quarter.

Maybe investors look at the yahoo figures (which are way out of date) and think that NAV has debt and is therefore riskier than it actually is?

NAV has a net cash position, I expect another 2M of its 13M debt to be retired this quarter. I am not in a hurry for the market to rerate this one, but I will expect some price movement when the spin off is finalised in the next month or two.

 

[Logique]

Yeah looking good TJ.

New monthly and quarterly production records set at the Bronzewing Gold Project.

The spin-off JV - initially 25% of the Cummins Range REE project (into Kimberley Rare Earths - KRE - in exchange for shares in KRE) record date is forecast for March 2011, which as you say should attract market attention. Especially given that the majority of these shares in KRE will be re-distributed back to existing NAV holders via an in specie distribution.

Also, under the terms of the JV, KRE will be granted a right to acquire an additional 30% interest in Cummins Range, by paying $10Mill within a four year period... KRE would eventually have a 55% interest in the JV.

 

[TabJockey]

The spin off is a great strategy to get some value for shareholders. I am impressed by the management of this company, they are really trying to get out there and raise awareness plus the mine is ticking along nicely.

But as I see it, the entitlements to NAV holders are just a bonus, I dont rate their rare earths resource as something I would want to invest in. We are not sure if production there would be profitable, even at current prices and if it turned out to be its many many years away. Just because they have a big JORC does not mean that its worth allot, rare earths are not really that hard to find.

So once the spin off is floated, I would expect the market to notice and drive the price up (seem to be very interested in rare earths at the moment) my plan is to sell whatever holding I have in it on this first rally.

But I will be keeping NAV. Only risk is if gold prices drop <1000. The falling AU will help NAV in the 2nd half of 2011 also.

 

[Logique]

...I dont rate their rare earths resource as something I would want to invest in....

Still think so TJ? Look who's come onto the Board of KRE (ASX Anns today).

'..has accepted the company’s invitation to join the board of subsidiary company
Kimberley Rare Earths Limited (KRE, or “the company”), which plans to list on the ASX
in the second quarter of 2011...
...an engineer with recognised international experience gained over a 35 year
career, based mainly in Australia and South Africa. He has managed complex large
scale mining and metallurgical operations and projects with distinction.
Previously, Mr Rowe was the Project Director of the Fimiston Expansion (Kalgoorlie
Superpit), General Manager of the Boddington Gold Mine and of the Boddington
Expansion Project and Managing Director of Bulong Nickel. From 2004 Peter
led AngloGold Ashanti Australia before moving to Johannesburg where he served as an
Executive Vice President for AngloGold Ashanti Limited until his retirement in 2009...'

 

[TabJockey]

Yeah I read it. Great but...we are still at .23 for a reason.

 

[Logique]

ASX Ann today: Navigator's Cummins Range Rare Earth Project
http://imagesignal.comsec.com.au/asxdata/20110315/pdf/01161810.pdf

Key Points
 Prospectus lodged with ASIC on 14 March 2011 and is available at
www.kimberleyrareearths.com.au
 Record date for the Priority Offer is 4 April 2011 (“Priority Offer Record
Date”)
 Record date for the pro rata distribution of free KRE shares to eligible
Navigator shareholders is 16 May 2011 (“Distribution Record Date”)
 Timetable released - details below [see the Ann]

 

[TabJockey]

ASX Ann today: Navigator's Cummins Range Rare Earth Project
http://imagesignal.comsec.com.au/asxdata/20110315/pdf/01161810.pdf

Key Points
 Prospectus lodged with ASIC on 14 March 2011 and is available at
www.kimberleyrareearths.com.au
 Record date for the Priority Offer is 4 April 2011 (“Priority Offer Record
Date”)
 Record date for the pro rata distribution of free KRE shares to eligible
Navigator shareholders is 16 May 2011 (“Distribution Record Date”)
 Timetable released - details below [see the Ann]

Whats remarkable about these announcements was how mistimed they where. Who cares about a pro rata distribution on a day when the NIKKEI was down 14%?

NAV management may know how to run a mine but have looked pretty shaky at managing share price appreciation. 65M market cap now for a company set to make 20-25MM profit FY12.

 

[ozbecool]

Can somebody explain 29 Mar 2011 EGM notice in plain language ? I.e. a person who would not want to participate in KRE - will one get any money instead ? Or is it : "if you do not take the 1:10 offer then you will loose out because NAV shares will go down after demerger" ?

Great thanks

 

[Logique]

Well the main thing is that in December, NAV were proposing that an 'eligible shareholder' would mean someone with a minimum holding of 10,000 shares at the Record Date 4 April. Although I couldn't see where this is stated on the latest 29 page offer document.

So 'eligible holders' will get a priority offering of stock in KRE. After this, there will be a public offering, open to anyone. And after that, once KRE is listed, an in-specie distribution of 1 KRE for each 20 NAV held.

So if an eligible holder, you don't have to do anything. You will have the opportunity to buy KRE shares.

If you want the priority offer and the later in-specie distribution, make sure you have the minimum number of NAV shares by the Record Date.

As for the future of NAV shares post demerger, I have no concerns. Note my post above: "..Also, under the terms of the JV, KRE will be granted a right to acquire an additional 30% interest in Cummins Range, by paying $10Mill within a four year period...KRE would eventually have a 55% interest in the JV.."

 

[ozbecool]

So if I do not do anything, i.e. I keep holding my NAV shares (way more than 10k) till at least 09 May and do not apply for any KRE shares then I will be entitled to a KRE share for 20 NAV shares for 'free' and if I sell NAV shares on 10 May or later then I still get 'free' pack ?

