CSM - Consolidated Minerals
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The fight has only started. What ConsMin management never realised was what was happening in China, I know first hand. Manganese and Chrome ore are rocketing, ConsMin management can't keep a lid on that.
www.asianmetals.com
[4-4] Ferrochrome prices rocket universally
[4-4] Chrome ore prices keep increasing in Turkey
[4-4] Chrome ore price overtops RMB65/dmtu in China
Chrome ore is fetching over RMB 65/dmtu. This equals US$8.40/dmtu or US $352.95 /ton for 42% chrome ore. Last year ConsMin received US$160/ton or AUD$199/ton. Cash costs are AUD$124/ton. Using the same cash costs, and the latest chrome ore prices from China, this could result in $40 million dollars profit for the next 6 months. Yes, ConsMin management will say that I've forgotten to add in seafreight and commissions, but we can deduct those from the equation and it will still leave a tidy profit. Of course if the management told us how much they paid in fees to Noble Group and freight, we wouldn't have to speculate. But lets say AUD$30 million.
www.asianmetals.com
[4-4] Ferrochrome prices rocket universally
[4-4] Chrome ore prices keep increasing in Turkey
[4-4] Chrome ore price overtops RMB65/dmtu in China
Chrome ore is fetching over RMB 65/dmtu. This equals US$8.40/dmtu or US $352.95 /ton for 42% chrome ore. Last year ConsMin received US$160/ton or AUD$199/ton. Cash costs are AUD$124/ton. Using the same cash costs, and the latest chrome ore prices from China, this could result in $40 million dollars profit for the next 6 months. Yes, ConsMin management will say that I've forgotten to add in seafreight and commissions, but we can deduct those from the equation and it will still leave a tidy profit. Of course if the management told us how much they paid in fees to Noble Group and freight, we wouldn't have to speculate. But lets say AUD$30 million.
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Rim
What do you think is a realistic valuation on CSM given their significant improving fortunes?
What do you think is a realistic valuation on CSM given their significant improving fortunes?
A fair and reasonable price for Consmin is $3 to $3.20. If they got their act together and increased their nickel production, then $4.
With the present management, who knows, they spend most of their time trying to sell a deal at a price no one will accept. They'd be better off trying to fast track nickel like MIncor.
With the present management, who knows, they spend most of their time trying to sell a deal at a price no one will accept. They'd be better off trying to fast track nickel like MIncor.
AT last ConsMin management has made a market update for the rising prices of chromite and manganese, but NOTE after the market has closed before a 4 day holiday. You know they do this deliberately, they worry that even a little bit of good news might excite the market and the share price will go even higher, thereby making their $2.28/share offer look even sicker than it already is.
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I thought that CSM were protected on exchange rate movements, to some extent, with a 3 year rolling hedge programme; Set at 75%, 60% and 50%.
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And they downplayed it as much as they possibly could. I can't believe these guys would not have long term shipping contracts in place, so a 50% rise seems a bit steep to me. The CEO of ADY went on the other month about he had locked in low freight prices for all of this year. Why can't CSM do the same? Not sharp enough? Or are they having a wink and a nod with the shipping company-pay more now and get a discount once Gilbertson owns the majority? Or is that too much of a conspiracy theory?
I'm guessing the maths shouldn't be too hard to work out (if enough info has been supplied), but the 8-10% net increase doesn't sound right to me. Again, they're frugal on the info they offer. Shonky b@$tard$.
I'm guessing the maths shouldn't be too hard to work out (if enough info has been supplied), but the 8-10% net increase doesn't sound right to me. Again, they're frugal on the info they offer. Shonky b@$tard$.
Did you note how they put out the announcement after the market closed before a 4 day holiday.
Yes the announcement is a load of waffle, I think that Baxter could teach the pollies a thing or two about gobbledygook, mumbo jumbo and drivel. I doubt whether he has given a straight answer in his life judging from that announcement.
They are desperately worried that any good news will push the share price higher, ending their deal.
Judging from the announcement it seems hard to believe that they are enjoying the good prices for manganese and chromite, they had better start to sharpen their pencils when they deal with the Chinese.
Maybe we should get ARH's Dr Clive Palmer to go in to bat for them.
Yes the announcement is a load of waffle, I think that Baxter could teach the pollies a thing or two about gobbledygook, mumbo jumbo and drivel. I doubt whether he has given a straight answer in his life judging from that announcement.
They are desperately worried that any good news will push the share price higher, ending their deal.
Judging from the announcement it seems hard to believe that they are enjoying the good prices for manganese and chromite, they had better start to sharpen their pencils when they deal with the Chinese.
Maybe we should get ARH's Dr Clive Palmer to go in to bat for them.
Trying to understand the Operations & Market Update, I have worked out the profit on maganese so far. Buried in the bull is good news, by my calculations using their figures will result in a profit of $38,713,600 on manganese for the full year.
Using the 920,000 ton manganese production, the costs of AUD$2.19/dmtu and the fact that we can expect a 10% increase on the last half average price received US$2.10/dmtu ( they say US$2.09, but it actually works out at US$2.098)
New price is US$2.31/dmtu
Total income AUD $135,424,000 costs $96,710,400
Profit $38,713,600 for the full year ( last half was $14.5 million, this half AUD $24,213,600 and that's using their poor figures.
Not looking too bad eh. Although I still think that their price quoted does not represent the present market in China. But they maybe selling manganese cheaper to other customers.
Using the 920,000 ton manganese production, the costs of AUD$2.19/dmtu and the fact that we can expect a 10% increase on the last half average price received US$2.10/dmtu ( they say US$2.09, but it actually works out at US$2.098)
New price is US$2.31/dmtu
Total income AUD $135,424,000 costs $96,710,400
Profit $38,713,600 for the full year ( last half was $14.5 million, this half AUD $24,213,600 and that's using their poor figures.
