GUL - Gullewa Limited

[The prophit]

I have been investigating this stock and think its well undervalued since the rise in price of Allegiance mining (AGM). It has a market cap of 10 mill at its current price of 7.9 cents. However according to the substantial shareholder shareholding notice on 12/1/06 they look to be holding 24,494,022 shares in AGM. This would amount to $18,370,516. The holding was shown on the half year accounts to be $10,439,997. This was in December 2006 when AGM was sitting at around 46-50 cents. The share as shown a small corresponding increase in relation to the rise in AGM.

 

[ta2693]

How much does gul worth?
My answer is at least 16.5 cents
According to AGM annual report http://www.allegiance-mining.com.au/docs/Annual_Reports/2007 04 19 Annual Report Final.pdf
gul has 20048632 shares, given agm worth 1.02 per share which is made up of 20549847.
Divided by the number of shares 125931551
Just this gives the value of gul to 0.163 cents

Not to mention it is got 1m cash, loyalty,real estate,a small IT subsidiary, etc.
If take all this into accout
It at least worth 0.18 cents

And all this is just NTA. No water, no assumption, no condition.

I do not get why anyone will sell it at 10 cents

 

[rub92me]

Well, it's really just a shell for AGM holdings. If they were to liquidate the AGM holding and return the proceeds (after 30% tax )to shareholders it would equate to a return of about 10 cents a share. I don't think they're about to do that though and they're not generating much else...

 

[ta2693]

Well, it's really just a shell for AGM holdings. If they were to liquidate the AGM holding and return the proceeds (after 30% tax )to shareholders it would equate to a return of about 10 cents a share. I don't think they're about to do that though and they're not generating much else...

this company do not need to pay tax on this capital gain.
first it already hold more than 1 year. than only 50% of gain are taxable.
second, It has heaps of capital loss from past can be used as tax offset.

 

[Dukey]

Interesting!!! seems to be jumping in the last few days...

two of GUL directors - Mr Lee and Mr Deitz are also directors of AGM.

... and I just put my last cash into NWE....

 

[rub92me]

this company do not need to pay tax on this capital gain.
first it already hold more than 1 year. than only 50% of gain are taxable.
second, It has heaps of capital loss from past can be used as tax offset.

??? GUL is a company, not an individual. Companies don't pay capital gains tax on investments as far as I'm aware. So they would pay 30% company tax on the profits generated from the sale wouldn't they?

 

[ta2693]

??? GUL is a company, not an individual. Companies don't pay capital gains tax on investments as far as I'm aware. So they would pay 30% company tax on the profits generated from the sale wouldn't they?

But it is allowed to balance the loss of past year first. As far as I know. Am I right? 100 words 100 words

 

[rub92me]

But it is allowed to balance the loss of past year first. As far as I know. Am I right?

You maybe right, I'm not an accountant. But if those losses are substantial, wouldn't that mean there would be even less to return to shareholders after that was deducted?

 

[ta2693]

Interesting!!! seems to be jumping in the last few days...

two of GUL directors - Mr Lee and Mr Deitz are also directors of AGM.

... and I just put my last cash into NWE....

Yes he is. He is also the major shareholder of GUL. I was planning to buy more than 50% shares of GUl, but find their holding in GUL makes my plan impossible.
In my opinion, GUL is better than AGM.
Because, if everything is good, Mr Deitz will hold AGM for you.
If the AGM is turning bad, Mr Deitz is definitely the first person who knows what happen. He will turn AGM into cash for you.
If AGM could make 1 bag this year, GUL also can. If AGM lose 1 bag this year, GUL probably will not, because Mr Deitz is in the best position to run faster and earlier than anyone.
Therefore GUL has same return as AGM, but less risk.

Does it make sense?

 

[ta2693]

If you agree GUL has same return as AGM but less risk.
than GUL should entitle more than its AGM holding which is 17c right now.(that is not ramping, the calculation is on my post above)
How much does this competitive edge should be valued?
Given it 10% of the NTA, say 1.7c it will make the GUL worth 18c
Given it 20% of the NTA, say 3.4c it will make The GUL worth 20.4c
Given it 30% of the NTA, say 5.1c it will make the GUL worth 22.1c

 

[Bushman]

Seems a good time to remember that GUL have 20m AGM shares plus $1.5m cash, a copper/nickel exploration licence, some property deals etc.

126m shares plus 45m option at 13.5 cps = $23m fully diluted.

20m AGM shares at $1 = $20m. Add cash of $1.4m and you get the remaining assets for free.

Now if Zinifex ups the bidding, this might be the smart way of gaining leverage to AGM. For instance, the GUL sp dropped to 11c at close yesterday which dropped it below it's NTA level. However blasted share price is up 20% today so it looks like the market has figured this out. So keep a close eye on how GUL is trading is my opinion and you might be able to pick up an easy 20% via arbitrage.

Flip side is obviously if ZFX withdraw their offer, GUL holders will go down with AGM.

2 of the GUL directors are also on the AGM board including Mr Deitz.

 

[Bushman]

Is it just me or is GUL trading below NTA per share?

At 11 cps, fully diluted market cap is $18.8m. However current market value of of 20m AGM shares (at $1.06) is $21.2m. There is also $1m + cash balance.

Maybe the market is valuing the AGM shares at the ZFX offer of 90 cps if they hold less than 30%. That or it is pricing in ZFX dropping the t/o offer.

Odd...

