CLE - Cyclone Metals

No, you need to account for the options and restricted stock.

About 500m total shares fully diluted from memory.

So then a fair value will be 400M/500M = 80 cent?

A conservative 70 cent will be a good price then?

Currently, fuly diluted CFE are worth $210m. They have been offered $400m. This values CFE at 90 cents per share. The reason the sp hasnt gone to that level is in the recent history of CFE, the Ding deal fell over and people are wary.

There are positives since then in that they have,

1. Banked a $10m deposit of which $5m is non refundable in the event of CMG pulling the plug

2. CFE have dispelled doubts on the projects potential (Silica announcement)

3. They have increased the resource

4. CFE management are a tougher breed today after their learning curve at the hands of Ding and co

This removes most of the apparent reasons for the deal falling over imo.

All we need to eventuate now, as has already been said, is some cash to be put into CFE bank account and 90 cents per share will be the new level.

Use the recent bid for AGM as a baseline for this. AGM sat at $1 throughout the recent turmoil and is now at $1.10 based on the math of their offer. CFE will do the seem if all the ducks behave and stay in alignmemnt re the deal that is currently on the table.

Plenty of press out there confirming this i am sure.

http://www.theaustralian.news.com.au/story/0,25197,23281772-5005200,00.html

Chinese bid big money to hold Pilbara

Andrew Trounson | February 27, 2008

CHINA is ramping up its effort to secure Australian mining assets with state-backed conglomerate China Metallurgical Group set to buy all of mining junior Cape Lambert Iron Ore's namesake project in Western Australia's Pilbara for $400 million.

The price, if fully realised, would be a boon for Cape Lambert, which on a fully diluted basis is valued on market at $210 million.

But the iron ore-hungry Chinese have offered to pay a substantial premium for the low-grade project to avoid sparking a possible takeover fight that could potentially complicate foreign investment approval.

The proposed investment will provide an immediate test of the federal Government's new guidelines on approving foreign investment which require state-owned investors to demonstrate that they operate at arm's length from their government.

But the news failed to ignite Cape Lambert shares as investors remained wary of the deal, which remains subject to due diligence and investment approvals in both China and Australia.

Cape Lambert shares gained 1.5c to 49.5c, despite chairman Ian Burston estimating that the deal valued the company at around 90c a share.

But Cape Lambert shareholders have been disappointed before. The company has long been seeking a partner for the $1 billion project, and last October it was left at the altar when Chinese businessman Ding Liguo couldn't deliver on a $US192.5 million deal to take a 70 per cent stake in the project. That disappointment caused the share price to slump from almost to 70c to just 25c in January.

But since then, Cape Lambert has released test work showing that contaminating silica in the beneficiated magnetite iron ore can be reduced sufficiently to produce a saleable product.

It has also increased the current resource to 1.56 billion tonnes trading 31.2 per cent iron as it closes in on its target for a 2 billion tonne resource.

Cape Lambert is seeking to develop a 15 million tonne a year operation with a 20-year life. Production would be piped out to an offshore platform and barged to ships. However, China Metallurgical might seek access to its Cape Preston iron ore port development 80km away -- part of its partner Citic Pacific's Sino Iron Ore development.

Mr Burston believes the market scepticism will dissipate once the first cash payment from China Metallurgical comes in, although that is unlikely to be before June.

"Once the first money goes into the bank account, then there will be a rerating of the company and I would think that (valuation) gap would close and even disappear," Mr Burston told The Australian.

A shareholder vote on the deal is expected in May after necessary approvals, and if China Metallurgical commits it will pay $240 million on settlement and a further $80 million within 60 days. A final $80 million payment is contingent on it being granted a mining lease, and that could be a year off.

Found this on the Businessspectator.com.au

By Hsu Chuang Khoo of Reuters

LONDON -- Australian exploration firm Cape Lambert Iron Plc plans to invest about $170 million ($US158 million) in an African iron ore asset by June, chief executive Tony Sage told Reuters.

The London-listed firm also plans to return about $100 million to shareholders following the sale of its Western Australia-based Cape Lambert iron ore project to Chinese government construction firm China Metallurgical Group Corp, a sale that will raise $400 million.

"We've signed the confidentiality documents and done the due diligence on the Africa project," said Mr Sage, who was speaking by telephone from Australia.

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Any thoughts into this and if this will be a good thing for CFE.
just trying to make sense of why the sp has dropped after the more then expected good news.

My feeling on this is it,s the big boys holding it on a leash and picking up as much as they can.400 mill cash in a credit squeeze, give me a break they should be heading north

petervan said:

My feeling on this is it,s the big boys holding it on a leash and picking up as much as they can.400 mill cash in a credit squeeze, give me a break they should be heading north

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Does seem a bit strange the big rejection of higher prices.

