FLX - Felix Resources

Citi slapped a 11.10 target on FLX today.

Forecast EPS of over $1.50/share in 2009 and 2010 puts them on a PE of 5 to 5.5.

Felix reached $8.90 today, up 51 cents, just 3 cents short of their 7 year intraday closing high.

All a bit of a hope from two to four years away, but eventual production of 13 million tonnes (Felix 10.4 million tonnes attributable) per annum of thermal coal from the low cost Moolarben mines, at todays prices, makes possible profits make the mind boggle. Infact I'd prefer not to estimate if the price stays over US$100 per tonne.

Price of thermal coal could of course fall when new port extensions are completed in Eastern Australia and if a recession in America happens.

noirua said:

Felix reached $8.90 today, up 51 cents, just 3 cents short of their 7 year intraday closing high.

All a bit of a hope from two to four years away, but eventual production of 13 million tonnes (Felix 10.4 million tonnes attributable) per annum of thermal coal from the low cost Moolarben mines, at todays prices, makes possible profits make the mind boggle. Infact I'd prefer not to estimate if the price stays over US$100 per tonne.

Price of thermal coal could of course fall when new port extensions are completed in Eastern Australia and if a recession in America happens.

Click to expand...

Hi 10.4 mil pa is nice, but whats better is the 30+ year mine life at these levels!

Btw noirua, what other coal stocks do u have (if you dont mind me asking)?

thx

MS

FLX has been a great ride, which I'll keep travelling on.

But I like RSP even more, very surprised it hadn't poked into the low to mid high 3's with the recent price surge. Xstrata's bid has gone nowhere at 2.85

WHC worth a look as well.

michael_selway said:

Hi 10.4 mil pa is nice, but whats better is the 30+ year mine life at these levels!

Btw noirua, what other coal stocks do u have (if you dont mind me asking)?
thx MS

Click to expand...

It was good to see Felix hit an intraday high of $9.20 yesterday and close at $9.15, up 76 cents - prices not seen since 2000. A 24 year intraday high would need Felix to embrace $13.51 or around $65.00 for an all-time 38 year high.

Felix are starting to look further at their massive 5 billion tonnes low sulpur sub-bitumous coal, inferred resource, at Phillipson, S.A. The Alice Springs to Darwin rail link runs smack through the centre of it.

On coal stocks, I'm holding FLX, CEY, GCL, COK, PRC and WES. Showing green credentials with LNC.

RIV has been trading pretty strong although not as strong as FLX. However not many people mention it.....

noirua, since you are keeping an eye on the coal shares, have you ever encountered this share?

noirua said:

It was good to see Felix hit an intraday high of $9.20 yesterday and close at $9.15, up 76 cents - prices not seen since 2000. A 24 year intraday high would need Felix to embrace $13.51 or around $65.00 for an all-time 38 year high.

Felix are starting to look further at their massive 5 billion tonnes low sulpur sub-bitumous coal, inferred resource, at Phillipson, S.A. The Alice Springs to Darwin rail link runs smack through the centre of it.

On coal stocks, I'm holding FLX, CEY, GCL, COK, PRC and WES. Showing green credentials with LNC.

Click to expand...

Hm did FLX really reach an all time high of $38.00?

Btw they keep updating and upping the numbers

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.8 23.5 78.8 87.9
DPS 6.0 7.7 10.5 12.7

thx

MS

michael_selway said:

Hm did FLX really reach an all time high of $38.00?

Btw they keep updating and upping the numbers

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.8 23.5 78.8 87.9
DPS 6.0 7.7 10.5 12.7

thx

MS

Click to expand...

Hi m_s, Unfortunately, I bought 200 shares in Felix Resources - then Meekatharra Minerals - for $3.43 each and as we have had a 1 for 10 consolidation that equates to $34.30. I thought I was doing well by getting them well below their peak of $6.50 ($65.00). ( I can't of course remember the exact price at the peak but that was roughly it - the times when Central Pacific and Southern Pacific were top dogs in the oil from shale boom - Central Pacific peaked at around $90.00 in the Great Mining Boom and later slumped not far from zero. I think Central Pacific became part of Southern Pacific later.

