IRN - Indophil Resources

[56gsa]

can someone explain to me why there are still sells on this at 1.18/1.20 when a new offer @ 1.28 cash has been announced this morning??

Mr Richard Laufmann, Managing Director & CEO of Indophil Resources NL
(Indophil), the Alsons Group (Alsons) and Hong Kong-based investment
banking group Crosby Capital Partners (Crosby) have agreed to make a
conditional cash takeover offer of A$1.28 (Offer Price) a share for the entire
issued share capital of Indophil (Offer).

 

[56gsa]

very strange - not sure what happened there but there was no trading halt, the news was out and still lots of sells there for under $1.28 - couldn't believe that such an opportunity would exist and therefore didn't buy in but first sale wasn't until 11am @ $1.39

did anyone else see this or was i dreaming?

actually LST was still selling at $1.84 until 10.30am so does loook like mr market was caught napping!! would have been a very handy trade ...

Obviously everyone thinks Xstrata will eat this new bid up with another offer - I'm sure they're prepared to go to $2 or more given the significance of Tampakan - MD of IRN obviously keen to bid up his own worth....

 

[AnDy62]

Up 20% today . Glad to be holding this, I saw it as a bit of a no-brainer. Interesting to see if Xstrata will come back with a new offer... It's been a nice ride so far.

 

[AnDy62]

Anyone on IRN at the moment? I think that there will be some more corporate activity in the next couple of weeks, well there has to be given the deadlines, whether it is good or not is another q.

 

[kenny]

Old news but useful to know.

XStrata pulling out of the Indophil bidding has benefited Lion Selection as well as itself with a revaluation by the market of its Tampakan copper/gold prospect in the Philippines.

http://www.businessspectator.com.au/bs.nsf/article/xstrata-pulls-out-hr287?opendocument&src=wdb

Cheers,

Kenny

 

[kirtdog]

lots of cash, no debt, very experienced heirarchy, possible takeover, low SP hovering around 0.3 for a few about a month now, a few big buyers recently, copper and gold prices an uncertainty :/, will be watching this one closely..

 

[Uncle Festivus]

Current price = 0.285c

As at 31 December 2008, Indophil held $76.5 million in cash
balances. The Company’s use of funds has been primarily to meet
Tampakan project study commitments. Further, in the current
global fnancial environment in which we all fnd ourselves,
Indophil is acutely mindful of the need to conserve cash to meet
its commitments to advancing the Tampakan project study process.
In this context, Indophil remains confdent of its cash position.
The current cash balance of $76.5m represents cash backing
of almost 20 cents per Indophil share.

It was a pity INDOPHIL's (ASX:IRN) announcement that the Tampakan copper-gold project in the Philippines was a world-class project coincided with another sharp fall in world copper price. But, then again, it also coincided with another rise in world gold price. Either way the market was not impressed and Indophil shares slipped 1c to 28.5c. The company announced that the preliminary findings of a near two-year Extended Pre-Feasibility Study (XPFS) into the viability of the Tampakan had confirmed it was a world-class, large-scale project. It was a 2.2 billion-tonne mineral resource base containing an estimated initial 1.4 billion tonnes of mill feed for life-of-mine average production of 325,000 tonnes a year of copper (contained in concentrate) peaking at more than 400,000; 310,000 ozs a year of gold; and still undefined, but significant production of molybdenum. ***** Indophil CEO and MD Richard Laufmann explained why the stock was under-appreciated. "These indicative findings confirm the world-class, long-life attributes of the Tampakan deposit. "In our view, Tampakan is one of the most attractive near-term new copper developments in the world," he said. "At Indophil's current share price, this values our stake in the project at around 0.4 of one US cent per pound of copper in the ground. "This is a fraction of the value historically ascribed to major copper deposit transactions, and is reinforced by the range of US5.5c to US6.0c per pound of copper placed on Indophil's stake in Tampakan by the independent expert in Indophil's 21 July 2008 Target's Statement. "The current valuation in relation to Indophil's share price is, by any measure, an extremely low figure," he said.

