AZR - Aztec Resources
- Thread starter RichKid
- Start date
-
- Tags
- azr aztec resources
AZR is back in trading today after the announcement of a $A100 million debt finance facility approval to fund the Koolan Island project. The share price did not move!! I don't get it!!
Can some of the more experienced traders (basically everybody) shed some light on this please?
I did ask before and I was told it's because people are stupid! I'm hoping for a better explanation..
Can some of the more experienced traders (basically everybody) shed some light on this please?
I did ask before and I was told it's because people are stupid! I'm hoping for a better explanation..
I don't believe the price will move much until the situation with MGX is resolved. The price will stay around 33% of MGX price. Hopefully the takeover will not eventuate, production will start and then we will see a price increase. (Maybe then Aztec will take over MGX on better terms than those offered at present.)new girl said:
Yes, I agree about the price movement for the time being. However, further exploration on Koolan Island is still continuing so there can be more good news. In terms of the takeover from MGX, I don't think it will happen unless MGX offers something better than the current offer. It was reported on the West Australian before (about a few weeks ago) that Aztec might be in production in a few days which is well ahead of the schedule. Once they draw the money out, who knows? Maybe the production will start sooner than every one expect. So far, Aztec board has delivered all their promises. I am continuing to hold my AZR shares and have no intention to take the offer from MGX. I like your comment about Aztec takes over MGX.nioka said:
Anything is possible.chansw said:Yes, I agree about the price movement for the time being. However, further exploration on Koolan Island is still continuing so there can be more good news. In terms of the takeover from MGX, I don't think it will happen unless MGX offers something better than the current offer. It was reported on the West Australian before (about a few weeks ago) that Aztec might be in production in a few days which is well ahead of the schedule. Once they draw the money out, who knows? Maybe the production will start sooner than every one expect. So far, Aztec board has delivered all their promises. I am continuing to hold my AZR shares and have no intention to take the offer from MGX. I like your comment about Aztec takes over MGX.
well I think AZR has fat chance of staying independent, they screwed up this royalty issue by design or incompetence and despite that MGX is going ahead, they will get a lot of acceptances now from annoyed AZR retail and institutional shareholders. Game over.
if it is by design then AZR allowed itself to get screwed over by ARC purely to frustrate MGX, at the expense of its shareholders...if the MGX bid wasn't there AZR would be sub 20 cents right now...AZR shareholders should count themselves lucky MGX is still there in my view
*************************************************
Aztec Resources' silence about the caveats is worth close scrutiny
COMMENT
Bryan Frith
October 26, 2006
IT turns out that Aztec Resources knew caveats had been placed over its mining tenements, which threatened the company's ability to raise bank financing for its Koolan Island iron ore project and jeopardised its solvency, several weeks before that information was disclosed to the ASX.
That poses the question as to whether it was in compliance with its statutory obligation to comply with ASX's continuous disclosure requirements. A company is required to immediately notify the ASX of any information it has that a reasonable person would expect to have a material effect on the price or value of the company's securities.
Disclosure is not required if a reasonable person wouldn't expect the information to be disclosed, the information is confidential and one or more of five carve-outs apply - that it would be a breach of law to disclose the information; it concerns an incomplete proposal or negotiation; it is insufficiently definite to warrant disclosure; is generated for internal management purposes; or is a trade secret.
The caveats were lodged by Australian Royalties Corp (ARC), which contributed 30 per cent of the mining tenements in return for a royalty and an option to take the tenements back for a peppercorn payment of $1 if Aztec hasn't commenced mining and shipping of a minimum of 500,000 tonnes of iron ore by June 15, 2007.
The caveats were first lodged on September 11 at the WA Department of Industry & Resources but were rejected because they contained a NSW address rather than a WA address. They were re-lodged and accepted on September 19, and on September 29 the department wrote to Aztec informing it of the caveats.
Aztec started negotiations with ARC to have the caveats removed, and may argue that they were incomplete and therefore disclosure was not required earlier. But the negotiations began after the caveats were lodged, and it's arguable that the fact of the caveats being lodged was material price-sensitive information that should have been disclosed as soon as Aztec learned of it, in order to ensure an informed market.
