FLX - Felix Resources

[Reefer]

Hi MS
I am a Felix tragic from way back with an interest in all coals - I've also held Austral and Centennial at different times The man you should talk to is Analyst99 on the HotCopper forum. He has been pushing Whitehaven to me since they were $2.15 about 5-6 weeks ago. Gave me some good news about a week ago when they were $2.60 but again did not have available funds. I am hopring there is enough of a correction on Monday to provide a window to get into WHC as I think they will be the next rampant coal stock. But speak to Analyst as he knows a lot about coal - it may be Noirua's alter ego as he has similar knowledge. He is very upbeat on WHS and also recommends CES as a speccie - big coal interests in Indonesia.

 

[michael_selway]

Hi MS
I am a Felix tragic from way back with an interest in all coals - I've also held Austral and Centennial at different times The man you should talk to is Analyst99 on the HotCopper forum. He has been pushing Whitehaven to me since they were $2.15 about 5-6 weeks ago. Gave me some good news about a week ago when they were $2.60 but again did not have available funds. I am hopring there is enough of a correction on Monday to provide a window to get into WHC as I think they will be the next rampant coal stock. But speak to Analyst as he knows a lot about coal - it may be Noirua's alter ego as he has similar knowledge. He is very upbeat on WHS and also recommends CES as a speccie - big coal interests in Indonesia.

Hi Reefer, thanks for the info, i will check it out

Btw what is the code for "AUSTRAL"

thx

MS

 

[noirua]

Felix Resources First Quarterly Report: http://www.asx.com.au/asxpdf/20071022/pdf/31581prvsscvp4.pdf

 

[Reefer]

Just posted this on HC Noirua.
This seems to me to be a very bullish report:
"Coal sales of 1,958,000 tonnes for the quarter is a record for our three mines.
The Ashton longwall production for the quarter exceeded budget by 250,000 tonnes
Minerva production for the quarter has exceeded budget and sales are dependent on rail availability as the port of Gladstone is now delivering reasonable vessel turnaround times with the commissioning of the third shiploader and the fourth berth.
Felix has put on hold the sale of 49% equity in Yarrabee.
The coal market has strengthened considerably in the past three months. Felix has recently concluded a sale of Ashton thermal coal at US$80 FOB for 6320 Kcal FOB which equates to US$85 for Ashton’s higher CV thermal coal.
Moolarben is the next project for development. The court case with Xstrata/Ulan Coal Mines was completed on 3rd October 2007 following Judge Smart’s onsite inspection of the old cattle fences and stockyards on the Ulan property. We now await the court’s determination. Felix maintains it’s position that the Xstrata/Ulan case is without merit
Coal prices are improving although the strong Australian dollar will affect profitability. Felix has 34 customers in 10 countries and price negotiations are continuing for the 2008 deliveries."

Taken the liberty of not pasting any bad news but there is very little of that, apart from continuing demurrage problems at Newcastle port. I thought the recent price rise was expectations of success in the Moolarben case, but this company is obviously galloping off full steam toward the heady broker projections of the next few years.

This is the best quarterly they have released imo. I think the big news for all us long term believers is the strength of the current coal prices. I will be interested to see what the "friendly" brokers do when they release new reports, becuase I'm not sure from memory that they plugged in increasing prices fro thermal and coking, certainly not in the long run.

 

[noirua]

Not mentioned in the quarterly report are the other interests of Felix Resources:

1). Royalty interest on WPG production of iron ore in South Australia.
2). Indian JV exploration to supply coal to a powerstation.
3). Phillipson Coal interests on 5 billion tonnes of sub-bitumous coals on sale/royalty option to Flinders.
4). ADC interest on former Whyalla Demonstration Plant through S.A.S.E.
5). 51% interest in the Athena Underground Project (560 million tonnes inferred resource) to mine coal near Minerva.

 

[noirua]

Excitement rises as Felix Resources push on towards $7.00 following the upbeat First Quarter Results. The main bullish factor was the price obtained for Ashton thermal coal at US$80 per tonne. Ashton thermal normally trades about US$5 below benchmark.

Felix are likely to get figures closer to US$70 for 2008 Ashton thermal and nearer US$80 for Yarrabee thermal. These prices would be up 35% - 40% on 2007 in US Dollar terms, but will be hit by the strong Aussie against the Greenback.

Felix have decided to hold the sale of 49% of Yarrabbe due to bouyant Thermal and PCI coal prices.

 

[michael_selway]

Not mentioned in the quarterly report are the other interests of Felix Resources:

1). Royalty interest on WPG production of iron ore in South Australia.
2). Indian JV exploration to supply coal to a powerstation.
3). Phillipson Coal interests on 5 billion tonnes of sub-bitumous coals on sale/royalty option to Flinders.
4). ADC interest on former Whyalla Demonstration Plant through S.A.S.E.
5). 51% interest in the Athena Underground Project (560 million tonnes inferred resource) to mine coal near Minerva.

Potentially this company could be huge i.e. major coal player!

Do you reckon that it will also be a takeover target (in full)?

Thanks

MS

 

[noirua]

Potentially this company could be huge i.e. major coal player!
Do you reckon that it will also be a takeover target (in full)?
Thanks
MS

Felix Resources is the most difficult of coal targets as former holders of White Mining stock have a 42% interest and AMCI have a 19.2% stake. White Mining shareholders have added about 2% to their holding in the last 2 years.

