Kauri said:Can still remember his early foray into importing Lama's where eventually the investors as well as the Lama's were spitting.
Kauri said:Regardless, it is onwards and upwards
New Equity injection - would that usually mean drop in share price? (with options to compensate?). Of course takeover would more than compensate no doubt (?)Kauri said:fuelled rumours of an imminent deal yesterday by calling a trading halt ahead of an announcement on Monday.
......It was also suggested that Fortescue might be negotiating a new equity injection to counter delays and cost blow-outs at its $3.7 billion Pilbara iron ore project in the wake of cyclone George.
New Equity injection - would that usually mean drop in share price? (with options to compensate?). Of course takeover would more than compensate no doubt (?)
Thought for the day ..If there's a takeover, would it be fair to say "it's an ill wind that blows no good" ?
Have added to my ongoing long position.. possibly the start of the 5th leg?? (is this post 100 characters long, it must be now).
Have added to my ongoing long position.. possibly the start of the 5th leg?? (is this post 100 characters long, it must be now).
Iron ore baron Andrew Forrest became the State’s first triple billionaire yesterday, two months to the day after cyclone George tore through the Pilbara, killing two workers at a construction camp run by his company, Fortescue Metals Group.
The maverick mining entrepreneur achieved the milestone when shares in Fortescue touched a record $29.56, valuing his 102.3 million shares at a neat $3.02 billion, less than four years after he acquired them at just 8 ¢ each.
Incredibly, the one-time promoter of alpaca farming achieved the mark just eight weeks after becoming a double-billionaire in the immediate aftermath of cyclone George.
Shares in Fortescue, which is building a $3.7 billion iron ore venture that Mr Forrest believes can rival the giant Pilbara mines of BHP and Rio Tinto, have risen more than 20 per cent this week alone despite the controversy surrounding Fortescue’s decision not to evacuate its Pilbara sites before George’s arrival, and criticism of its subsequent handling of calls for compensation.
Investors have also seemingly ignored Fortescue’s warning that construction delays have pushed back its first iron ore exports from Port Hedland by at least six weeks to May next year.
Instead, they have been caught up in the takeover frenzy that has captivated investors as international miners battle for new sources of materials to feed China’s insatiable economy.
Fortescue initially plans to produce at least 45 million tonnes of iron ore a year but hopes to treble its output by early next decade, putting it on a neareven footing with BHP.
JOHN PHACEAS The West Australian
Have any of you guys read the Eureka Report article (subscribers only) by Charlie Aitken about Fortescue Metals?
In it he says this:
"Let’s assume Fortescue decides to go straight to production of 120 million tonnes a year. That decision needs to be made by August this year. That would require bond holder approval, which I suspect would occur. Fortescue keeps all the contractors on site, and they go for it. The 120mtpa scenario sees four berths, three shiploaders, 10 million tonnes of stockpiles at the port, a double train loop with 1x2 car unloader, and 1x4 car unloader. It's all additions to what will be existing infrastructure, and I think it's unrealistic to consider Fortescue producing 45 million tonnes a year. Under the expanded production scenario, it would be producing 120 million tonnes in 2011-12.
At a margin of $40 a tonne, 120mtpa means EBIT of $4.8 billion a year. Interest costs will be about $300 million assuming stage two is debt-funded. Deducting corporate tax of 30% leaves NPAT of $3.15 billion, earnings per share on the current capital base (264 million shares) of $11.90 a share.
No, that is not a typo. The scenario above sees Fortescue with 2011-12 earnings per share of $11.90, which puts the stock on a prospective 2011-12 price/earnings multiple today of 1.87 times. The stock will have a tonne of free cashflow, and should be able to maintain a 50% payout ratio. The dividend yield is potentially extremely attractive. "
Source: www.eurekareport.com.au
Thoughts?
There are 10 more trading days in May!!!
Kauri
You still on this one in your long term hold position??? If you are mate, you have nerves of steel, cause I think I would have cashed in today if I had been on it.
Cheers
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?