FLX - Felix Resources

Yes, it is still not clear for this dog,

My observation should be hold now for a moment.

Cheers

buttonzhu said:

Yes, it is still not clear for this dog,

My observation should be hold now for a moment.

Cheers

Click to expand...

buttonzhu,

Can you please add some detail to this post. Why do you think FLX is a hold for the moment? And to be honest I'm not sure that it qualifies as a dog, so maybe add some reasoning for that opinion as well.

This is a reminder to all posters that ASF expects a high standard of posting in the stock threads to keep the quality content up for the benefit of all users of the site. Posts like the above would normally be removed so to save wasting both your time and the mods time please try to add some useful content.

Thank you.

Felix stock continues in light trading today and no real sign of a breakout even though Macarthur Coal are moving on strongly. Continuing with my emails to several companies etc., about the takeover, and though I can't expect a reply as such, at least two are acknowledging receipt now and not ignoring me completely.
At least the coal sector is still recovering and hopefully Felix stock will breakout before 4th December, otherwise we're stuffed.
I notice, even among close contacts, a form of apathy everywhere and there are very few now bothering much. I'm keeping the faith about a counter bid coming, though there appears no sign of it so far in trading today.

Hi everyone, I received a phone call from Felix Resources today enquiring as to whether I had received the Scheme Booklet and whether I was going to vote for the Scheme on 8th December 2009. The poor feller got an ear full and he's probably just been roped in to phone, tough.
I don't know if they are getting worried or not. Could the director who resigned and two managers be wobbling a bit, if so, they count for nearly 18% of the vote and MD Mr Brian Flannery and co need 75%. Is it going to be a tight finish? I wonder; no more than that though.

I subscribe to this service, and Gue knows his onions. It's not a cheap service !!
I just thought his latest comments might make you consider how as shareholders, you may decide to vote on the 8th.
We vote against and the Bid may fail, but what would happen to the share price?
If Gue's opinion about coal prices and energy generally are correct, any downward blip in the FLX Price would be very temporary.
I intend to vote against the proposed Bid. I believe we are being sold seriously short, and the valuation anyway should be adjusted to allow for developments since the bid was announced.
My magnifying glass is on MCC and WEC, in case the Bid goes through.
Anyone else prepared to say whether they intend to accept?
PS Flannery hasn't asked me how I intend to vote, but of course he reads ASF!! Obviously he realises Noirua has serious clout !! Has your group met to decide your strategy yet, Noirua?
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From Elliott Gue.
"If the shouting heads of CNBC and Fox Business News knew everything, there’d be no need to read this.

But if you harbor a doubt or two about them, meet Elliott Gue, the man whose energy stock selections are up 44% since January (his aggressive holdings have soared 60%, beating the pants off the S&P nearly 2 to 1).

Now Mr. Gue is doing it again, calling for gut-punch increases in the prices of crude oil, uranium, coal and, most amazingly, natural gas ... and, in so doing, going against the so-called wise men. (Sorry, Maria Bartiromo. You, too.)

Not baby-step increases either. Crude oil ... back above $150. Uranium ... up 60% next year. Coal ... up double next year. And, most defiant of all, a 50% spike in gas prices in just a few months.

Perhaps you've not yet heard of either Mr. Gue or his organization, The Energy Society.

Just as well. Because the fact that Mr. Gue’s forecasts and analyses are known only to a select group of very wealthy investors is a very good thing from our point of view.

Since inception in 2005, members of The Energy Society have enjoyed an overall increase of 85% on their invested wealth.

I didn’t make that number up.

Indeed, none of what you are about to read is “made up.” It rests on bedrock fact, deep research and skull-busting analysis you cannot get any place but The Energy Society. Not from a hedge fund. Certainly not from a mutual fund. Not from Merrill Lynch, not from Schwab, not even from a private investment manager whom you’d pay tens of thousands of dollars. (A year, that is.)

Hi Quillan et al, I'm sure many will vote against the scheme on 8th December and probably just as many wont vote at all. The former White Mining shareholders hold the key to the outcome.

As you rightly say, Macarthur Coal shares have done well since the bid for Felix and also Whitehaven Coal. The key to how well this bid advantages Yanzhou is in the near 30% rise in the stock price to over US$20.00. It would seem fair if the Felix stock price rose as well and near everyone knows now that A$16.95 a share has become a very low offer indeed since August.

Will Deloitte raise their valuation of Felix Resources or withraw it?; will Yanzhou raise their offer for Felix Resources?; will Xstrata move in next week with a counter bid?; and will some former White Mining shareholders ask for more or vote against on 8th December?

Just sent to Brian Flannery.

Dear Brian, and your fellow Directors.
I guess you are pretty peeved right now.
It's always easy with hindsight to see when you have made a serious mistake.

To be fair to you, it may have been debatable to forecast the rise in the coal price 3 months later.