Not looking too bad eh. Although I still think that their price quoted does not represent the present market in China. But they maybe selling manganese cheaper to other customers.
Trying to understand the Operations & Market Update, ie the mumbo jumbo on Chromite, try as hard as I can I have decided it is impossible to believe their figures. ConsMin managements price of US$148/ton FOB, is correct for the last 1/2 year. But a 6% increase over the full year would mean a 12% increase going forward. Rubbish, they are not living on the same planet or its a typo error. ( or they are giving it away, in which case we need to know WHY?)
Chrome ore is presently fetching US$350/ton for 42%.
www.asianmetal.com
[4-4] Chrome ore price overtops RMB65/dmtu in China
chrome ore is fetching over RMB 65/dmtu. This equals US$8.40/dmtu or US $352.95 /ton for 42% chrome ore.
And it just didn't happen on the 4-4-07, its been high for weeks.
This is from www.asianmetal.com a few weeks ago. ie: 6th Feb 07
"Chinese consumers receive much higher offers of Cr ore 2007-2-6 12:59:57 BEIJING (Asian Metal) 6 Feb 07 – Chinese consumers reported to Asian Metal that lately they received much higher offer prices from international suppliers, even with some overtopping USD320/t CIF China. A Gansu-based consumer reported that they bought 900t of Pakistani lumpy Cr ore 40% mid last week at RMB56.5/dmtu (USD6.43/dmtu) ex port Tianjin. “ The trading company offered RMB57.5/dmtu (USD6.54/dmtu) ex ports when we called again after two days last week, additionally, I heard that some deals were made as high as RMB64/dmtu ex ports, which is unbelievable to me, ” added the source. a Liaoning-based consumers complained that a supplier even offered as high as USD328/t CIF China for lumpy Cr ore 40%min, origin from Pakistan. “ My Turkish suppliers informed us that they have few cargos available until April, ” remarked the source. A trader based in Tianjin was also informed by her Turkish suppliers that there are limited materials for prompt shipment. She revealed that a reliable supplier offered USD235/t CIF China for metallurgical grade lumpy Cr ore 42% twenty days ago, but she did not accept that offer in view of increasing adventures in the business. “ I will come back to the market after the Spring Festival holidays, ” said the source.
Chrome ore is presently fetching US$350/ton for 42%.
www.asianmetal.com
[4-4] Chrome ore price overtops RMB65/dmtu in China
chrome ore is fetching over RMB 65/dmtu. This equals US$8.40/dmtu or US $352.95 /ton for 42% chrome ore.
And it just didn't happen on the 4-4-07, its been high for weeks.
This is from www.asianmetal.com a few weeks ago. ie: 6th Feb 07
"Chinese consumers receive much higher offers of Cr ore 2007-2-6 12:59:57 BEIJING (Asian Metal) 6 Feb 07 – Chinese consumers reported to Asian Metal that lately they received much higher offer prices from international suppliers, even with some overtopping USD320/t CIF China. A Gansu-based consumer reported that they bought 900t of Pakistani lumpy Cr ore 40% mid last week at RMB56.5/dmtu (USD6.43/dmtu) ex port Tianjin. “ The trading company offered RMB57.5/dmtu (USD6.54/dmtu) ex ports when we called again after two days last week, additionally, I heard that some deals were made as high as RMB64/dmtu ex ports, which is unbelievable to me, ” added the source. a Liaoning-based consumers complained that a supplier even offered as high as USD328/t CIF China for lumpy Cr ore 40%min, origin from Pakistan. “ My Turkish suppliers informed us that they have few cargos available until April, ” remarked the source. A trader based in Tianjin was also informed by her Turkish suppliers that there are limited materials for prompt shipment. She revealed that a reliable supplier offered USD235/t CIF China for metallurgical grade lumpy Cr ore 42% twenty days ago, but she did not accept that offer in view of increasing adventures in the business. “ I will come back to the market after the Spring Festival holidays, ” said the source.
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An old speech by Mr Michael Kiernan MD on the 5th June last year. A bit difficult to listen to with the coughs and clinking of glasses, but please perservere. Is there anything in this: http://www.brr.com.au/event/CSM/851/11593
This does not sound good for shareholders of ConsMIn.
http://www.mineweb.net/mineweb/view/mineweb/en/page36?oid=19260&sn=Detail
DEALS UNDER SCRUTINY
Fiddlers under the roof – Vekselberg, Deripaska and Gilbertson
Asset claims shadow Rusal IPO and Consmin takeover bid
Author: John Helmer
Posted: Tuesday , 10 Apr 2007
MOSCOW -
With a little more bulge at the waistline, and a little more bush in his beard, Victor Vekselberg would be a dead ringer for Tevye the Milkman, hero of Fiddler on the Roof, Broadway's most famous musical about Russia. The fiddler of that tale was a symbol of survival in the rough days in Russia, before the Communist Revolution.
In the fifteen years since that revolution was reversed, starting in 1992, Vekselberg has survived especially well. You might say that Victor's theme song has taken all the conditional out of Tevye's famous refrain, If I were a Rich Man:
Lord who made the lion and the lamb
You decreed I should be what I am
Would it spoil some vast eternal plan
If I were a Wealthy Man?
But as a fiddler, according to complaints that are being tested in the courts of Russia and other jurisdictions, Vekselberg is a schemer of a different sort, allegedly converting other people's assets to make them his own. He denies this, and so does his most important lieutenant for the past two years, Brian Gilbertson. Both are about to ask the London market to believe them - Vekselberg in a main board listing of bauxite and aluminium producer, United Company Rusal; and Gilbertson in an AIM listing of the merger between manganese, chromite, nickel and iron-ore miner Consolidated Minerals (Consmin) and Pallinghurst Resources.
The allegations are also a test for JPMorgan Cazenove, which is believed to be seeking a mandate for the Rusal IPO; and which, on March 30, was formally named by Consolidated Minerals as its global broker, replacing Numis Securities.
