CLE - Cyclone Metals

[skint]

I think you are correct, as when the deal was first ann they said 4-6 weeks which is the early June, I'm telling myself July to allow for any delays and so I don't get impatient. Some of these companies are constantly 2-3weeks behind schedule releasing info.

Too true. Announcements on time appear to be the exception rather than the rule. Finished nicely today though, considering the ords was down by more than 1%.

 

[MR.]

I'm sorry to say this, but your replies have not cleared up the air for me. Referring back to the report of 14/08/2006, here is what it says:
Is this not an independent view? I still don't understand the issue of the 300Mt required as Indicated Resource when in their report they already have a JORC resource qualified at over this amount by an independent geo. Can someone please explain this to me.

MAHMOODF, I have got some extra information which I based my opinion on. Referr (LONSEC report dated september 2006). On CFE's website.
Apart from slight differences in iron grading how does Robe estimate 255 million tonnes and CFE (using those same drill samples) come up with 1.2 billion?????? I am confident that Robe used an independent geological consultant as well! When I find 2 doctors telling me something completly different I want to know what that 3rd says!

Nomore4's & Skint.
For CFE's updated resource model estimated end of july (nothing to do with contract. Just update from drilling) as you know. The contract 300MT estimate is 1st week of june but by contract must not be longer then the end of June. Ding has 4 weeks from compliance with regard to the 300 million tonne to pay his first large installment payment.
I hope to see Ding's options turned into shares sooner than that installment payment.
I hope this info helps.

 

[billhill]

Going off the current topic at the moment guys, but if the deal with best decade goes smoothly then CFE will end up with 250 million in cash. So obviously some of this money will go to development of cape lambert but that will still leave them with substatial reserves. Anyone else think this company may be in a good position to aquire another project. Where do people think this company is headed.

 

[nomore4s]

Thanks MR. cleared a few things up. I too would like to see Dings oppies converted asap. Well not long to wait now anyway only a few more weeks hopefully. Today was quite a good day (up 5.5%) considering the general market being down by around 70pts.

Billhill, I'm sure the company will be looking at new projects (as stated in one of thier ann - see below) with the left over cash from the deal if and when it goes ahead. What those projects will be, your guess is as good as mine.

“The company will retain a significant equity holding in the asset and now have significant cash reserves that will allow us to evaluate and possibly acquire other projects. We are in the unique position of having sufficient cash reserves that will allow us to run the ruler over a number of
seriously exciting projects.”

 

[mahmoodf]

Hi MR

If you look at the ASX release dated 24/08/2005 (titled "Cape Lambert Iron Ore Project") when CFE was trading as IGL, that is when the independent analysis was done by CFE and that is why they purchased the project. Because they were able to get a substantial increase on the resource size.

But you make a very good point about how Robe came up with one set of figures and Mackay and Shnellmann (the consultants that CFE used) came up with another set of figures from basically the same data set.

I now understand why Mr. Ding wants another opinion. I would too if I was shelling out $250 million smackeroonies!

So thank you very much for pointing me in the right direction. I feel confident though that CFE have the goods. Ian Burston is no fool and if he is on board this, then I have faith.

 

[Ruprect]

Going off the current topic at the moment guys, but if the deal with best decade goes smoothly then CFE will end up with 250 million in cash. So obviously some of this money will go to development of cape lambert but that will still leave them with substatial reserves. Anyone else think this company may be in a good position to aquire another project. Where do people think this company is headed.

I might suggest something from left field. CFE could reasonably make a special payment to shareholders. For instance, the 192 US is equiv to about 235 million Australian. A special payment of say .40 cents per share would cost about 200 million aussie, assuming all option holders exercised their right, and of course they would to be eligble for a payment.

That would leave CFE with $35 million from the Ding payment for the iron ore project, plus about $70 something million from exercised options, = over $100 million.

So thats over $100 million to pay for their 30% share of the development of the project, and the remainder to invest in other projects, while still retaining a 30% interest in the project, which will bring in ongoing revenue for the next decade or more.

I guess though that is dependent on how much a 30% share of the development costs.

A return to shareholders is after all what is supposed to occur when companies make money. Just my thoughts.

 

[Broadside]

I might suggest something from left field. CFE could reasonably make a special payment to shareholders. For instance, the 192 US is equiv to about 235 million Australian. A special payment of say .40 cents per share would cost about 200 million aussie, assuming all option holders exercised their right, and of course they would to be eligble for a payment.

That would leave CFE with $35 million from the Ding payment for the iron ore project, plus about $70 something million from exercised options, = over $100 million.

So thats over $100 million to pay for their 30% share of the development of the project, and the remainder to invest in other projects, while still retaining a 30% interest in the project, which will bring in ongoing revenue for the next decade or more.

I guess though that is dependent on how much a 30% share of the development costs.

A return to shareholders is after all what is supposed to occur when companies make money. Just my thoughts.

Nice idea Ruprect but companies rarely elect to make themselves smaller, even if it is to the benefit of shareholders. Much like governments of any persuasion. It must be human nature.

 

[Ruprect]

Lol, i know! Its very wishful thinking. But the directors do hold a significant number of shares themselves..good way to take an easy profit...

If they make strategic investments however, the benefit will come in a share price move and potential dividends as a producer. They will be one of the limited number of explorers making the move to being a producer, albeit as part of a JV. That gives them good cred, so any further ventures should be keenly watched and supported.