 

[Amor_Fati]

Big jump yesterday, more than 20%. Held on to most of it today, too. Response to ASX price query was merely to point out some fundamental strengths but these have been known for months, so what happened yesterday?

And well picked up Uncle Festivus, I saw that in the Annual Report too, I had to check my sums a couple of times because it seemed too good to be true!

I hold IRN.

 

[Sean K]

Big jump yesterday, more than 20%. Held on to most of it today, too. Response to ASX price query was merely to point out some fundamental strengths but these have been known for months, so what happened yesterday?

And well picked up Uncle Festivus, I saw that in the Annual Report too, I had to check my sums a couple of times because it seemed too good to be true!

I hold IRN.

Yes, wish I had have been watching more closely. Classic breakout and has followed through.

What's the latest with all the takeover and reverse takeover action?

 

[Amor_Fati]

Yes, wish I had have been watching more closely. Classic breakout and has followed through.

What's the latest with all the takeover and reverse takeover action?

I think the latest is that they are trying to sell their stake in Tampakan (which is 99% of the value of IRN) rather than be taken over as Lion Selection sold a large chunk (20% I think) of IRN to Xstrata, the larger partner in Tampakan, which destroyed that round of take-over speculation.

They come out of their trading halt tomorrow (Wed) to announce something about the extended pre feasability report which essentially means the auction is on in my understanding. The Chairman's address (only a week old) includes this:

"We are in a sound position to meet our Tampakan study commitments through to
finalisation of the Final Feasibility Study. With the completed XPFS we will be able to advise
potential buyers of the project scope, scale and economics. It is a requirement that Indophil,
Xstrata, Alsons and the original owners, the Tampakan Group of Companies, jointly sign
any confidentiality agreement that gives a third party access to any information relating to
Tampakan. We anticipate that we will be in a position to provide information by way of
access to a “data room” to a number of interested parties, and we are in the process of
completing confidentiality terms. It is not appropriate to name potentially interested parties,
or to forecast possible commercial terms or timing. " Italics added

So in summary I can't wait to see what unfolds over the next few months! It is hard to imagine matching the 1.28 that LST denied us; given the collapse of copper prices; but it could still be a good result.

 

[Sean K]

I think the latest is that they are trying to sell their stake in Tampakan (which is 99% of the value of IRN) rather than be taken over as Lion Selection sold a large chunk (20% I think) of IRN to Xstrata, the larger partner in Tampakan, which destroyed that round of take-over speculation.

OK, lets try and work out how much these might be worth ballpark. Or at least see how undervalued they might be. Lets accept that they are going to sell their stake in Tampakan. Need to know what they could be worth....


Shares on issue 400m x 35c = $140m mc, all on Tampakan.

Cash on hand about $70m, so their stake in Tampakan is valued at $70m.

Tampakan Resource contains 12.8Mt Cu, and 15.2Moz Au.

IRN have 34% of this, so:

4.35Mt of Cu
5.1m oz au


So, what are they going to get for this you reckon??

Is it going to be more than the $70m that we've identified as its current value?

Probably.

Guestimates?

 

[Sean K]

IRN looks like it broke that sidways move in early April on volume and has been consolidating for a few weeks. Looks to be coiling here, formed a nice triangle, and there's a pretty good chance for a break up you'd reckon.

 

[Sean K]

Just intraday but seems to breaking to the upside. Gives some credence to taking a position in these set ups early and then manage the trade closely with a stop to the downside and ride the break. Will probably die in the @rse now.

 

[Sean K]

Potential for another break up here for those with time on their hands and nothing better to do. Been a great performer since the break through 30c, but there's been a few!!

 

[Sean K]

Target reached from the initial triangle set up.

Some pretty text book TA examples here to watch for next time.

 

[banska bystrica]

The Chinese are looking for copper assets. This is one of the biggest (maybe the biggest) undeveloped copper/gold mines in the world. I bought 150K at 48.5c today. Fundamentally cheap, takeover offers last year at $1+. A put in the drawer job and wait for corporate activity.