Eleven months ago, according to one of Russia's wealth charts, Vekselberg possessed a fortune of $9.7 billion. Another wealth tracker, Forbes Russia, estimated it at $10 billion for 2006; that was double his fortune in 2005. According to Forbes also, Vekselberg occupied the 5th rung of the Russian ladder of fortune. These estimates are all based on the attributable value of Vekselberg's stakes in aluminium and bauxite producer SUAL; oil company TNK-BP; and conglomerate holding company, Renova. Vekselberg should soon be in a position to know exactly what his paper is worth, because he is selling out - converting his SUAL stake into 22% of the newly merged United Company Rusal, and then selling a sizeable share of that in a London IPO; selling his shares in TNK-BP for cash, probably to state owned oil company Rosneft; a big chunk of Renova's power stakes are also up for cash sale.
Buyers from Vekselberg, however, are obliged to ask the simple question - are the assets he's selling lawfully his? And not only buyers - Vekselberg's quondam rival, now erstwhile partner in United Company Rusal, Oleg Deripaska, is also facing similar challenges to the legality of his claim to the assets comprising his 66% stake in the new company.
A source close to them both has told Mineweb that, in their negotiations of merger terms, each agreed to give the other the following discount-premium offer: if asset claims are settled with compensation payments, then the concomitant loss of value in the merged company must be compensated. Either Vekselberg may gain shareholding at Deripaska's expense, or vice versa; or they may pay each other the money their asset troubles have caused.
There are two pending claims, one against Vekselberg, involving an alleged fraud in SUAL's takeover of the Volgograd Aluminium Plant; and one against Deripaska by his former partner and godfather, Mikhail Chernoy, over a trusteeship agreement granting Chernoy a 20% stake in the pre-merger Russian Aluminium (Rusal) company, its capital value and its dividend stream; according to Chernoy, that sums to about $5.2 billion.
The case against Vekselberg's companies has been moving through the Russian courts, and is now being prepared for filing abroad. The case against Deripaska was filed in the UK High Court last November 24. Mineweb has reported the detail of both cases before.
The case claims set out allegations and particulars, which lawyers and bankers, who have been invited to prepare the marketing of the new Rusal shares in a London listing, cannot avoid investigating, especially not if they are subject to the supervision of US Government regulators. Both Vekselberg and Deripaska concede they are in an awkward position there. Vekselberg renounced his US green card (permanent immigration visa) and limits his exposure to US court claims already pending against him, alleging fraud and theft of an oilfield. Through a spokesman, Deripaska has acknowledged being banned from entering the US for several years; a ban which UK and Australian officials have also corroborated, while they waived it for Deripaska to cross their frontiers. But the US visa he was granted between 2005 and 2006 has not been renewed. Lawyers for Deripaska in the UK have drawn up affidavits claiming he is almost never at his Belgrave Square house, or in his country home besides.
In Deripaska's case, it was his butler who may prove to be the Achilles heel, jurisdictionally speaking. Sources close to the Chernoy case say that, following the High Court filing late last year, detectives shadowing Deripaska warned process servers that he was on his way from his aircraft to his home at 5 Belgrave Square, in London. When his car pulled up, the process server made his move, and Deripaska scuttled for the tradesman's entrance of the mansion. It was the butler at the front-door who took Chernoy's writ - and he has subsequently testified that he gave it to Deripaska. The High Court will hear argument from lawyers in the case over whether Deripaska has been lawfully served, and the case may commence. If the judge rules in favour of Deripaska's butler, the lawyers go into further argument over whether Chernoy's claim to have executed his shareholding deal with Deripaska in London allows the High Court to adjudicate the dispute. When and if the case comes to trial on the merits, Deripaska will testify that the signature on the agreement with Chernoy isn't his.
End of Part 1 see part 2
http://www.mineweb.net/mineweb/view/mineweb/en/page36?oid=19260&sn=Detail
DEALS UNDER SCRUTINY
Fiddlers under the roof – Vekselberg, Deripaska and Gilbertson
Asset claims shadow Rusal IPO and Consmin takeover bid
Author: John Helmer
Posted: Tuesday , 10 Apr 2007
MOSCOW -
With a little more bulge at the waistline, and a little more bush in his beard, Victor Vekselberg would be a dead ringer for Tevye the Milkman, hero of Fiddler on the Roof, Broadway's most famous musical about Russia. The fiddler of that tale was a symbol of survival in the rough days in Russia, before the Communist Revolution.
In the fifteen years since that revolution was reversed, starting in 1992, Vekselberg has survived especially well. You might say that Victor's theme song has taken all the conditional out of Tevye's famous refrain, If I were a Rich Man:
Lord who made the lion and the lamb
You decreed I should be what I am
Would it spoil some vast eternal plan
If I were a Wealthy Man?
But as a fiddler, according to complaints that are being tested in the courts of Russia and other jurisdictions, Vekselberg is a schemer of a different sort, allegedly converting other people's assets to make them his own. He denies this, and so does his most important lieutenant for the past two years, Brian Gilbertson. Both are about to ask the London market to believe them - Vekselberg in a main board listing of bauxite and aluminium producer, United Company Rusal; and Gilbertson in an AIM listing of the merger between manganese, chromite, nickel and iron-ore miner Consolidated Minerals (Consmin) and Pallinghurst Resources.
The allegations are also a test for JPMorgan Cazenove, which is believed to be seeking a mandate for the Rusal IPO; and which, on March 30, was formally named by Consolidated Minerals as its global broker, replacing Numis Securities.