 

[Logique]

So if I do not do anything, i.e. I keep holding my NAV shares (way more than 10k) till at least 09 May and do not apply for any KRE shares then I will be entitled to a KRE share for 20 NAV shares for 'free' and if I sell NAV shares on 10 May or later then I still get 'free' pack ?

Yes ozbecool, broadly as you describe - except for the date. As on page 2 of the 15 March ASX announcement, the 1 for 20 in specie Distribution Record Date is listed as = 16 May 2011, ie hold shares that evening.

Don't forget that the whole deal is subject to shareholder vote at the EGM on 6 May.

 

[Logique]

ASX Ann on 3 May 2011 - looks like a popular IPO.

ASX Code: NAV ACN: 063 366 487
ASX ANNOUNCEMENT & MEDIA RELEASE
3 May 2011
KRE IPO OVERSUBSCRIBED: Navigator Resources Limited (ASX: NAV) (“Navigator”) is pleased to advise that the prospectus for the IPO of Kimberley Rare Earths Limited (KRE) has been substantially oversubscribed for both the Priority Offer and the Public Offer.

To assist with the extra demand, after consultation with BGF Equities who are the Lead Managers to the IPO, KRE has issued a Supplementary Prospectus to accept offers for an additional 19,635,234 shares ($3,927,047) which was reserved under the Prospectus for Navigator Optionholders to exercise options into shares to participate in the Priority Offer. To the extent that these options were not exercised, this capacity remains available. This extra issue will still not satisfy demand and there will be a scale back applied to both the Priority and Public Offers.

The Public Offer closing date remains 5pm Perth time on 5 May 2011. The Priority Offer closed on 21 April 2011.
The Directors of Navigator and KRE are very pleased with the overwhelming support of Navigator shareholders and the public for the IPO.
Managing Director
NAVIGATOR RESOURCES LIMITED

 

[TabJockey]

To anyone following this stock, its a complete disaster. Looks like cash costs spiked up, all the debt is due and the company does not have the cash. Forced into a capital raising at 4c, its still probably not a t good buy at current price of 2.9c. If the capital raising goes ahead the shares will be heavily diluted, if the company goes into liquidation shareholders will probably get nothing. Complete wipeout for holders.

 

[LifeChoices]

Bought into this debacle Tuesday at 2.7 cents. For about 10 minutes I was kind of happy with what I had done, then the market closed for the day and reality sunk in.

Shares were in trading halt today and will open up again on Friday. This company has serious issues.

It was one of those double or nothing sort of punts. However, after a day reflecting on this, it sounds like nothing is going to be a very likely possibility. I could kick myself sometimes for making these high risk trades.

 

[Crom]

I hear you!

I sold my entire holdings at just over 4cents for the tax loss, then with the monies minus the brokerage bought them back plus more. For a short while I thought nice trade CROM. Now I'm thinking that this will now be the third company that has gone belly up on me. The other two were CMR (compass resources), and RNG (Range river resources).

While all three have producing assetts, the problem was and is management. Make mental note over and over, do not invest in companies with a record of poor decision making, no matter how good the price looks!

 

[LifeChoices]

Oh great, been waiting two days while exercising my "refresh" and "sell" finger and the stock is now suspended pending the release of an announcement.

This doesn't sound like good news.

 

[skyQuake]

Oh great, been waiting two days while exercising my "refresh" and "sell" finger and the stock is now suspended pending the release of an announcement.

This doesn't sound like good news.

Its the cap raising news - see prev announcement re rights issue.

 

[LifeChoices]

Eventful day for NAV holders.

Came out of a trading halt with another revised rights issue - this time underwritten to $20M with no reprising.

Offering a 7 for 2 issue at 2 cents with a 1 for 2 attaching free option, exercisable at 4 cents to raise up to $32.6m.

I'm not really sure about the meaning of the 1 for 2 attaching free option, exercisable at 4 cents - can someone explain that for me?

After a couple of hours trading this morning the shares were suspended and all or orders purged due to an ammendment of the dates. Just began trading again at 12:15pm.

I managed to sell 77% of my stake in it for 3 cents a few minutes ago. I'll keep the other shares and consider the rights offer. It's been a pretty exciting ride so far.

 

[blackjack]

Eventful day for NAV holders.

Came out of a trading halt with another revised rights issue - this time underwritten to $20M with no reprising.

Offering a 7 for 2 issue at 2 cents with a 1 for 2 attaching free option, exercisable at 4 cents to raise up to $32.6m.

I'm not really sure about the meaning of the 1 for 2 attaching free option, exercisable at 4 cents - can someone explain that for me?

After a couple of hours trading this morning the shares were suspended and all or orders purged due to an ammendment of the dates. Just began trading again at 12:15pm.

I managed to sell 77% of my stake in it for 3 cents a few minutes ago. I'll keep the other shares and consider the rights offer. It's been a pretty exciting ride so far.

IMO
this is a dead horse
no amount of flogging will get it up and running
i didnt lose to much
but i feel the market wont trust this company anymore
badly managed and ticked off by the ASX
mmmmmm

 

[LifeChoices]

IMO
this is a dead horse
no amount of flogging will get it up and running
i didnt lose to much
but i feel the market wont trust this company anymore
badly managed and ticked off by the ASX
mmmmmm

I think you're right. I got in really late and actually did quite well out of the whole thing. It's a bit Déjà vu for me - similar to my BNB experience went it went down. Wild profits and wild losses.

I've still got 40,0000 shares with an option to purchase 3.5 for every one for $0.02

If I'm unable to trade/sell my options and holdings on commsec like others are doing, I think I'll just buy them and play it by ear. It's a good learning curve.