Any bid would have to be around $9-00 - $10.00 to have any chance of success. A cash bid would hit some hard, for capital gains tax reasons, with the stock up 17 - fold from its 2003 low.

 

[Reefer]

The tightness of the register also contributes to the volatility of FLX - goes down quickly but also rises quickly because there is not much stock available.
Plus there are not many opportunities to enter the Australian coal sector.
The September quarterly report blew me out of the water, and I thank the day management picked up White Mining and the Flannerys, as they have certainly turned this compnay into one of the major players.
Can't imagine what the figures will be like once the demurrage problems disappear, because we will experience a quantum lift in income once Newcastle port congestion is overcome, and the infrastructure to achieve that is currently being put in place.
As far as a takeover, evryone has their price, but it obviously could not be hostile.

 

[noirua]

Felix Resources have gone through the $7 barrier to trade at $7.07, up 26 cents. The bullish sentiment echoed by Felix MD, Mr Brian Flannery, on thermal, pci and semi-soft coking coal may have been the main factors. Others were the confidence in Cessnock and HarryBrandt.

 

[Reefer]

Or the Moolarben result Noirua?? We haven't seen any broker reports for some time but $7 was top of the range target price with Moolarben priced in, and the date to achieve $7 was still some time away. The quarterly's were certainly excellent and perhaps the instos are climbing on board, but Moolarben result must be announced soon.

 

[Reefer]

Up 37 cents with 15 minutes to close - this has gone feral today. Court case, takeover, re-rating??
Could be any one, or all.

 

[noirua]

With a lift to $7.35, up 23 cents this morning, it seems that there must be more in this uplift than meets the eye.
Market Cap has now reached $1.44 billion, up from $25 million in 2003.

We know that there is no chance of anyone else taking a major stake unless one of the former White Mining shareholders or AMCI accept an offer. (they together hold 62% of FLX stock)

 

[noirua]

Chairmans address by Mr Traver W Duncan and MD's report by Mr Brian Flannery, to shareholders at the Annual General Meeting that started a shortwhile ago: http://www.asx.com.au/asxpdf/20071026/pdf/315cqb5447jklw.pdf

 

[michael_selway]

With a lift to $7.35, up 23 cents this morning, it seems that there must be more in this uplift than meets the eye.
Market Cap has now reached $1.44 billion, up from $25 million in 2003.

We know that there is no chance of anyone else taking a major stake unless one of the former White Mining shareholders or AMCI accept an offer. (they together hold 62% of FLX stock)

The long "mine life" is very attractive with FLX

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.8 23.0 35.8 52.4
DPS 6.0 4.9 13.8 12.7

The strength of the low cost Moolarben open-cut mine is well known.

One of the most important factors is the Athena tenement that has 560 million tonnes of inferred thermal coal and FLX are at present working to raise this towards indicated status.
This future mine surrounds Minerva and can use the Minerva infrastructure and costs will be low to bring it into production. Coal quality is excellent and inline or better than Minerva.
Production could be raised to 10mtpa over time with a 40 to 50 year mine life.

Work is being carried out at the North Yarrabee Tenement where semi-anthracite and PCI coal has been drilled and confirmed at the same quality as the Yarrabee mine.

thx

MS

 

[noirua]

Felix stock is back on the move this morning having hit $7.29 again, up 20 cents.
Following the AGM and Quarterly Report, it is only the court case over Moolarben and sale of a further 10% of Moolarben, that results are awaited on.
Then should come the two analysts reports that remain outstanding.
Some still expect a bid for Felix, though I consider this very unlikely, as it could take at least $9 - $10.00 to be successful. Any bidder knows it could be a long drawn out affair and the major holders could ask for $12 - so only an outside speculation...

 

[Reefer]

Noirua, you will have to stop ramping this stock - it's up another 40c again this morning. Certainly something happening out there, whether tha association with WPG is starting to grab?

 

[noirua]

Noirua, you will have to stop ramping this stock - it's up another 40c again this morning. Certainly something happening out there, whether tha association with WPG is starting to grab?

Hi Reefer et al, As you said yourself, Felix are a tightly held stock and movements South or North can easily be exagerated. 62% with AMCI and Former White Mining shareholders, about 17% with UK, Irish and German shareholders, who rarely ever trade. They mostly hold shares direct with Felix Resources and not with nominees.

Many UK holders were sucked in on the LSE AIM market by the TV show "Show me the money" in 2,000. Quite a lot sold up at 93 cents in 2004 under the $500 rule. The former CEO of Felix Resources (Auiron Energy) in 2001 has said that well over 50% of shareholders came from the U.K., Ireland and Germany.

I only provide information about Felix Resources and have held stock since 1983. My holding represents 55% of my portfolio that is invested in shares. I hold 68% in cash and fixed interest bonds.
I only post the above to show the need to be careful when investing in high risk stocks in the coal and other commodity sectors.

 

[Reefer]

I have probably held from 1986 so also a long termer. Would have been a large percentage of my holdings at various times but I have sold down over the last year to enter other stocks. It is pleasing to see such a turn around for a company which promised so much in the 80's and 90's but was unable to get projects over the line. Purchasing Yarrabee with the remainder of the Aurion money was a brilliant move, and the further expansion into White Mining has turned this into a serious coal company. I no longer believe there is much risk in the stock, notwithstanding US corrections.

 

[Reefer]

So far today 200,000 shares traded over 352 trades, many parcels of 100 and less going though with a few larger ones interspersed, so perhaps many of the Europeans are taking profits, should clean up the register as willing buyers still around.