Eleven months ago, according to one of Russia's wealth charts, Vekselberg possessed a fortune of $9.7 billion. Another wealth tracker, Forbes Russia, estimated it at $10 billion for 2006; that was double his fortune in 2005. According to Forbes also, Vekselberg occupied the 5th rung of the Russian ladder of fortune. These estimates are all based on the attributable value of Vekselberg's stakes in aluminium and bauxite producer SUAL; oil company TNK-BP; and conglomerate holding company, Renova. Vekselberg should soon be in a position to know exactly what his paper is worth, because he is selling out - converting his SUAL stake into 22% of the newly merged United Company Rusal, and then selling a sizeable share of that in a London IPO; selling his shares in TNK-BP for cash, probably to state owned oil company Rosneft; a big chunk of Renova's power stakes are also up for cash sale.
Buyers from Vekselberg, however, are obliged to ask the simple question - are the assets he's selling lawfully his? And not only buyers - Vekselberg's quondam rival, now erstwhile partner in United Company Rusal, Oleg Deripaska, is also facing similar challenges to the legality of his claim to the assets comprising his 66% stake in the new company.
A source close to them both has told Mineweb that, in their negotiations of merger terms, each agreed to give the other the following discount-premium offer: if asset claims are settled with compensation payments, then the concomitant loss of value in the merged company must be compensated. Either Vekselberg may gain shareholding at Deripaska's expense, or vice versa; or they may pay each other the money their asset troubles have caused.
There are two pending claims, one against Vekselberg, involving an alleged fraud in SUAL's takeover of the Volgograd Aluminium Plant; and one against Deripaska by his former partner and godfather, Mikhail Chernoy, over a trusteeship agreement granting Chernoy a 20% stake in the pre-merger Russian Aluminium (Rusal) company, its capital value and its dividend stream; according to Chernoy, that sums to about $5.2 billion.
The case against Vekselberg's companies has been moving through the Russian courts, and is now being prepared for filing abroad. The case against Deripaska was filed in the UK High Court last November 24. Mineweb has reported the detail of both cases before.
The case claims set out allegations and particulars, which lawyers and bankers, who have been invited to prepare the marketing of the new Rusal shares in a London listing, cannot avoid investigating, especially not if they are subject to the supervision of US Government regulators. Both Vekselberg and Deripaska concede they are in an awkward position there. Vekselberg renounced his US green card (permanent immigration visa) and limits his exposure to US court claims already pending against him, alleging fraud and theft of an oilfield. Through a spokesman, Deripaska has acknowledged being banned from entering the US for several years; a ban which UK and Australian officials have also corroborated, while they waived it for Deripaska to cross their frontiers. But the US visa he was granted between 2005 and 2006 has not been renewed. Lawyers for Deripaska in the UK have drawn up affidavits claiming he is almost never at his Belgrave Square house, or in his country home besides.
In Deripaska's case, it was his butler who may prove to be the Achilles heel, jurisdictionally speaking. Sources close to the Chernoy case say that, following the High Court filing late last year, detectives shadowing Deripaska warned process servers that he was on his way from his aircraft to his home at 5 Belgrave Square, in London. When his car pulled up, the process server made his move, and Deripaska scuttled for the tradesman's entrance of the mansion. It was the butler at the front-door who took Chernoy's writ - and he has subsequently testified that he gave it to Deripaska. The High Court will hear argument from lawyers in the case over whether Deripaska has been lawfully served, and the case may commence. If the judge rules in favour of Deripaska's butler, the lawyers go into further argument over whether Chernoy's claim to have executed his shareholding deal with Deripaska in London allows the High Court to adjudicate the dispute. When and if the case comes to trial on the merits, Deripaska will testify that the signature on the agreement with Chernoy isn't his.
End of Part 1 see part 2
Part 2 -
http://www.mineweb.net/mineweb/view/mineweb/en/page36?oid=19260&sn=Detail
DEALS UNDER SCRUTINY
Registration of offshore companies, and initial placement offers (IPOs), also expose Vekselberg and Deripaska to government regulators and courts. Announcing the intention to sell shares in the new Rusal on the London Stock Exchange is an open invitation for those who claim their assets were fiddled to apply to the UK courts to retrieve them. Deripaska may have already proved that he is fleeter on foot that his Belgravia butler, but his and Vekselberg's acquisition tactics are now catching up with them.
Brian Gilbertson, one of South Africa's best-known businessmen, says he had nothing to do with any alleged unlawful asset takeovers when he was chief executive of SUAL, the Russian aluminium company controlled by Vekselberg. What Gilbertson did, or didn't do, knew or didn't know, during his time in Russia may be a footnote, as far as the Russians are concerned. But Australian shareholders, and regulators may be much more interested, when they review this month and next Gilbertson's takeover bid for Consolidated Minerals (Consmin) of Perth.
According to public announcements that began in February, Gilbertson and a South African associate Arne Frandsen have proposed a friendly takeover by their Pallinghurst Resources of Consmin. Details of where Pallinghurst's A$300 million cash offer is coming from are scarce. Gilbertson has told Consmin he is "targeting $1 billion of equity commitments"; that doesn't sound like the money is either in Gilbertson's pocket, or in Pallinghurst's bag, at least not yet. Brisbane-based AMCI, controlled by Hans Mende, has been identified by Gilbertson as one of his backers for the Consmin takeover. Six weeks ago, AMCI sold its Australian coal assets to CVRD of Brazil for A$835 million; subtracting net debt, it appears to have A$678 million cash on hand. Some of that appears to be buying Mende a seat on the board of the post-takeover Consmin. The Western Australian media have also reported rumours that Gilbertson's bid is being backed by Vekselberg as a silent partner in Pallinghurst.
South African sources have told Mineweb they believe Gilbertson may have converted Vekselberg's promise to pay him a multi-million dollar bonus for a successful share listing for SUAL, because Gilbertson couldn't deliver on the IPO; and because Vekselberg was reluctant to concede the obligation to pay the reward. Gilbertson declines to say if he and Vekselberg have settled for a promise from Vekselberg to deliver several dozen million dollars into Pallinghurst's capital. Vekselberg's spokesman also prefers not to answer questions on the matter.