The shale oil dream finally collapsed in December 2003, a very sad end: http://www.theage.com.au/articles/2003/12/02/1070351580970.html
Unfortunately the sad demise of "the rundle twins" and a fortune lost.

Unfortunately I destroyed all the weekly newsletters from those days, they would make interesting reading today.

noirua said:

Hi m_s, Unfortunately, I bought 200 shares in Felix Resources - then Meekatharra Minerals - for $3.43 each IN 1983 and as we have had a 1 for 10 consolidation that equates to $34.30. I thought I was doing well by getting them well below their peak of $6.50 ($65.00) IN 1982. ( I can't of course remember the exact price at the peak but that was roughly it - the times when Central Pacific and Southern Pacific were top dogs in the oil from shale boom - Central Pacific peaked at around $90.00 IN 1982 DURING the Great Coal and Shale Oil boom of the early 1980's, and later slumped not far from zero. I think Central Pacific became part of Southern Pacific later AFTER A TAKEOVER.)

The shale oil dream finally collapsed in December 2003, a very sad end: http://www.theage.com.au/articles/2003/12/02/1070351580970.html
Unfortunately the sad demise of "the rundle twins" and a fortune lost.

Unfortunately I destroyed all the weekly newsletters from 1971 TO 1983 , they would make interesting reading today.

Click to expand...

Added some dates above as that makes it easier to comprehend.
A posting on the UK's iii bulletin board says that Goldmans Tokyo have issued a buy not on Felix Resources. Not able to say what price etc was mentioned.

Some comment on Felix's returns in the last second quarterly statement: http://www.tradingmarkets.com/.site/news/Stock News/1042243/

Felix Resources continue their upward spiral to $9.87, up 61 cents, on the back of higher coal prices and forward earnings estimates from Citi.
Felix high for 2000 was $13.50 equivalent.

Quite a lot of importance is placed on the Half Yearly results out on 28th February.
There may be more on the court case, set for March, between Ulan Coal Pty and the (!st def.) NSW Government and (2nd def) Moolarben Coal Pty, over the land representing 20% of the Moolarben opencut mine, owned by Ulan.
Also, whether an agreement is in place for coal pricing at Yarrabee and Ashton from 1st April 08.
Coal sales out of Gladstone, from Minerva, are set to exceed 300,000 tonnes over the next month, priced at US$68 per tonne.

Felix Resources continue their relentless upward climb after reports of record thermal, PCI and semi-soft coal prices out of the Newcastle dock. Prices of thermal at over US$139 a tonne against prices fixed in 2007 at around US$55 per tonne.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ald__YXFuFs0&refer=home

Felix $10.24, up 34 cents after 2 hours trading.

noirua said:

Felix Resources continue their relentless upward climb after reports of record thermal, PCI and semi-soft coal prices out of the Newcastle dock. Prices of thermal at over US$139 a tonne against prices fixed in 2007 at around US$55 per tonne.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ald__YXFuFs0&refer=home

Felix $10.24, up 34 cents after 2 hours trading.

Click to expand...

Yep cant wait for half yearly! hopefully all good there

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.8 21.0 81.7 87.9
DPS 6.0 9.7 10.5 12.7

thx

MS

A video report from CNBC gives particular mention to Gloucester Coal and Felix Resources "Bullish on Coal": http://www.cnbc.com/id/15840232?video=641607231&play=1
Video is 12 days old.

Felix Resources are to enter the ASX 200 All Australian index after close of business on 28th February 2008.

michael_selway said:

Yep cant wait for half yearly! hopefully all good there
thx MS

Click to expand...

After looking at results from GCL and CEY in their half year reports, profits down, it will be interesting to see if Felix were able to increase profits as coal sales were up 23%, mostly in the first quarter; as sales were down 3% in the second quarter due to rail problems from Minerva and longwall changeover at Ashton.