 

[Standrew]

GUL certainly is trading below NTA per share, but I believe that's about to change.

Have been researching GUL since ann re HGL's 9mill+ share purchase - HGL don't normally invest in shares in other companies. IMO HGL are up to something on the quiet - very savvy management (I own shares in both HRS & HGL and have now purchased GUL).

GUL has a 2328 sqk gold/copper tenement between Parkes & Narromine - they have started to explore. GUL indicated they will have 3 - 5 active projects within the next few months. GUL has engaged Ionex Pty Limited (a wholly owned subsidiary of Allegiance Mining NL) to utilise technology (CHIM), originally developed in the former Soviet Union and adapted to conform to unique Australian conditions by Dr Issai Goldberg for this program.
->http://espace.library.uq.edu.au/eserv/UQ:107702/ljr_phd_8_07a.pdf - it's a bit long and technical, but was very interested in the work done on the Lachlan Fold Belt, where GUL have their Gold/Copper tenements. Goldberg's CHIM technique starts on P124, Section 4.3.3, but the interesting bits start on P204

This geological map of australia ->http://www.ga.gov.au/image_cache/GA9226.pdf - gives you a good view of the Lachlan Fold Belt. You can see the Rio North Parkes and the Newcrest Mines at Cadia Hill & Ridgeway

David Dietz increased his holdings in GUL prior to ann of HGL's purchase.

GUL now has around $13mill cash in the bank after Zinifex t/o of AGM.

My thinking is that GUL and the Hudson group are looking at some sort of JV.

 

[trendster]

Great work, thanks for the information.
I held AGM shares before the takeover and have a small pot in GUL

Remember that David Dietz was on the board of AGM which was been taken over by Zinifex and now delisted he would have more time to concerntrate on GUL.

I also recall Dietz buying GUL shares at about 5.5 cents/ share so u know it's not going any lower than that. This director know's how much his company is worth and certainly bought at it's lowest.

 

[Standrew]

Thanks.

I also think that we will see the ex AGM CEO, Tony Howland Rose, coming on board GUL, now that he's out of a job. THR and Deitz are mates and were both directors at AGM. Probably a number of other key AGM people will follow. IMO they will make GUL the next AGM and somehow that includes the Hudson coys.

HGL bought the majority of their 9mill+ holding @ 11c. I bought mine @ 8.5c and topping up.

GUL reminds me of HRS/HGL when I bought them @ 12.5c & 3.5c respectively - very low key and very undervalued. That all changed very quickly when people realised the relationship with Tiaro Coal and the announcement of their bauxite HOA. The same will happen with GUL IMO.

 

[trendster]

GUL and HRS holding firm at the 7.5 c and 30c mark

I guess no one wants to sell, hope some positive annocements come from these 2 soon

 

[Standrew]

Trendsetter
Yes, people are holding - both still very cheap at the moment.

GUL commenced geochemical sampling survey on EL7022 earlier this year, so results shouldn't be far away.

In GUL's update (29 Feb 2008) they advised :

"Gullewa will focus on mineral opportunities first in Australia and then overseas."

"Gullewa intends to have 3 to 5 active exploration projects within the next 6 months"

So we should also get some ann on these new projects. Will be interesting to see where HRS/HGL fits into these.

Robin Bromby – The Australian - wrote in October 07 -
"Hudson Resources has been a low-key company, but watch out for announcements in coming months as it puts into place its new bauxite and zinc strategy. Its Tiaro coal project, near Bundaberg and a railway line, is likely to be moved into a separate IPO. – Robin Bromby – The Australian"

Tiaro (TCM) has come good, the bauxite deal has been announced (not sure if GUL is involved with this - I did read in an earlier ann that GUL had tenements is QLD and the 9+mill GUL shares purchased by HGL happened around the time the ann came out re bauxite deal) and the zinc strategy has yet to be revealed.

Interesting times for both coys

 

[Standrew]

GUL just anounced HOA entered into for NSW coal project, investing $1million to earn 80%. HGL became a major shareholder recently - I wonder how the Hudson group (HRS/HGL) will feature in this deal. They, of course, have interests in Vasse/Tiaro coal projects

 

[Standrew]

Following is an update on progress of GUL. Although they haven't mentioned location of coal tenements, my guess is around Inverell/Ashford.

DD has been stocking up on shares - see below.

Still have $10mil in the bank

Expect there will be action on this one in coming months

COAL
We expect a response from the New South Wales Department of Primary Industries will be received during the first quarter of 2009 on the application process for a coal exploration licence in New South Wales.

We have also received an invitation to participate in the tender process for 11 areas in New South Wales from the New South Wales Department of Primary Industries.

EL 2022 GOLD/COPPER
The analysis of the ground sampling programme has been received with a report being finalised to focus on prospective areas within the licence.

Gullewa director buys 74k shares
26 Nov 2008 8:36 PM

Gullewa director buys 20k shares
7 Nov 2008 4:18 PM

McNeil Nominees buys 3.9m Gullewa shares
7 Nov 2008 12:53 PM

David Deitz buys 4.9m Gullewa shares
4 Nov 2008 2:53 PM

Gullewa to apply for coal exploration licence
14 Jul 2008 9:19 AM

Gullewa director buys 1m shares
15 May 2008 9:47 AM

Hudson buys 9.3m Gullewa shares
7 May 2008 4:51 PM

McNeil Nominees buys 9.7m Gullewa shares
21 Apr 2008 5:47 PM