With or without Vekselberg, however, Gilbertson's credibility is the driver of Pallinghurst's takeover of Consmin; if he succeeds in creating the new company, to be listed in London and Frankfurt, Gilbertson and his associates would control it with 60% of the shares. But first the Australian, then the London market, must decide whether Vekselberg's and Gilbertson's acquisition record in Russia warrants trust.
Gilbertson's name appears as one of the alleged defendants accused by Ralco, a 17% shareholder in the Volgograd Aluminium Plant, one of the key production assets taken over by SUAL soon after Gilbertson became chief executive of SUAL in Moscow in August 2004. Ralco says it was swindled out of its shareholding stake, and the Volgograd smelter fraudulently incorporated by SUAL between 2000 and 2005. Ralco's complaint has been before the Russian courts already. Asked what had happened to the Volgograd shares, Gilbertson told Mineweb: "I am satisfied that SUAL acted lawfully during the period of my tenure as President, and as you know, we had a well-staffed legal department to ensure that that was the case."
Gilbertson's contract with SUAL began in August 2004. It ended at the start of this month, when SUAL agreed to merge with rival Russian Aluminium (Rusal), owned by magnate Oleg Deripaska. Gilbertson, who had been first choice to become chairman of the board of the new United Company Rusal, was dropped, and Vekselberg, who controls about 22% of the new company, has been named the new chairman.
For several years, Ralco has been pursuing both SUAL and Vekselberg's holding Renova through the Russian courts, alleging they contrived the takeover of the Volgograd plant, using false-front companies that have since disappeared; forgery of documents presented in the Russian courts; false testimony; and fraudulent share transactions. The Russian authorities have investigated and substantiated some of Ralco's evidence, but Russian court rulings in Ralco's favour have been impossible to pursue, because the culprit companies have disappeared, or are empty of assets. International litigation to go after the alleged culprits has been in preparation instead.
The Volgograd smelter is an important asset in the merger deal between SUAL and Rusal. That deal officially closed, according to an announcement from the two companies, on March 27. Vekselberg was quoted by Rusal last week as claiming the new company "will promote a world class corporate governance structure, enabling us to meet the highest international standards..."
First built in 1959, and upgraded since then, aluminium production from Volgograd is estimated to account for 17% of SUAL's pre-merger output. In the merged Rusal, it comprises at least 4% of metal production. At the start of 2005, Renova, Vekselberg's personal holding company, announced the takeover of the smelter by SUAL: "The process of incorporating OAO Volgograd Aluminium (VgAZ) into OAO SUAL Group has been completed," Renova's website says. "On 31 December 2004 VgAZ became a subsidiary of OAO SUAL. The incorporation of VgAZ was the final step in consolidating the aluminium assets that followed an agreement signed between SUAL Group and the management company, SevZapProm, in December 2002. Under the agreement, VgAZ and the subsidiaries of OAO Metallurg, Volkhov Aluminium and Pikalevo Alumina, were integrated into the SUAL Group production chain two years ago. In 2004 OAO SUAL was re-organised to integrate these companies. On 30 September 2004, Volkhov Aluminium and Pikalevo Alumina became subsidiaries of OAO SUAL."
"The re-organisation of OAO SUAL and integration of VgAZ was based on a decision taken at an extraordinary general meeting (EGM) of shareholders on 31 August 2004. An absolute majority at the meeting voted in favour of the incorporation of VgAZ into OAO SUAL. On 15 December 2004, an amended charter was adopted at an EGM of OAO SUAL's shareholders to reflect this re-organisation. On 31 December 2004 the Uniform State Register noted the termination of activities at VgAZ. This formal procedure finalised the consolidation of OAO SUAL Group and VgAZ, its eighth subsidiary."
That states the legal position in Russia, as Vekselberg sees it, and also Gilbertson. Ralco's position in the Russian courts has won rulings from the bench, and Ralco sees the legal position differently. This is a challenge to the plans Vekselberg and Deripaska have announced to publicly list and sell their shares in the London IPO. Investment bankers claim the new company should hit a valuation of $30 billion.
Ralco has identified Gilbertson and Vekselberg, along with two others linked to both SUAL and Renova; plus 18 companies that fall under Russian, US and UK jurisdiction.
Ralco charges that its 17% stake in the Volgograd smelter was first diluted illegally, and then taken in a regional court case far from Moscow, when debts and evidence were fabricated, and the judge misled, while Ralco was kept in the dark, and "represented" at a court hearing by an impostor paid by Ralco's attackers. Ralco estimates the value of its stake at more than $40 million, and it has the option to seek treble damages if it can prove racketeering.
A string of two Russian and one Cyprus-registered companies has also been identified as participating in the alleged scheme to convert Ralco's shares into SUAL property in the months just before Gilbertson took office, and in the following six months.
Gilbertson acknowledged in mid-2005, almost a year after he took over at SUAL, that he was aware of the Volgograd smelter case and the Ralco claims. He said he was appointing a new legal counsel at SUAL to look into the affair. Maxim Goldman took this position in July 2005.
In November 2004, after Gilbertson's engagement and following a Volgograd regional court ruling, which had invalidated the dilution of Ralco's shareholding, SUAL had said through a spokesman: "concerning Volgograd Aluminium, we are sure our partners are in the right. Beyond this, we do not wish to add anything further."
That's as kosher as Tevye the Milkman could have wished for - unless it's wishful thinking.
http://www.mineweb.net/mineweb/view/mineweb/en/page36?oid=19260&sn=Detail
DEALS UNDER SCRUTINY
Registration of offshore companies, and initial placement offers (IPOs), also expose Vekselberg and Deripaska to government regulators and courts. Announcing the intention to sell shares in the new Rusal on the London Stock Exchange is an open invitation for those who claim their assets were fiddled to apply to the UK courts to retrieve them. Deripaska may have already proved that he is fleeter on foot that his Belgravia butler, but his and Vekselberg's acquisition tactics are now catching up with them.