If we hold above 0.39, and consolidate around the low 0.40's for a while it will have great potential. Can't go below 0.39 though.

By Hsu Chuang Khoo of Reuters

LONDON -- Australian exploration firm Cape Lambert Iron Plc plans to invest about $170 million ($US158 million) in an African iron ore asset by June, chief executive Tony Sage told Reuters.

The London-listed firm also plans to return about $100 million to shareholders following the sale of its Western Australia-based Cape Lambert iron ore project to Chinese government construction firm China Metallurgical Group Corp, a sale that will raise $400 million.


Are they talking a dividend here?

Volume slowly ticking up on CFE and a good close today. Sellers slowly dwindling and buyers increasing. if it wasn't for the failed Ding deal i think this would have already been rerated for the MCC sale.

The CFE Sp continues to remain firm despite market conditions. I have attached a link below which sheds some light on why MCC are prepared to pay almost double the current market cap for CFE.

CFE will increase in the weeks to come as we draw nearer to the

Link to todays press story - http://www.theaustralian.news.com.au/story/0,25197,23345892-5005200,00.html

Link to recent announcmeent which includes a summary and time line for the coming few months - http://capelam.com.au/aurora/assets/user_content/File/ASX0334_Presentation_070308.pdf

there is an article in herald sun that mention about potential takeover target for cfe. what is other ppl opinion regarding this news ?
holding up nicely when others are down.
now at 52c with buyers looks strong.
good luck all holders.

powerkoala said:

there is an article in herald sun that mention about potential takeover target for cfe. what is other ppl opinion regarding this news ?
holding up nicely when others are down.
now at 52c with buyers looks strong.
good luck all holders.

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I think it looks strong, seems like there has been accumulation going on in a weak market.Yesterday being especially strong i.m.o.

There was a big rejection of higher prices around 0.60, so see what happens when it starts heading towards there.

At work so can't post a chart, maybe later.

I hold.

This one moved up on Thursday against big drops in general market, always a good sign.

There is still some caution as previous deals have fallen over, and this one has to make it through some hoops yet. But the current SP undervalues the stock IF the deal goes through. I guess I am speculating that the deal will go through and the full value will be reflected in the SP within a few months.

Disclosure - I hold CFE.

Things are looking good in the SP department! 60 cents was a nice peak yesterday.
What are your thoughts on the immediate future for the SP and company generally......anyone?

Well im unsure of what announcements are coming up but i wouldn't be suprised to see a bit of a pull back in the share price simply due to the good consecutive rises over the last week.

Possibly back to 52c IF it does pull back.

60c has proven as support and resistance in the past so it will be good if we can get a solid close over 60c imo.

CFE will continue onwards and upwards circa 90 cents per share based on the $400 m buy offer of MCC alone. The only reason it isnt there already is the failed attempt to sell to Ding last year (imo).

There is plenty of information regarding timelines etc howver April 30 is the key date for me as that is the end of the due diligence period. Once that is signed off the rest should be plain sailing.

Take a look at the attached analysis for an outline of what is transpiring at the moment and you will see the reason for the sp increase. It shouldnt retrace without some news to precipitate things imo. Anything to do with the buy out failing will see the sp collapse otherwise it will maintain its steady upwards course.

If you are interested in holding longer you can speculate on what they purchase a stake in for their next play.

PS: The attached analysis is not an independent view and is putting CFE in the best possible light so DYOR.

Does anyone know how much tax they will have to pay? Also, does anyone work in FIRB and know whether MCC has applied?

If you are interested in holding longer you can speculate on what they purchase a stake in for their next play.

Click to expand...

Hmm well I paid 75c for CFE then bought on the way down, so I'll just be happy to start using stops once it gets up past this level

Slowly and painfully im learning this game is all about protecting Profits!

I got in at 65cents. I was tempted to sell this stock in Jan but luckily kept it.


Yeah I am starting to be become a fan of trailing stop losses. now if ADY, SDL and GBG can retain their previous highs . Worst part for me was entering the market during last bull run in Sep, OCT last year...

CFE sp has been sneeking up slowly on approx volume per day of around 2 million units.

On the strength of their market update buyers are at last ahead of the sellers (101 buyers for 2,108,317 units 82 sellers for 1,895,785 units) with the volume over 4 m today. Up until nopw it has been around 1.5m buyers to 2.5 m sellers.

Market update looked ok and certainly no bad news. Up another 5% on a slow day.