However, clearly Yanzhou could see the coal price was too cheap.
As could Elliott Gue at The Energy Society,
He has an awesome reputation in energy matters,
Perhaps had you subscribed to his services, you might have looked at the offer in a different light?

I expect you have already read my post on Aussie Stock Forums yesterday?
Certainly the Market realises you have been stitched up,and has raised the value of Yanzhou shares by nearly 30% since the bid.

I note you have asked Noirua how he intends to vote on the 8th December.Presumably therefore you are canvassing other shareholders. Is this permitted behaviour?

I feel miffed at being left out!!

It occurs to me that this could save your bacon, and the value of your investments in Felix.
If you can ascertain that more than 25% intend to vote against, you will be off the hook.
Felix will then be in play again, and we can flourish on our own, or entertain approaches nearer the real present and future value of our investment.

If Gue is right, that coal prices will double in the next year, you will all be hopping mad, along with the rest of your shareholders, if this bid succeeds.

I guess we will all be driven into the arms of MCC and others to enjoy the future investment value of coal.
However, I was delighted to see a trade in FLX of 1 milllion shares today. Someone substantial is buying. They might yet save your embarrassment, and your investment?

Don't get me wrong. All shareholders congratulate you on the wonderful job you have done in the past years to grow our investment.
But in horse racing parlance, it's a shame you fell at the last fence, when so far ahead of the field.

Best wishes,
John.

Another excellent letter Quillan and I feel, in his heart of hearts, that MD MR Brian Flannery would jump on to your bandwagon if he were not handcuffed to Yanzhou's.

Let's hope that 4 of the White Mining former shareholders back the rest of us in wanting an improved price from Yanzhou (through subsidiary Austar Coal Mine) in line with the increase in Yanzhou's share price, and that of Macarthur Coal and Whitehaven Coal since the offer made by Yanzhou of $16.95 in August. This would equate to about $22 per share for Felix Resources on the $16.95 bid and $20.20 0n the Felix price just after the bid was made in August.

I seem to feel, who knows, that Mr Flannery MAY think the Aussie Government and PRC will be very pleased with him, and maybe, just maybe, he'll be advanced by this. As well as pocketing some $500 million plus $29 million in dividends - well done Mr Flannery you've done very very well, for Mr Flannery. Please don't forget the small shareholders despite being handcuffed to Yanzhou's bid.

Many shareholders will be forced to pay capital gains tax, further reducing the value of their holding, when they are content to take the risks of this cyclical coal sector.

Next Tuesday is crunch day. Our Directors are locked into a decision which virtually disenfranchises us small shareholders, unless we can muster 25% to scupper the deal.

Market opinion has already been expressed. 3 months ago almost all Mining Correspondents put the fair value on Felix at about $24 a share. The Market said Felix was being stolen at $18, and promptly added 30% to the Yanzhou share price.

That was before the price of thermal coal increased nearly 20% which has not been reflected in any increased offer.

In effect you will be passing an extra $60 million in profits pa to Yanzhou shareholders, without so much as a murmur.
That means principally to the Chinese Government.

The Chinese must think the OZ investors are easy meat !!
[I speak as a European investor in Felix.]
I am reminded of a pack of hyenas laughing, before they rip up the carcass.
They tried to steal Rio Tinto from you, then thought they could complete their stranglehold on Rare Earths, by acquiring Lynas.

Already all future battery and electronic producers will be forced to manufacture in China, as China has over 95% of world reserves. Not content with that, they are pursuing a policy of driving out all competition, which could have very serious National Security consequences for all Western countries.

They are rigorously applying a policy to get their hands on virtually all of Africa's natural resources.

CAN'T YOU SEE WHAT IS GOING ON?

Whilst Felix shareholders cannot stop this inexorable march by themselves, we can do our bit by keeping Felix in Australian investors' hands, which in my opinion will be in all our own best interests anyway.

Many are forecasting 50%--100% rise in coal prices and other commodities in 2010, with China and the other BRIC economies forging ahead, showing GDP increases of up to 10%.

The Chinese are desperately seeking to tie up coal supplies everywhere. Hardly surprising since they are completing ONE NEW COAL FIRED POWER STATION EVERY WEEK !!
So our Directors intend to hand our resources to China on a plate !!

One day you will all have to answer the question:
"WHAT DID YOU DO WHEN THE CHINESE INVADED OUR COUNTRY, DADDY?"
After you have paid your GainsTaxes on your profits and then seen the price of coal rocket next year, you might regret not putting up a fight to keep our Company in our hands.
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If you will pass this opinion on to all the Mining Correspondents you can contact, there is still time in this weekend's Press for the decision on Tuesday to be influenced by right-thinking Australians, including BHP perhaps?
That is, unless you independent shareholders decide to vote with the sheeple?