Aztec's unwelcome bidder, Mt Gibson Iron, wrote to Aztec on October 6 raising a number of issues in the annual report, including a directors' qualification that if bank facilities weren't obtained by the end of October, there was significant uncertainty that Aztec could continue as a going concern. Aztec dismissed Mt Gibson's concerns as "grasping at straws" and expressed confidence that the financing would be signed shortly.
Aztec appears to be in this position because it has committed funds to the development of the project before it has the necessary bank finance in place. Last Thursday Aztec suddenly said "an issue" had arisen in relation to the agreement with ARC because the banks wouldn't finalise the facilities unless the caveats were removed. Aztec flagged the need to issue shares to ARC but warned that if its negotiations weren't successful, there was a risk the company would be insolvent.
Aztec's announcement followed a meeting with Mt Gibson to discuss the issue raised by the bidder. At that meeting Aztec revealed the problem in relation to ARC and sought a waiver from Mt Gibson to enable it to issue shares to ARC.
The ASX listing rules prohibit a target company from issuing shares without shareholder approval within three months of the company being told that a person proposes to make a bid. As Aztec was still within that period it sought a waiver from the ASX, but the ASX wouldn't do so unless Mt Gibson would agree.
Mt Gibson was crucial to any shareholder approval, as it held a relevant interest in 33 per cent of Aztec. If Mt Gibson was in favour, it would be approved; if not, it would be rejected. The ASX may have felt that given Aztec's parlous position and the urgency of the issue it would suffice to have Mt Gibson effectively rule on the matter. Mt Gibson was over a barrel. If it refused a waiver there was a real risk that Aztec would collapse and be placed in administration. That wouldn't be in Aztec's interest, or in the interests of Aztec holders as a whole.
Aztec issued 77.777 million shares, or 7 per cent of the capital, at 22.5c a share, valuing the deal at $17.5 million. Mt Gibson was told that was the deal and that the issue price was the VWAP for the previous 20 days' trading. Of course, the Aztec share price was supported and underpinned by the Mt Gibson bid. In May, Aztec issued shares to ARC in relation to the royalty which were at only 19c a share.
Mt Gibson had in mind renegotiating the royalty deal if its bid succeeded, but considered that around $10 million was a fair price - and that ARC has managed to extract a generous price because of Aztec's parlous position.
Mt Gibson told Aztec it would prefer ARC to be paid cash, which could be funded out of the bank facilities allocation for contingencies, but Aztec chose to issue shares. ARC has given conflicting messages as to whether or not it is likely to accept but if it doesn't, it could end up as a blocking stake.
*************************************************
Aztec Resources' silence about the caveats is worth close scrutiny
COMMENT
Bryan Frith
October 26, 2006
IT turns out that Aztec Resources knew caveats had been placed over its mining tenements, which threatened the company's ability to raise bank financing for its Koolan Island iron ore project and jeopardised its solvency, several weeks before that information was disclosed to the ASX.
That poses the question as to whether it was in compliance with its statutory obligation to comply with ASX's continuous disclosure requirements. A company is required to immediately notify the ASX of any information it has that a reasonable person would expect to have a material effect on the price or value of the company's securities.
Disclosure is not required if a reasonable person wouldn't expect the information to be disclosed, the information is confidential and one or more of five carve-outs apply - that it would be a breach of law to disclose the information; it concerns an incomplete proposal or negotiation; it is insufficiently definite to warrant disclosure; is generated for internal management purposes; or is a trade secret.
The caveats were lodged by Australian Royalties Corp (ARC), which contributed 30 per cent of the mining tenements in return for a royalty and an option to take the tenements back for a peppercorn payment of $1 if Aztec hasn't commenced mining and shipping of a minimum of 500,000 tonnes of iron ore by June 15, 2007.
The caveats were first lodged on September 11 at the WA Department of Industry & Resources but were rejected because they contained a NSW address rather than a WA address. They were re-lodged and accepted on September 19, and on September 29 the department wrote to Aztec informing it of the caveats.