Brian Gilbertson, one of South Africa's best-known businessmen, says he had nothing to do with any alleged unlawful asset takeovers when he was chief executive of SUAL, the Russian aluminium company controlled by Vekselberg. What Gilbertson did, or didn't do, knew or didn't know, during his time in Russia may be a footnote, as far as the Russians are concerned. But Australian shareholders, and regulators may be much more interested, when they review this month and next Gilbertson's takeover bid for Consolidated Minerals (Consmin) of Perth.
According to public announcements that began in February, Gilbertson and a South African associate Arne Frandsen have proposed a friendly takeover by their Pallinghurst Resources of Consmin. Details of where Pallinghurst's A$300 million cash offer is coming from are scarce. Gilbertson has told Consmin he is "targeting $1 billion of equity commitments"; that doesn't sound like the money is either in Gilbertson's pocket, or in Pallinghurst's bag, at least not yet. Brisbane-based AMCI, controlled by Hans Mende, has been identified by Gilbertson as one of his backers for the Consmin takeover. Six weeks ago, AMCI sold its Australian coal assets to CVRD of Brazil for A$835 million; subtracting net debt, it appears to have A$678 million cash on hand. Some of that appears to be buying Mende a seat on the board of the post-takeover Consmin. The Western Australian media have also reported rumours that Gilbertson's bid is being backed by Vekselberg as a silent partner in Pallinghurst.
South African sources have told Mineweb they believe Gilbertson may have converted Vekselberg's promise to pay him a multi-million dollar bonus for a successful share listing for SUAL, because Gilbertson couldn't deliver on the IPO; and because Vekselberg was reluctant to concede the obligation to pay the reward. Gilbertson declines to say if he and Vekselberg have settled for a promise from Vekselberg to deliver several dozen million dollars into Pallinghurst's capital. Vekselberg's spokesman also prefers not to answer questions on the matter.
With or without Vekselberg, however, Gilbertson's credibility is the driver of Pallinghurst's takeover of Consmin; if he succeeds in creating the new company, to be listed in London and Frankfurt, Gilbertson and his associates would control it with 60% of the shares. But first the Australian, then the London market, must decide whether Vekselberg's and Gilbertson's acquisition record in Russia warrants trust.
Gilbertson's name appears as one of the alleged defendants accused by Ralco, a 17% shareholder in the Volgograd Aluminium Plant, one of the key production assets taken over by SUAL soon after Gilbertson became chief executive of SUAL in Moscow in August 2004. Ralco says it was swindled out of its shareholding stake, and the Volgograd smelter fraudulently incorporated by SUAL between 2000 and 2005. Ralco's complaint has been before the Russian courts already. Asked what had happened to the Volgograd shares, Gilbertson told Mineweb: "I am satisfied that SUAL acted lawfully during the period of my tenure as President, and as you know, we had a well-staffed legal department to ensure that that was the case."
Gilbertson's contract with SUAL began in August 2004. It ended at the start of this month, when SUAL agreed to merge with rival Russian Aluminium (Rusal), owned by magnate Oleg Deripaska. Gilbertson, who had been first choice to become chairman of the board of the new United Company Rusal, was dropped, and Vekselberg, who controls about 22% of the new company, has been named the new chairman.
For several years, Ralco has been pursuing both SUAL and Vekselberg's holding Renova through the Russian courts, alleging they contrived the takeover of the Volgograd plant, using false-front companies that have since disappeared; forgery of documents presented in the Russian courts; false testimony; and fraudulent share transactions. The Russian authorities have investigated and substantiated some of Ralco's evidence, but Russian court rulings in Ralco's favour have been impossible to pursue, because the culprit companies have disappeared, or are empty of assets. International litigation to go after the alleged culprits has been in preparation instead.
The Volgograd smelter is an important asset in the merger deal between SUAL and Rusal. That deal officially closed, according to an announcement from the two companies, on March 27. Vekselberg was quoted by Rusal last week as claiming the new company "will promote a world class corporate governance structure, enabling us to meet the highest international standards..."
First built in 1959, and upgraded since then, aluminium production from Volgograd is estimated to account for 17% of SUAL's pre-merger output. In the merged Rusal, it comprises at least 4% of metal production. At the start of 2005, Renova, Vekselberg's personal holding company, announced the takeover of the smelter by SUAL: "The process of incorporating OAO Volgograd Aluminium (VgAZ) into OAO SUAL Group has been completed," Renova's website says. "On 31 December 2004 VgAZ became a subsidiary of OAO SUAL. The incorporation of VgAZ was the final step in consolidating the aluminium assets that followed an agreement signed between SUAL Group and the management company, SevZapProm, in December 2002. Under the agreement, VgAZ and the subsidiaries of OAO Metallurg, Volkhov Aluminium and Pikalevo Alumina, were integrated into the SUAL Group production chain two years ago. In 2004 OAO SUAL was re-organised to integrate these companies. On 30 September 2004, Volkhov Aluminium and Pikalevo Alumina became subsidiaries of OAO SUAL."
"The re-organisation of OAO SUAL and integration of VgAZ was based on a decision taken at an extraordinary general meeting (EGM) of shareholders on 31 August 2004. An absolute majority at the meeting voted in favour of the incorporation of VgAZ into OAO SUAL. On 15 December 2004, an amended charter was adopted at an EGM of OAO SUAL's shareholders to reflect this re-organisation. On 31 December 2004 the Uniform State Register noted the termination of activities at VgAZ. This formal procedure finalised the consolidation of OAO SUAL Group and VgAZ, its eighth subsidiary."
That states the legal position in Russia, as Vekselberg sees it, and also Gilbertson. Ralco's position in the Russian courts has won rulings from the bench, and Ralco sees the legal position differently. This is a challenge to the plans Vekselberg and Deripaska have announced to publicly list and sell their shares in the London IPO. Investment bankers claim the new company should hit a valuation of $30 billion.