Brispot Nominees Pty Ltd, House Head Nominee No1 A/C have noted an increase (source Felix Resources website) from 608,966 shares to 6,387,746 shares in the last quarter to 30th November.

Interesting to see the presentation posted today.. Brian Flannery busy talking up Felix to US investors. Why would you for a "sold" company? So much for not "soliciting" other offers, he's just being more surreptitious about it

Quillan: I somewhat agree with what you are saying, but not sure the absolute maliciousness of the Chinese -- they are really protecting their own interests to protect their future growth, as does the US with their Middle East actions, etc. I don't blame them too much for looking a decade ahead, whereas our leaders are too busy thinking about the next 3 years only.

What pisses me off however, is while they can buy our companies quite easily, the door only swings one way. They get angered if when we block such moves, however can an Australian company (or any foreign company for that matter) buy into Chinese firm? Not a chance in hell! That is the stupid thing I find about the whole issue here with Chinese takeovers. They have absolutely no right to be frustrated if we simply say "no".

Yes, the presentation appeared unneeded unless the Felix directors have got wind of the fact that there is at least one interested party waiting out there needing this information to counter bid by the latest, Monday 7th December.

If there is still someone buying stock in the market then they have done brilliantly. Not many hints and just taking their time - maybe that is.

+++++++

If anyone visits: ASF are looking for support and your vote at: http://www.thebull.com.au/the_stockies_list.php?c=Forums

gfresh: Malice was never suggested by me. They are extremely intelligent, hard-headed businessmen. They seem to run rings around western businesses wherever they meet.

Our Board of Directors imply that we are getting a good deal as the price was well below the Yanzhou offer price beforehand.

Even Deloitte try to use this as an aspect of valuation. They also implied at the time of their valuation that because there had been no counter offer, the Yanzhou offer fully valued Felix.

This was a monstrous distortion of the facts. Until Yanzhou's bid had been cleared, there was no possibility of any other bids.
.
I thought Deloitte were meant to be acting in the interests of the Felix shareholders?

We paid their bill, didn't we?

If it was a fair valuation at that time,which was disputed by almost all the Mining Press, then the fact that coal prices have increased considerably since, and the consensus is that they will continue to appreciate, surely proves Deloitte might just as well have been working for Yanzhou?
With whatever respect is due to them, that is no way to value assets.

Similarly the individual Board members, some collecting $500m plus, may well say amongst themselves, "That's enough for us. Thanks very much".
That attitude, if it is a fair comment, is no way to decide the value of Felix.

Deloitte's valuation is a meaningless sham, since they are paid by Felix to agree that it is a fair bid. A nice little earner for doing what?

If there is no higher offer by next Monday, we must assume that BHP and Xtrata either cannot afford it, or think there are better fish to fry.

If the thermal and the semi-coking prices are 50% higher in 12 months' time, those shareholders who vote against the Resolution, will have every right to be as mad as hell.
Saying "I told you so" will be no consolation for having our pockets picked.

I have only just read Flannery's 45 page glossy PDF praising the achievements of the Board, and the GLITTERING prospects for the future of the Company.
This takes no account of the probable rise in all commodity prices in the next 12 months, WITH COAL PRICES FORECAST TO DOUBLE BY ONE RESPECTED US ANALYST.
Had they employed Deloitte to put forward a really strong defence AGAINST A HOSTILE BID, they could hardly have done a better job !!!
Flannery and the Board are shouting loud and clear, as I see it, that they realise they have made a horrendous mistake, and have really let the small shareholders down by underselling the Company.
Why else produce this Report at the last minute, if they really think the bid price values our assets fairly?
They seem to be imploring all the uncommitted shareholders to vote against the Resolution, short of actually breaking their commitment to stay silent !!
I suggest we listen to Flannery's silent plea, AND ALL VOTE AGAINST THE RESOLUTION !!
We still own Felix. Let's protect our investment and send the Chinese packing!!
IT'S NOT TOO LATE !
I SAY AGAIN, CONTACT ALL THE MEDIA OUTLETS YOU CAN, SO THEY CAN RUN A STORY THIS WEEKEND.

I understand that foreign investors who hold shares with a stockbroker have not received the Scheme Booklet and most may not be aware of their right to vote at the meeting on 8th December. Friday 4th December 7.30pm Sydney time is the last chance to vote by proxy - not long to go.

I am at present in contact with Deloitte Touche Tohmatsu to try to persuade them to issue a supplementary IER. At present they admit to not being aware of these forgotten assets and PT Krakatau's pending legal action over S.A.S.E. Felix in reply to Deloitte say that the Additional matters are immaterial to the financial position of Felix.
I'm trying to persuade Deloitte that the iron ore royalties over future iron ore production from Hawks Nest are material. Production over time is between 550 and 800 million tonnes and royalties are $1 per tonne. The area is within the Woomera protection zone.
The Way Linggo gold royalties are worth A$4.5 million on current exploration. Kingrose Mining are exploring for further gold in good prospective areas.