 

[skint]

Closed higher at .52c in London overnight. It would be good to see that reflected in the Aust. SP today.

 

[MR.]

I agree with the figures you have put forward there not far different to what I calculate. Although the mine total was suppose to cost 600 million and perhaps as much as 800 million total. 30% of that (CFE share) is 180 and 240 million. I have thought they might pay a dividend if the mine did cost 180 million. I have also read somewhere that Sage has suggested a dividend maybe paid.

The main reason why I like CFE is because they are now and will be in no debt. So many other companies are in debt. I still see CFE at ground floor and we have calculated fully diluted $0.677 per share in cash (at 250 million AUD Ding) + we will have a 30% mine, Iron ore being in demand and management in place to bring it all together. As for the 300mt I don't see that as the main hurdle it is the payment. Ding can walk away at anytime and lose only 2 million. I know by contract he is suppose to pay.

 

[mahmoodf]

Hi MR

Can he walk away even if Cape prove they have 300Mt? Is it not a binding agreement? I thought the only way out would be if Cape cannot prove 300Mt indicated resource.

 

[MR.]

Hi MR

Can he walk away even if Cape prove they have 300Mt? Is it not a binding agreement? I thought the only way out would be if Cape cannot prove 300Mt indicated resource.

Ding can walk away if the 300mt is not proved and he loses $750,000.
If it is proven then that bindings agreement you mentioned states he has to pay. Show me the money.

 

[mahmoodf]

LOL, thanks MR. Those are exactly my thoughts. Lets hope that the JORC compliant resource that Cape have been claiming since about 2005 of 2.5Bt is certainly that. I hope the geo that did the work didn't make a typo some where!!! ;-)

 

[camaybay]

I have been following the dialogue and thought that the chart looked like cup and handle pattern. Good if the verification is confirmed. No typos please!
Not holding.
DYOR

 

[chris1983]

Yeah Im waiting for the confirmation of the deal with Mr Ding. The first week of June is drawing near. Im excited. Good luck to holders..hopefully we dont get any delays.

 

[chris1983]

From the last quarterly report..see below

"CFE is pleased to advise it has commenced initial compliance with regard to the 300 million tonne indicated resource by the appointment of RSG Global as the independent geologists. CFE anticipates completion of verification by the 1 week of June 2007."

Time is running out..tick tick tick..moment of truth is upon us. Hopefully we get the message next week and there are no delays.

 

[MR.]

Cup and handle! I just see iron ore fil'ings. Happy to hold even if slight typo because 300mt is only 17% more than Robes 255mt. Cfe has found alot more iron ore since they began drilling. I would be concerned if CFE had to come up with something like 600mt for the contract.

Tick tick and another day goes by.

 

[Ruprect]

Price Sensitive ann just out. CFE to create new subsidiary - Global Iron. Not the news we have been waiting for, but this does indicate a spin off...

Will transfer Iron ore projects to this company, excluding cape lambert project. If this doesnt cause a positive stir for the sp, i'll probably eat my shorts. Not that id need them in this weather...

"Cape Lambert intends to spin this company out into a new ASX listed entity and distribute its
shareholding in Global to the CFE shareholders. It is expected that following the proposed
spin-out, Cape Lambert shareholders will hold approximately 20 per cent of Global by way of
an in-specie distribution by Cape Lambert of the shares it holds in Global. The in-specie
distribution is subject to shareholder approval, Global completing a capital raising of
$2,500,000 and receiving conditional approval to list on ASX."

I also note from the release that CFE are proposing a success fee of $10m (shares) to Westlink for arranging the Ding 70% aquisition and that "Details regarding the sale of the 70% interest in the Cape Lambert Iron Ore Project and the
success fee payable to Westlink will be contained in the notice of meeting to be sent to
shareholders shortly."

 

[MR.]

Ding can walk away if the 300mt is not proved and he loses $750,000.
If it is proven then that bindings agreement you mentioned states he has to pay. Show me the money.

Thanks ruprect.

Re: "show me the money" as i posted earlier referring to mr. Ding's 192us million. I have some news ***not known to most.*** What do you know about a share that no one else does?

I don't think Ding is going to buy the mine.
I don't think Best Decade is going to buy the mine either....
I think and judge for yourselves, the buyer will be Delong Holdings the actual steel manufacturer.

Delong Holdings has issued bonds taken up by Citigroup in two parcels of 175 and 50 million usd. Totalling $200,000 usd. Closing date if 8/6/07 or friday next week. Too close not to be linked!

I have found the money. Now will Delong use it for the mine? I bet they do.

This puts the money worry to rest for me.

information for your judgement. see may 22 and may 26 ann'

http://info.sgx.com/webcorannc.nsf/...w&RestrictToCategory=DDELONG HOLDINGS LIMITED

A question if Delong is expected to make 3 million tonnes of steel next year how much would the iron ore cost? At 3 million tonnes of iron ore (which I am sure is light on) if purchased for $40-usd (which I think is light on as well) Delong will spend $120 million on ore next year minimum.

Regards a happy holder. MR. Sherlock Holmes

Now "Show me 300 mt."

 

[MR.]

Midday (cfe $0.50 no change) (cfeo 25.5 +4.1%)

"There are times when great investment opportunities are as plain as they appear.
We tend to except complexity, so we find it hard to accept that the market sometimes throws up extraordinary bargains." (platinum asset management)