CXM - Centrex Limited

[happytown]

cheers lazyfish,

re the .5% p (at wilgerup), see the co ann dated 17/07/08 'increase in wilgerup indicated mineral resource'

re capex

- for wilgerup that is included in the co's figures of $42t costs (mining, crush/screen, transport, shipping, environmental etc) from the co's feb '09 broker presentation [i have assumed that the port lincoln refurbishment is included in this (shipping) as the co has not stated otherwise nor specifically provided separate figures for this] and further, they have stated that wilgerup will be self-funded from the wisco jv payments

- for the magnetite operations, the only capex mentioned is up to $150M for sheep hill port (to be funded 50/50 [and owned] with wisco and wisco to assist with funding if needed) - as a consequence the (2) valuations of these only include, (the first valuation) a value based solely on the jv contributions, ie $186M [and ignoring the $75M wisco will be paying for exploration before cxm has to shell out 1c] for wisco's 60% and $40M for baotou's 50% and (for the second valuation) an additional nominal figure of $1 p dwt [neither of these valuations include the port capex, however i considered them to be sufficiently conservative and further, they are valuations solely of the exporation targets limited to half of their ELs]

if you have any ideas as to the capex beyond the above, feel free to re-crunch the numbers

cheers

 

[happytown]

according to information provided in previous company anns, the following anns should materialise this month:

da approval for exporting through port lincoln (100%-owned wilgerup dso)

finalisation of jv with wisco (wuhan) and second (and most significant) jv payment of $51.5M (40%/60% jv magnetite)

cheers

 

[happytown]

from a presentation to ausimm released today

as to the da for export of Fe through pt lincoln

...

The EPA has requested further information which we are in the process of supplying

...

as to the wisco jv

...

Formal signing of Transaction Documents expected by end of July 2009
Government consents and permits expected in July/August 2009
Drilling at the priority Carrow deposit planned to commence September

...

cheers

 

[happytown]

jv with wuhan (wisco) signed, with a change, the 1st instalment ($51.5M) to be paid upon govt approvals (expected in aug) rather than 7 days after signing

Centrex Metals Limited (“Centrex”) and Wuhan Iron & Steel (Group) Corporation (“WISCO”) last night signed a series of formal transaction agreements that formalise the terms and conditions of the magnetite joint venture between the groups.

Key commercial terms:

a. WISCO to pay Centrex a total of up to A$186,000,000 for a 60% equity in the JV (minimum payable A$78m)

b. WISCO to sole fund the first A$75,000,000 of Work Commitments into the joint venture to cover exploration and study costs.

c. WISCO to additionally invest in Centrex via a share placement of 40,399,599 shares at A$0.25/share to raise further $10.09m as agreed in the Heads of Agreement dated 18th December 2008. [The placement will be made under the 15% limit contained in ASX Listing Rule 7.1].

Centrex and WISCO have agreed that the Stage 1 scope for exploration and studies is to develop two five million tonne magnetite concentrate operations.

Centrex and WISCO have agreed to form a 50:50 joint venture for the purpose of developing a deep water port facility at Sheep Hill.

Cash received by Centrex fully funds proposed Wilgerup hematite mine development.

Government approvals expected by August 2009

...

cheers

 

[happytown]

...

valuation

cash [includes initial wisco payment and $10M share placement, expected by july] $70.65M, approx .22 p share

wilgerup (based just on the 10.5Mt massive hematite jorc indicated @ 59.7%, 30% lump, 70% fines @ .97 for fines and 1.12 for lumps [2009 hammersley contract price] equating to US$57.90p dwt for fines and US$66.86p dwt for lumps and aud/usd exchange rate @ .7993 [17/06/09] = $72.43 [fines], $83.64 [lumps] and total costs of $42p dwt) = $355,561,500 / 312,805,665 [includes 40,000,000 wisco shares] = approx $1.13 p share

wisco jv [wisco 60% valued at 186M] $124M, approx .39 p share

baotou jv [baotou 50% valued at $40M] $40M, approx .13 p share

no price attached to remaining ELs

total approx $1.87 p share, current price .28 p share

...
​

please feel free to correct any errors of fact or assumption in the above
​

cheers

more than happy too, happytown ,

ummmmm, you included the wisco 1st instalment twice ($51.5M)

so i did

deduct approx .16 from the valuation please happytown

okalee dokalee neighboureeno

so a valuation of approx $1.71 then, currently .34

cheers

 