Ralco has identified Gilbertson and Vekselberg, along with two others linked to both SUAL and Renova; plus 18 companies that fall under Russian, US and UK jurisdiction.
Ralco charges that its 17% stake in the Volgograd smelter was first diluted illegally, and then taken in a regional court case far from Moscow, when debts and evidence were fabricated, and the judge misled, while Ralco was kept in the dark, and "represented" at a court hearing by an impostor paid by Ralco's attackers. Ralco estimates the value of its stake at more than $40 million, and it has the option to seek treble damages if it can prove racketeering.
A string of two Russian and one Cyprus-registered companies has also been identified as participating in the alleged scheme to convert Ralco's shares into SUAL property in the months just before Gilbertson took office, and in the following six months.
Gilbertson acknowledged in mid-2005, almost a year after he took over at SUAL, that he was aware of the Volgograd smelter case and the Ralco claims. He said he was appointing a new legal counsel at SUAL to look into the affair. Maxim Goldman took this position in July 2005.
In November 2004, after Gilbertson's engagement and following a Volgograd regional court ruling, which had invalidated the dilution of Ralco's shareholding, SUAL had said through a spokesman: "concerning Volgograd Aluminium, we are sure our partners are in the right. Beyond this, we do not wish to add anything further."
That's as kosher as Tevye the Milkman could have wished for - unless it's wishful thinking.
just out of curiousity... will management play games to keep the share price low for a convenient take-over price? Management seems to be on Gilbertson's side. i think there is a possibility that management is witholding any positive news of the company... in a asx-compliance sense of course. 
any rumours out there about a second buyer???
any rumours out there about a second buyer???
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Hi, The targets you mention are quite interesting. Consolidated Minerals (CNM) closed in London on Friday at £1.085 and that is just 0.5p off their six month high.
This story is from www.minweb.com to see the full story go to the link below.
ConsMin management are trying to keep the good news quiet.
I have emailed them many times about the prices that I am getting for chrome and manganese from Chinese Metal traders, ConsMin management say that they are happy with their position and consider that they are not breaking the ASX disclosure rules, but they are definitely stretching them.
http://www.mineweb.net/mineweb/view/mineweb/en/page67?oid=19348&sn=Detail
SHAREHOLDER OPPOSITION
Gilbertson’s initial bid for ConsMin may be holed
Investor resistance and a strong share price may force Brian Gilbertson’s Pallinghurst Resources to raise its bid for Australian miner Consmin.
Author: Ross Louthean
Posted: Wednesday , 11 Apr 2007
PERTH -
Brian Gilbertson's good ship Pallinghurst Resources may be heading for the shoals in its takeover bid for the West Australian manganese, chromite and nickel miner Consolidated Minerals Ltd.
There has been mounting shareholder opposition to the bid - complete with a dedicated anti-takeover website -- and the rising share price is adding another negative.
ConsMin's share price on the Australian Stock Exchange today was $A2.63 ($US2.16) and the Pallinghurst offer was $A1.38/share ($US1.13/share) plus two shares in the new Consmin for every five shares held, with shareholders receiving a 40% stake in the new company. Pallinghurst wants to gain a minimum 50.1%. At the time ConsMin (whose board is supporting the Pallinghurst bid) said the transaction valued the company at an enterprise value of $A625 million ($US515), or at $A2.28/share ($US1.87/share).
One Perth stockbroking firm assessed that the market value today of the Pallinghurst package was $A2.30/share ($US1.89/share) which, with market unknowns, does not make it attractive compared to the raw share price, which has been lifting through improved production performances and a soaring nickel price. The Intierra group's Minmet research service put the market capitalisation of ConsMin today at $A595.2 M ($US490.7 M).
Alex Passmore, Head of Metals & Mining for Paterson Securities, who felt the bid was heading for the rocks, believes Pallinghurst must increase the offer.
ConsMin management are trying to keep the good news quiet.
I have emailed them many times about the prices that I am getting for chrome and manganese from Chinese Metal traders, ConsMin management say that they are happy with their position and consider that they are not breaking the ASX disclosure rules, but they are definitely stretching them.
http://www.mineweb.net/mineweb/view/mineweb/en/page67?oid=19348&sn=Detail
SHAREHOLDER OPPOSITION
Gilbertson’s initial bid for ConsMin may be holed
Investor resistance and a strong share price may force Brian Gilbertson’s Pallinghurst Resources to raise its bid for Australian miner Consmin.
Author: Ross Louthean
Posted: Wednesday , 11 Apr 2007
PERTH -
Brian Gilbertson's good ship Pallinghurst Resources may be heading for the shoals in its takeover bid for the West Australian manganese, chromite and nickel miner Consolidated Minerals Ltd.
There has been mounting shareholder opposition to the bid - complete with a dedicated anti-takeover website -- and the rising share price is adding another negative.
ConsMin's share price on the Australian Stock Exchange today was $A2.63 ($US2.16) and the Pallinghurst offer was $A1.38/share ($US1.13/share) plus two shares in the new Consmin for every five shares held, with shareholders receiving a 40% stake in the new company. Pallinghurst wants to gain a minimum 50.1%. At the time ConsMin (whose board is supporting the Pallinghurst bid) said the transaction valued the company at an enterprise value of $A625 million ($US515), or at $A2.28/share ($US1.87/share).
One Perth stockbroking firm assessed that the market value today of the Pallinghurst package was $A2.30/share ($US1.89/share) which, with market unknowns, does not make it attractive compared to the raw share price, which has been lifting through improved production performances and a soaring nickel price. The Intierra group's Minmet research service put the market capitalisation of ConsMin today at $A595.2 M ($US490.7 M).
Alex Passmore, Head of Metals & Mining for Paterson Securities, who felt the bid was heading for the rocks, believes Pallinghurst must increase the offer.