Aztec started negotiations with ARC to have the caveats removed, and may argue that they were incomplete and therefore disclosure was not required earlier. But the negotiations began after the caveats were lodged, and it's arguable that the fact of the caveats being lodged was material price-sensitive information that should have been disclosed as soon as Aztec learned of it, in order to ensure an informed market.
Aztec's unwelcome bidder, Mt Gibson Iron, wrote to Aztec on October 6 raising a number of issues in the annual report, including a directors' qualification that if bank facilities weren't obtained by the end of October, there was significant uncertainty that Aztec could continue as a going concern. Aztec dismissed Mt Gibson's concerns as "grasping at straws" and expressed confidence that the financing would be signed shortly.
Aztec appears to be in this position because it has committed funds to the development of the project before it has the necessary bank finance in place. Last Thursday Aztec suddenly said "an issue" had arisen in relation to the agreement with ARC because the banks wouldn't finalise the facilities unless the caveats were removed. Aztec flagged the need to issue shares to ARC but warned that if its negotiations weren't successful, there was a risk the company would be insolvent.
Aztec's announcement followed a meeting with Mt Gibson to discuss the issue raised by the bidder. At that meeting Aztec revealed the problem in relation to ARC and sought a waiver from Mt Gibson to enable it to issue shares to ARC.
The ASX listing rules prohibit a target company from issuing shares without shareholder approval within three months of the company being told that a person proposes to make a bid. As Aztec was still within that period it sought a waiver from the ASX, but the ASX wouldn't do so unless Mt Gibson would agree.
Mt Gibson was crucial to any shareholder approval, as it held a relevant interest in 33 per cent of Aztec. If Mt Gibson was in favour, it would be approved; if not, it would be rejected. The ASX may have felt that given Aztec's parlous position and the urgency of the issue it would suffice to have Mt Gibson effectively rule on the matter. Mt Gibson was over a barrel. If it refused a waiver there was a real risk that Aztec would collapse and be placed in administration. That wouldn't be in Aztec's interest, or in the interests of Aztec holders as a whole.
Aztec issued 77.777 million shares, or 7 per cent of the capital, at 22.5c a share, valuing the deal at $17.5 million. Mt Gibson was told that was the deal and that the issue price was the VWAP for the previous 20 days' trading. Of course, the Aztec share price was supported and underpinned by the Mt Gibson bid. In May, Aztec issued shares to ARC in relation to the royalty which were at only 19c a share.
Mt Gibson had in mind renegotiating the royalty deal if its bid succeeded, but considered that around $10 million was a fair price - and that ARC has managed to extract a generous price because of Aztec's parlous position.
Mt Gibson told Aztec it would prefer ARC to be paid cash, which could be funded out of the bank facilities allocation for contingencies, but Aztec chose to issue shares. ARC has given conflicting messages as to whether or not it is likely to accept but if it doesn't, it could end up as a blocking stake.
I agree AZR is a better business than MGX. Look at today's huge volume with the closing price at $0.24 where MGX only closed at $0.705. AZR is more than 33% of MGX share price.nioka said:
I tend to disagree. So far as at 26 Oct, MGX had received acceptances for only 1.68% of Aztec shares excluding those from Cambrian Mining. I know some people who have shares in both AZR and MGX and prefer them to be independent on their own. The issue is the majority of AZR shareholders do not think the offer is good enough. If MGX offers a lot of money, I am sure most of us have sold the shares even the board says 'No'. Looking at the chart of MGX, it looks like a dead cross and the share price might fall below $0.70 again.Broadside said:
I read that another analyst has now moved his iron ore benchmark price forecast to +10% for the next Japanese financial year based on supplu shortages.
Next years price predictions are following the exact same route as last year, early estimates of 10-20% cuts, then price rollovers, now 10% price increases. Hopefully a little more come 1 April 2007
Hang in there AZR.