[Donga]

Thanks Happytown for your analysis on CXM. After reviewing the trail with the other contributors, I hopped on board at 27.5c just a couple of weeks back. Today 50c and be interesting to see when this one takes a breather.

 

[happytown]

cheers donga,

tightly held stock, top 20 own 80%+

there may be news this month re govt approvals and permits for the wisco jv from firb and the rest, which if approved would trigger the first substantial payment of $51.5M (to cxm)

possibly news also re the wilgerup export permit thru pt lincoln da

ann re cockabidnie rock chip samples today (first for this tenement), drilling planned, potentially adding to current dso jorc estimate for the region, by the time shipping begins in 2010

...

High grade hematite rock chip samples average 66.0% Fe; 4.0% SiO2; 0.60% Al2O3; 0.009% P

...

cheers

another quality post brought to you by happytown inc

 

[happytown]

according the the presentation ann released today, the da for fe export from wilgerup out of pt lincloln is expected to be decided tomorrow by the dac

cheers

another quality post brought to you by happytown inc
pending shareholder approval

 

[happytown]

ann out this morning regarding the dac approval of the da for export of fe from wilgerup

...

Centrex was not present at the formal meeting and is not aware of the outcomes of that meeting. Furthermore, Centrex does not expect to be notified of the formal outcomes or recommendations from that meeting, but is waiting on the decision from the Minister. However the DAC website previously included the Development Case Officer’s recommendations to approve the proposal subject to certain operating and performance criteria.

The Company is confident that the DAC will make a positive recommendation to the Minister given the supportive comments made by the various state government agencies at the meeting.

Centrex has been notified that the Minister will make his decision public in due course after considering all relevant information including the DAC recommendation.

cheers

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making up a mess of fun
tra la la la la la la la, tra la la la la la la la la

 

[lazyfish]

Hi sorry haven't checked this thread for a long time. My knowledge of iron ore isn't the greatest but having worked on few iron ore mine and having seen a few more, I don't know whether .5%p is marketable. I know there's fancy things like dephosphorization so I should say I am not aware of anyone selling any ore that's .5%P. Cheers.

 

[happytown]

lazyfish, fair point about high P %

however, regarding the marketing of centrex's wilgerup dso, it has all been pre-sold under hoa's with baotou iron & steel co ltd and shenyang orient iron & steel co ltd, who would be well aware of its fe and de content

cxm's chairman, commenting on the gfc in his 28/11/08 address (p 2),

...

'depsite some gloom over iron ore contracts with chinese steel mills over the next year or two, we have had no indication from the chinese companies who have agreed to purchase wilgerup ore that they will not be proceeding'

...

recent rock chip sampling from the nearby satellite cockabidnie potential dso prospect has averaged 0.009% P

cheers

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[lazyfish]

Chinese mills normally do their own blending by sourcing ores from a number of mines. I think the ore from CXM probably only makes up a small portion anyway. The long term viability of this project seems to be dependent on management's ability to market this product to Chinese mills, because the high P makes the product itself quite unattractive. Just my opinion.

 

[happytown]

update on cxm

late last month, the long-awaited jv with baotou was inked (jv transaction docs), for the bungalow mag jv (50/50) [see ann 27/08/09]

also signed a sales agreement for wilgerup dso with baotou (getting rid of some of that pesky 0.5%P ore, lazyfish) [see ann 27/08/09]

awaiting ann from minister re wilgerup export da approval - expected anytime now

granted new el, in NSW, prospective for

potentially ... economic iron ore mineralisation

[see ann 09/09/09]

NSW the new SA, which was the new WA, when it comes to Fe

cheers

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now doing their own proofreading

 

[Gillie]

Heard a rumour that CXM has received court approval this morning, is anyone able to confirm this? - it isn't on market yet but the price is starting to move.