 

[romeo]

thanks kennas for the simple and easy to read charts. As usual. I too wish I was watching this more closely.

 

[Sean K]

Seems to be breaking up again.

But,

50 firmed as significant resistance.

No brainer a few weeks ago.



Looking Cup and Handelish too.

 

[banska bystrica]

From ABN Amro:

"Tampakan . an undisputed Tier-1 project
Sagittarius Mines holds the FTAA covering Tampakan . a resource of 12.8Mt of copper and
15.2Moz of gold . on Mindanao, the Philippines. Xstrata plc, a major diversified mining
group, holds a 62.5% interest in Sagittarius. Indophil holds 34.23% and is acquiring the
balance of 3.27% from the Alsons Group, an affiliate of the Alcantara and Dominguez
families, both with strong commercial interests in Mindanao, and an IRN shareholder.

Valuing Tampakan in late 2008 . A$1.41 per share
The independent expert appointed by IRN evaluated 44Mtpa mine producing on average
300kt of copper and 320koz gold per year over a 25-year life, with a capital cost of US$3.9bn
and lowest-quartile cash costs. It generated a value of A$1.41-1.56 per IRN share, valuing
the measured and indicated resources between US5.5c and US6.0c/lb of copper equivalent
(at AUD/USD 0.9560). Xstrata.s subsequently released study incorporated an expansion to
66Mtpa with a final capital cost of US$5.2bn and a cash cost of US46c/lb Cu.

Stalemate or check mate, but not fool.s mate?
Xstrata offered A$1.00/IRN share in May 2008. In June a competing offer of A$1.28 was
made by a consortium including the Alsons Group. Subsequently Xstrata raised its bid to
A$1.28, but this bid lapsed. Soon after Xstrata moved to a 19.9% holding, which prevented
the competing bid reaching its minimum acceptance level (90%). In November, shareholders
voted overwhelmingly to give the IRN board the right to sell its interest in Sagittarius. Xstrata
claims to hold the marketing rights for Tampakan.s output, while IRN claims the right to
market its share of concentrate. This is a critical value point for any potential acquirer of IRN,
or its holding in Sagittarius. It remains untested in the courts.



The independent expert appointed by the IRN board in mid-2008 determined a mean
value of A$1.41 per IRN share, which we regard as the preferred valuation. Two
competing takeover bids were launched at A$1.28 per share. Subsequent to the
defeat of its bid for Indophil, Xstrata acquired a holding at A$1.17 per share to take
its holding to 19.9% and block the other bid. Given the opacity of the corporate
situation, we ceased coverage of IRN with a target price of A$1.00, given the overall
market sentiment, coupled with the increased difficulty in securing both debt and
equity finance for major resource-project developments, and in light of the changed
corporate situation for Indophil.
We retain our sum-of-the-parts valuation of A$1.41, in line with the independents
expert.s valuation, and our A$1.00 target price.
The risk of realising value for IRN shareholders lies with Indophil being able to either
finance or sell its interest in Sagittarius and the Tampakan development. The
development will be funded through Sagittarius. Assuming a 60/40 debt/equity ratio
. generous in this market . would require a capital commitment of US$2.1bn from
Sagittarius . US$1.4bn from Xstrata and US$700m from IRN. This would require a
highly dilutionary issue of capital by IRN to fund its obligation.
The board of IRN has the ability to sell the asset to any party at any price without the
approval of a further shareholders. meeting. The exception to this is a sale to Xstrata,
which would require shareholder approval on the basis of a related-party transaction.
Indophil has also received a preliminary tax ruling from the Filipino authorities
confirming that the sale could be taxed at lower than previously assumed rates."

 

[banska bystrica]

IRN is really start to firm up with sellers thinning out. It's having its second crack at 52c and if it breaks out above 52c, the stock will be off and running.
Bids last year at $1.28. Cheap as chips and the market is waking up from its slumber....finally.