Next years price predictions are following the exact same route as last year, early estimates of 10-20% cuts, then price rollovers, now 10% price increases. Hopefully a little more come 1 April 2007
Hang in there AZR.
chansw said:
it appears the buying of AZR was by a party sympathetic to MGX, and was switching out of MGX around 85c and back into MGX at 72c (via AZR at 24c)
http://www.theaustralian.news.com.au/story/0,20867,20680335-16941,00.html
This takeover has been an unholy mess. MGX pitched an all script bid which was only ever going to put on a cap on their share price, especially with their own production now a key value driver in the transaction. And the AZR directors have never bothered telling its shareholders what they think is a fair valuation for AZR.
nioka said:
Just had a look at MGX's P/E ratio, pretty low for this sector. still a lot of growth possible...but yes ...i agree with that AZR will have more potential...since with koolan island coming into production soon....but AZR has quite a lot of debt...with an increase in interest rate...will this affect the SP ?
cheers
The takeover sage is set to run for a while with the Chinese getting involved in both Aztec and Mt Gibson! story from Minesite.com
Chinese Enter The Battle Between Aztec Resources And Mt Gibson Iron.
By Our Man In Oz
Chinese takeaway has a whole new meaning in Australia’s iron ore industry. Not only is it the customer, not the cook, who is the Chinese player in the Australian game, but the purchase order from Shanghai is for the entire shop, not just a serving of noodles. And, if you think that’s complicated wait until you get to the details of what’s afoot in Oz where there’s full-blooded mayhem among the small fry of the iron ore patch, and trying to figure out who’s buying what is almost down to guesswork. In a way, this description is a cop out, but only just. The truth about the small iron ore stocks, especially Aztec Resources and Mt Gibson Iron, is that none of the locals really knows who owns what, when the game will end, or who’s on top.
This complicated muddle is best illustrated by the Aztec situation. Four months ago this company, which is re-developing the old BHP Billiton iron ore mine on Koolan Island, received an uninvited three-for-one share swap takeover from a local rival, Mt Gibson Iron. The plan, according to Mt Gibson, was to create a mid-tier player out of two smaller miners. London-based Cambrian Mining said it quite liked the idea and accepted the Mt Gibson offer for the 30 per cent it owned in Aztec, and earlier today lodged a notice saying at now owned 19.93 per cent of Mt Gibson. Other investors have been slow to follow Cambrian out of Aztec though a steady trickle has lifted Mt Gibson to almost 40 per cent of its target.
In normal circumstance a 40 per cent stake should constitute effective control, and perhaps it will. Aztec, despite making good progress with its Koolan Island project, has fouled its own nest somewhat by botching a royalty deal on the island and forced to cough up an issue of 78 million shares to buy out a strange mob from Sydney called Australian Royalties Corporation, about which nobody knows anything. ARC might even have stayed in the background, except it whacked a caveat on the Koolan Island project and demanded prompt settlement, giving Mt Gibson the ammunition to claim all Aztec shareholders had been misled.
If your head hurts at this point of the saga it might be best to walk away now because it just gets worse thanks to the intervention of even more mystery people – the chaps from China. In the latest twist, a Chinese company called Shanghai Merchants has snapped up a 10.6 per cent stake in Mt Gibson, and a 6.6 per cent stake in Aztec. Shanghai Merchants, with a foot in both camps, is backed by one of China’s biggest steel mills Shougang. It bought the Aztec shares on market, and the stake in Mt Gibson from an even more famous billionaire Chinaman, Lee Ming Tee, a prominent player in the Australian corporate world in the 1980s when he had a number of joint ventures with Malcolm Burne, chairman of AIM listed Golden Prospect.
But, before we get to hear from any of the major players in this little spat it is worth noting that Aztec and Mt Gibson are not alone in the great China iron ore takeaway. Other developments include Midwest Corporation, which started shipping iron ore this year and has been cementing its relationship with China’s biggest steel mill, Sinosteel, plus its friends China Railway Engineering and China Communications. Cape Lambert Iron, a company chaired by Ian Burston, who also chairs Aztec, is said to be in talks with Xingxing Iron Pipes over its Pilbara magnetite project -- and not to be outdone in the stampede for raw materials, Korea’s Posco and Japan’s Mitsubishi are working with Murchison Metals on its Jack Hills iron ore project.