 

[prawn_86]

Here you are Gillie and all those interested - http://www.news.com.au/adelaidenow/story/0,22606,26170709-2682,00.html

 

[Gillie]

Thanx for that Prawn...

Announcement just came through and they have gone into trading halt. Back on a 10:15am

 

[Miner]

Is there some one following CXM ?
How far is it really from execution.
If Port Lincoln was approved then why they are wasting money for a parallel port ? It is not cheap

DNH

 

[Bigukraine]

Is there some one following CXM ?
How far is it really from execution.
If Port Lincoln was approved then why they are wasting money for a parallel port ? It is not cheap

DNH

Hi miner,
Pt Lincoln would be ok short term but long term would /may have impact on aquaculture in area CSS etc etc. Local bus. people have banded together and shown/ stated their disaproval in this venture in local adelaide paper about fortnight ago but has approval from our state gov. Other mining in the area would benifit from sheeps hill plus extra revenue for CMX and partners from port fee's. All info you require is in recent CMX 2009 report . Have a read it will answer all your questions and p.s report in local paper today on CMX re mgr stepping down as per asx ann. worth a read if you can get access to this paper (in bus. section) rgds bigu (not holding but watching closely.) hope this helps

 

[Miner]

Hi miner,
Pt Lincoln would be ok short term but long term would /may have impact on aquaculture in area CSS etc etc. Local bus. people have banded together and shown/ stated their disaproval in this venture in local adelaide paper about fortnight ago but has approval from our state gov. Other mining in the area would benifit from sheeps hill plus extra revenue for CMX and partners from port fee's. All info you require is in recent CMX 2009 report . Have a read it will answer all your questions and p.s report in local paper today on CMX re mgr stepping down as per asx ann. worth a read if you can get access to this paper (in bus. section) rgds bigu (not holding but watching closely.) hope this helps

Thanks and it does help

I will query the guys at Adelaide to get hold of the news item unless some one posts here.

Thanks again and it does make sense

 

[springhill]

CXM is piled fully to the MC with uncommitted cash, even after returning a special dividend, worth $15m+ fully franked, to shareholders earlier this year.

The potential and resources to become a truly great company are all there, only time will tell if they are able to make that transition.

MC - $51m
SP - 16.5c
Shares - 313m
Options - 3m
Cash - $49m

The focus of CXM.
• Three significant Chinese backed joint ventures covering iron ore, base metals and a deep-water port
• Acquiring more projects and seeking to form additional international partnerships
• Attracting foreign investment to fund project development and grow the business
• A$ 47.6M uncommitted cash after recently paying A$ 15.7M fully franked special dividend
• Developing cost effective infrastructure and export solutions for projects
• New representation in India to build an additional investment base

CXM Projects.
• Eyre Iron Joint Venture - 40% interest in magnetite iron ore projects with Wuhan Iron & Steel funding first $75M of development; 680Mt Mineral Resource at flagship Fusion project
• Port Spencer Joint Venture - 50% interest in proposed deepwater port facility with Wuhan Iron & Steel to fund next $4M of development; State Government approval received
• Bungalow Joint Venture – Baotou Iron & Steel earning 50% interest by funding first $40M of development; 338Mt Mineral Resource
• Goulburn Joint Venture - Shandong 5th Geo-Mineral Prospecting Institute earning 35% for $2M exploration; ability to earn 80% by funding to production
• Wilgerup - 100% interest 13.3Mt Indicated DSO Resource
• Eyre Peninsula Exploration - 100% interest in iron ore rights to 7 licences in South Australia
• Gundaroo - Exploration Licence Application for NSW GoldBase Metals project near Goulburn