Felix hit another 7-year-high at $10.31 today, up 46 cents. The Half Yearly Report is out this Thursday, and upgrades on resources at Ashton, Yarabbee and Minerva mines are expected. Agreement for prices on thermal coal from April 1st should be set at around US$100 per tonne for benchmark thermal coal.

Felix closed at $11.10, ahead of this Thursdays Half Yearly Report - a 29 fold increase since the 38 cent low in 2003.
Increases in spot thermal out of Newcastle at US$137 per tonne and RIO demanding a 143% lift in prices from April are principal factors here.

Half yearly's out and are up to expectations.

28 February 2008
Australian Securities Exchange
Company Announcements
Level 4
20 Bridge Street
Sydney NSW 2000
FELIX ANNOUNCES RECORD HALF YEAR PROFIT
Felix is pleased to advise shareholders that it has posted a record profit for the half year ending December 2007.
The result is a profit before tax of A$68.8 million made up of an $18.9 million operating profit and $49.9 million abnormal profit due to the payment by Sojitz of the second tranche of its Moolarben 10% purchase following grant of mining leases.
The directors are pleased to announce the payment for the first time of an interim dividend of 3 cents per share unfranked.
This result relates to a NPAT of $50.6 million although no tax is payable due to accumulated tax losses and R&D allowance.
The Managing Director of Felix, Brian Flannery, said the result is very pleasing despite some $4.5 million paid out in demurrage. We have also completed, this week, the sale of a further 10% of Moolarben to the “Korean Consortium” which was previously announced on 2 January 2008. This transaction will result in Felix receiving approximately A$90 million during February/March. We have also signed five coal supply contracts with Korean power companies for a total of 2.8mtpa commencing second half 2009. The contracts will be for the life of Moolarben and price negotiated each year.
By the end of March, Felix will be in a strong financial position with some $170 million in cash and a total bank debt of $96 million of which $57 million is non-recourse. The profit from the Korean transaction will be taken up in the second half and this combined with substantial coal price increases augers well for our full year profit.
Key highlights:
• Record before tax profit of $68.8 million
• First interim dividend paid by Felix of 3 cents per share unfranked
• Substantial cash reserves for Moolarben development
• Negative nett debt
• Strong increase in coal prices for 2008/2009
• 480,000 tonnes of thermal coal sales hedged for calendar 2009 at an average selling price of US$101.69/tonne
• Substantial increase in resources for Ashton open cut semi-soft coking coal and Yarrabee open cut PCI coal as per the attached statement
• Feasibility study for expanding Yarrabee PCI production including a small coal preparation plant documented for March/April board discussion.
• Minerva production YTD exceeds budget of 2.5mtpa despite wet weather delays
Felix Resources Limited ABN 75 000 754 174
Postal: PO BOX 10470 Brisbane Adelaide Street QLD 4000 Delivery: 316 Adelaide Street Brisbane QLD 4000 Australia
T (61-7) 3248 7900 F (61-7) 3211 7328 E admin@felixresources.com.au W www.felixresources.com.au
• Ashton longwall production slightly behind budget YTD due to a hard two metre vertical dyke encountered in centre of current panel. Expect another 7 weeks of lower retreat rates. Development of third panel well advanced.
• Additional exploration licences No. 7073 &7074 granted at Moolarben. Exploration to commence in next period over this 1145 hectares.
• New coal terminal at Newcastle (NCIG): under construction; dredging underway; shiploader under fabrication with delivery February 2009; stacker reclaimers under fabrication with delivery to site late 2008; and port commissioning early 2010
• Demurrage at Gladstone is decreasing although there are some delays with multi producer shipments which has a flow-on effect for Yarrabee shipments as Yarrabee customers tend to ship in multi producer shipments.
• Demurrage at Newcastle remains high and unacceptable even though the vessel queue reduced from 75 in July 2007 to around 30 in early 2008. Mr Greiner, previously Premier of New South Wales, chairing meetings of producers to attempt to find common ground to divide up the port capacity for 2008-2010.