Meanwhile, back at the hottest bid on the table, Aztec v Mt Gibson, a fifth extension has been claimed by the bidder with the offer now due to close on Friday. Mt Gibson said it was confident of victory, citing the royalty mess as a reason to make the switch. Aztec, in turn, claims to have the backing of its new shareholder, Shanghai Merchants. But, when Minesite caught up with Aztec chief executive, Peter Bilbe, he quickly confessed to not knowing precisely who was on what side, or would vote which way. “You wouldn’t exactly say Mt Gibson been overwhelmed with acceptances,” Bilbe said after noting that 30 per cent of its 40 per cent came from Cambrian. But, having made that point, Bilbe acknowledges that 40 per cent is a big stake and talks at some stage, or a Mt Gibson victory subject to Chinese approval, look inevitable.
“No, we’re not talking at the moment,” Bilbe said. “We have in the past had some informal discussions, and from that point of view my door is certainly open. I’m certainly amenable to discussions with them, doing that is obviously in the interests of shareholders.” Minesite listened attentively, but then plays the China card with a question. “Aren’t the Chinese in a position to pull both companies, Aztec and Mt Gibson, together?” “Look, I don’t know how that’s going to unfold,” Bilbe said. “That would be speculation and I’ll leave that to you. But, you’re quite right, Shanghai’s got about 7 per cent per cent of Aztec and 10 per cent of Mt Gibson. They’re a significant shareholder and we’ve only had preliminary discussions.”
“But,” asks Minesite, “who are they?” “Well, look, I don’t know much about them. They’re listed on the Hong Kong Stock Exchange and we’ll be finding out more shortly. They’ve indicated publicly that they support the Aztec management team, and support what we’re doing at Koolan Island. What that means at the end of the day we’ll just have to wait and see.”
Perhaps, but only perhaps, the sharp little war of words between Aztec and Mt Gibson will come to a head on Friday, though a sixth takeover bid extension is not out of the question, and Mt Gibson’s declaration that its offer has gone unconditional means it is accepting what it’s got. Logic says the Chinese steel mills are keen to see a bigger business emerge by bringing the two small Australian miners together, and Cambrian certainly seems to be in favour of that. The problems, however, are overcoming somewhat bruised Aussie egos, figuring out which Chinaman is in which other Chinaman’s pocket, and being alert to the a second possible move by the mercurial Lee Ming Tee who loves a good takeover brawl.
And after all that, it might be time to hear more from Cape Lambert and the Xingxing Iron Pipe Company – ad certainly from Ian Burston who’s due in London in a few days and might explain what it’s like to be experiencing that great Chinese curse of “living in interesting times”.
Chinese Enter The Battle Between Aztec Resources And Mt Gibson Iron.
By Our Man In Oz
Chinese takeaway has a whole new meaning in Australia’s iron ore industry. Not only is it the customer, not the cook, who is the Chinese player in the Australian game, but the purchase order from Shanghai is for the entire shop, not just a serving of noodles. And, if you think that’s complicated wait until you get to the details of what’s afoot in Oz where there’s full-blooded mayhem among the small fry of the iron ore patch, and trying to figure out who’s buying what is almost down to guesswork. In a way, this description is a cop out, but only just. The truth about the small iron ore stocks, especially Aztec Resources and Mt Gibson Iron, is that none of the locals really knows who owns what, when the game will end, or who’s on top.
This complicated muddle is best illustrated by the Aztec situation. Four months ago this company, which is re-developing the old BHP Billiton iron ore mine on Koolan Island, received an uninvited three-for-one share swap takeover from a local rival, Mt Gibson Iron. The plan, according to Mt Gibson, was to create a mid-tier player out of two smaller miners. London-based Cambrian Mining said it quite liked the idea and accepted the Mt Gibson offer for the 30 per cent it owned in Aztec, and earlier today lodged a notice saying at now owned 19.93 per cent of Mt Gibson. Other investors have been slow to follow Cambrian out of Aztec though a steady trickle has lifted Mt Gibson to almost 40 per cent of its target.
In normal circumstance a 40 per cent stake should constitute effective control, and perhaps it will. Aztec, despite making good progress with its Koolan Island project, has fouled its own nest somewhat by botching a royalty deal on the island and forced to cough up an issue of 78 million shares to buy out a strange mob from Sydney called Australian Royalties Corporation, about which nobody knows anything. ARC might even have stayed in the background, except it whacked a caveat on the Koolan Island project and demanded prompt settlement, giving Mt Gibson the ammunition to claim all Aztec shareholders had been misled.