It has been confirmed by Deloitte that Flinders Power Partnership still have rights over Ingomar Trial Pit and other tenements in the Phillipson Tenement until May 2010. This is part of South Australian Coal SAC recently an ex-species dividend to Felix Resources shareholders.

I understood that the online voting (investorvote.com) closes at 4pm today. Anyway, our 4000 have voted against.

fairlight

Letter received by me from Deloitte - Deloitte Touche Tohmatsu on 3rd December 2009. (personal detail and references omitted - marked between ' ' added by me)

I would first respect Deloitte for replying honestly as others failed to do so.

Re: Felix Independent Expert Report 'IER'
I refer to your email to the complaints Officer on 24 November 2009 regarding the Independent Expert's Report for Felix Resources Limited (Felix) prepared by Deloitte Corporate Finance Limited (Deloitte) and dated 30 September 2009 (the IER).

In accordance with our Complaints Management Policy, the matters you raised have been investigated and our response is set out below.

A number of interests and contingent liabilities you suggest have been overlooked by Deloitte in estimating the value of Felix in preparing the IER. These interests and liabilities are summarised below:

1. Royalties over iron ore production from Western Plains Resources Limited's (WPG) Hawks Nest tenement in South Australia (Hawks Nest)

2. Royalties over gold production from Kingrose Mining Limited's (Kingrose) Way Linggo Project in Sumatre.

3. A legal claim by PT Krakatau Steel (PTKS) against Felix, SASE Limited (SASE) (owned by Felix (90%), Ausmelt Limited (Ausmelt) (5%) and PTKS (5%)) and Ausmelt

4. The rights of the Flinders Power Partnership (Flinders) over the Ingomar Trial pit until May 2010 'now part of SAC which was issued to Felix shareholders by an in-species dividend'

5. Felix's 21.5% interest in (ADC) and the former pig iron demonstration plant near Whyalla

(together the Additional matters).

We were not aware of the Additional Matters at the time of preparing the IER.

We have raised the Additional Matters with Felix who advised us that the Additional Matters are immaterial to the financial position of Felix. We have considered the Additional matters in light of the IER and we have concluded that they are immaterial, individually and in aggregate, to the estimate of the value of Felix and to the conclusions in the IER.

Accordingly, we do not think it necessary for Deloitte to amend the IER or issue a Supplement IER.

Yours faithfully - Marisa Orbea Partner

As a final skirmish in this battle to prove the true value of Felix Resources I have sent final emails to 'Deloitte' and a few others.

These two emails outline the value particularly of the royalties in iron ore sold from the Hawks Nest Iron Ore tenement in South Australia, thought to be A$1 per tonne. From the link below it can be seen that the area holds a minimum of 500 million tonnes and is expected to be higher than this. There is risk and the time factor involved but these sums can be seen as substantial.
http://www.westernplainsresources.com.au

The second email concerns gold from the Kingrose Mining's Way Linggo gold project in Sumatre. The first six years royalties are likely to total A$4.5 million with further exploration underway.
http://www.siteground224.com/~simonhic/krm/

http://www.siteground224.com/~simonhic/krm/way-linggo.php

Yanzhou Bid For FLX

What do you think will happen? Afterall, the offer is for only $16.95 per share, pretty much what it's been trading for over the past 4 months.

Re: Yanzhou Bid For FLX

Aussiest said:

What do you think will happen? Afterall, the offer is for only $16.95 per share, pretty much what it's been trading for over the past 4 months.

Click to expand...

The shares as you say Aussiest have traded fairly flat since mid-August. This was not helped by FIRB's onerous conditions on the Chinese as other foreign companies would have seen they would also have conditions put on them.
This left only Xstrata with their adjoined Ulan mine next to Felix's and two other mines not far from Felix's Ashton Mine in the Hunter, as they have synergy gains despite being an Anglo Swiss company - so far they've not indicated they will bid and Monday is the last day.

There is a slight chance that Austar Coal Mine will up their bid price on Monday. Yanzhou, parent of Austar, has seen their shares rise by 35% during the period that Felix's price fell 3%. Much of the gain appears to be seen in the future growth of felix Resources Moolarben project and tenements at Wilpeena and Athena.

The SCHEME vote is at 10am on Tuesday next and if 75% vote in favour the matter goes to Court on Thursday next. At that point Felix Resources would be a 100% owned subsidiary of Yanzhou Coal. Shareholders will be paid A$16.95 a share on 23rd December 2009.

There is a slight possibility of an appeal to the Supreme Court. There may also be a claim for extra cash for assets that were forgotten by the Directors of Felix Resources, or alleged as knowingly forgotten. [Deloitte have said they were unaware of the assets when making their valuation of Felix]