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Pallinghurst will probably play this one out in a similar manner to Cemex in their bid for Rinker Group. Just leave the bid on the table and wait and see if a rival bidder turns up. If no rival appears on the scene, then the cash part of the offer will be raised to give a price at the bottom end of estimates. It's as simple as that.
MINING NEWS JUST OUT, I will post the whole story as I cannot link to it, as you must be a member to read it.
MINING NEWS - JUST OUT NOW
Takeover bid still a goer: ConsMin
Paul Garvey
Monday, 16 April 2007
CONSOLIDATED Minerals managing director Rod Baxter has again defended the bid of Brian Gilbertson's Pallinghurst Resources, following claims from the company's ex-advisor that the bid was "heading for the rocks".
Numis Securities, which was the broker and nominated advisor regulating ConsMin's London listing before its sudden resignation soon after the Pallinghurst deal was announced, said on Friday it had upgraded its target price for ConsMin to 146p, or around $A3.65.
"Brian Gilbertson and the team at Pallinghurst may need to revise their offer for Consolidated Minerals as the shares rise above the effective 96p ($2.40) offer," Numis said.
Pallinghurst – headed by former BHP Billiton head Gilbertson – is offering $1.38 cash plus two shares in the new ConsMin for every five currently held. The per-share value of the bid, which had a notional value of $2.28 per share when it was launched, was $2.448 in morning trade based on the current price of $2.67.
Speaking to MiningNews.net, Baxter said he did not agree with Numis' suggestion that the Pallinghurst bid was in trouble, adding that a recent road show through Australia, North America and Europe had met with a favourable response, particularly from larger institutional investors.
In addition, Baxter pointed out that the two-for-five share component of the offer meant shareholders could participate in the upside of the new ConsMin.
"That was the whole essence of this transaction," Baxter said.
"We wanted to give shareholders exposure to the upside in the ConsMin growth story going forward. As the share price moves up as people become more comfortable with the offer, the value of the offer also rises."
Baxter added that both Gilbertson and Hans Mende – the head of private coal group AMCI, Pallinghurst's partner in the ConsMin bid – would be arriving in Australia soon for another series of road shows to Australian investors.
Baxter also dismissed suggestions that the market update issued by the company on the Thursday afternoon before the Easter break was a response to mounting pressure from the shareholders behind a website urging ConsMin investors to vote against the Pallinghurst offer.
The Consolidated Minerals Takeover – Vote No website has used reported rallies in the manganese and chromite markets as justification for its opposition to the bid.
However, Baxter said the market update was consistent with its continuous disclosure policies.
"We consistently said when the new management took over we would continue to look at our ongoing disclosure obligations, and share with our shareholders what's happening with the company," Baxter said.
Baxter said that a fall in manganese stockpiles in China had driven a slow uptick in the manganese market, although that had been partially countered by rising shipping costs and a strengthening Australian dollar.
ConsMin is increasing FOB manganese prices to rise by 8-10% on the $US2.09/dmtu received in the first half of financial 2007.
Chromite prices, meanwhile, are now expected to increase by around 6% on the $US148/t received in the first half.
ConsMin shares were up 2c to $2.67 in morning trade today.
MINING NEWS - JUST OUT NOW
Takeover bid still a goer: ConsMin
Paul Garvey
Monday, 16 April 2007
CONSOLIDATED Minerals managing director Rod Baxter has again defended the bid of Brian Gilbertson's Pallinghurst Resources, following claims from the company's ex-advisor that the bid was "heading for the rocks".
Numis Securities, which was the broker and nominated advisor regulating ConsMin's London listing before its sudden resignation soon after the Pallinghurst deal was announced, said on Friday it had upgraded its target price for ConsMin to 146p, or around $A3.65.
"Brian Gilbertson and the team at Pallinghurst may need to revise their offer for Consolidated Minerals as the shares rise above the effective 96p ($2.40) offer," Numis said.
Pallinghurst – headed by former BHP Billiton head Gilbertson – is offering $1.38 cash plus two shares in the new ConsMin for every five currently held. The per-share value of the bid, which had a notional value of $2.28 per share when it was launched, was $2.448 in morning trade based on the current price of $2.67.
Speaking to MiningNews.net, Baxter said he did not agree with Numis' suggestion that the Pallinghurst bid was in trouble, adding that a recent road show through Australia, North America and Europe had met with a favourable response, particularly from larger institutional investors.
In addition, Baxter pointed out that the two-for-five share component of the offer meant shareholders could participate in the upside of the new ConsMin.
"That was the whole essence of this transaction," Baxter said.
"We wanted to give shareholders exposure to the upside in the ConsMin growth story going forward. As the share price moves up as people become more comfortable with the offer, the value of the offer also rises."
Baxter added that both Gilbertson and Hans Mende – the head of private coal group AMCI, Pallinghurst's partner in the ConsMin bid – would be arriving in Australia soon for another series of road shows to Australian investors.
Baxter also dismissed suggestions that the market update issued by the company on the Thursday afternoon before the Easter break was a response to mounting pressure from the shareholders behind a website urging ConsMin investors to vote against the Pallinghurst offer.
The Consolidated Minerals Takeover – Vote No website has used reported rallies in the manganese and chromite markets as justification for its opposition to the bid.
However, Baxter said the market update was consistent with its continuous disclosure policies.
"We consistently said when the new management took over we would continue to look at our ongoing disclosure obligations, and share with our shareholders what's happening with the company," Baxter said.
Baxter said that a fall in manganese stockpiles in China had driven a slow uptick in the manganese market, although that had been partially countered by rising shipping costs and a strengthening Australian dollar.
ConsMin is increasing FOB manganese prices to rise by 8-10% on the $US2.09/dmtu received in the first half of financial 2007.
Chromite prices, meanwhile, are now expected to increase by around 6% on the $US148/t received in the first half.
ConsMin shares were up 2c to $2.67 in morning trade today.