If your head hurts at this point of the saga it might be best to walk away now because it just gets worse thanks to the intervention of even more mystery people – the chaps from China. In the latest twist, a Chinese company called Shanghai Merchants has snapped up a 10.6 per cent stake in Mt Gibson, and a 6.6 per cent stake in Aztec. Shanghai Merchants, with a foot in both camps, is backed by one of China’s biggest steel mills Shougang. It bought the Aztec shares on market, and the stake in Mt Gibson from an even more famous billionaire Chinaman, Lee Ming Tee, a prominent player in the Australian corporate world in the 1980s when he had a number of joint ventures with Malcolm Burne, chairman of AIM listed Golden Prospect.
But, before we get to hear from any of the major players in this little spat it is worth noting that Aztec and Mt Gibson are not alone in the great China iron ore takeaway. Other developments include Midwest Corporation, which started shipping iron ore this year and has been cementing its relationship with China’s biggest steel mill, Sinosteel, plus its friends China Railway Engineering and China Communications. Cape Lambert Iron, a company chaired by Ian Burston, who also chairs Aztec, is said to be in talks with Xingxing Iron Pipes over its Pilbara magnetite project -- and not to be outdone in the stampede for raw materials, Korea’s Posco and Japan’s Mitsubishi are working with Murchison Metals on its Jack Hills iron ore project.
Meanwhile, back at the hottest bid on the table, Aztec v Mt Gibson, a fifth extension has been claimed by the bidder with the offer now due to close on Friday. Mt Gibson said it was confident of victory, citing the royalty mess as a reason to make the switch. Aztec, in turn, claims to have the backing of its new shareholder, Shanghai Merchants. But, when Minesite caught up with Aztec chief executive, Peter Bilbe, he quickly confessed to not knowing precisely who was on what side, or would vote which way. “You wouldn’t exactly say Mt Gibson been overwhelmed with acceptances,” Bilbe said after noting that 30 per cent of its 40 per cent came from Cambrian. But, having made that point, Bilbe acknowledges that 40 per cent is a big stake and talks at some stage, or a Mt Gibson victory subject to Chinese approval, look inevitable.
“No, we’re not talking at the moment,” Bilbe said. “We have in the past had some informal discussions, and from that point of view my door is certainly open. I’m certainly amenable to discussions with them, doing that is obviously in the interests of shareholders.” Minesite listened attentively, but then plays the China card with a question. “Aren’t the Chinese in a position to pull both companies, Aztec and Mt Gibson, together?” “Look, I don’t know how that’s going to unfold,” Bilbe said. “That would be speculation and I’ll leave that to you. But, you’re quite right, Shanghai’s got about 7 per cent per cent of Aztec and 10 per cent of Mt Gibson. They’re a significant shareholder and we’ve only had preliminary discussions.”
“But,” asks Minesite, “who are they?” “Well, look, I don’t know much about them. They’re listed on the Hong Kong Stock Exchange and we’ll be finding out more shortly. They’ve indicated publicly that they support the Aztec management team, and support what we’re doing at Koolan Island. What that means at the end of the day we’ll just have to wait and see.”
Perhaps, but only perhaps, the sharp little war of words between Aztec and Mt Gibson will come to a head on Friday, though a sixth takeover bid extension is not out of the question, and Mt Gibson’s declaration that its offer has gone unconditional means it is accepting what it’s got. Logic says the Chinese steel mills are keen to see a bigger business emerge by bringing the two small Australian miners together, and Cambrian certainly seems to be in favour of that. The problems, however, are overcoming somewhat bruised Aussie egos, figuring out which Chinaman is in which other Chinaman’s pocket, and being alert to the a second possible move by the mercurial Lee Ming Tee who loves a good takeover brawl.
And after all that, it might be time to hear more from Cape Lambert and the Xingxing Iron Pipe Company – ad certainly from Ian Burston who’s due in London in a few days and might explain what it’s like to be experiencing that great Chinese curse of “living in interesting times”.
