LNC - Linc Energy

bluekat said:

Maybe, just maybe, LNC should consider mining the coal it cannot sell as a total asset sale. Better to have some positive cash flow rather than the ongoing negative.

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Apart from the fact that huge Capex would be required to mine the coal, various LINC people have stated that P Bond would rather retain the asset than sell for a Billion $ + less than it's worth, especially when coal is appreciating in value.

One such occasion was Justyn Peters at the Melbourne Limelight Series on June 4.
http://www.brr.com.au/event/66149/the-power-of-underground-coal-gasification?popup=true&wl=76

Miner said:

Welcome InvestaNoob to ASF and for your first posting.
Probably the CEO of LNC Mr Bond has already created so much of hype that this little news from AFC trial did not excite the investors or traders.

DNH

Cheers

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Thanks for the warm welcome Miner. I agree that sometimes the hype can overshadow the true potential and create a 'boy who cried wolf' syndrome. Regardless, I'm looking at ten years from now, and visualising the big smile on my face. The world needs this technology to be commercialised in my opinion.

adani enterprises to buy $1 bn coal mine

Ka-ching! Could the sale be finally happening?

http://economictimes.indiatimes.com/videoshow/6163242.cms

Well maybe the ship has come in or... whatever. Certainly a very big spike in LNC on The Economist story and the subsequent response from the company.

By the way if you havn't yet listened to the Justyn Peters presentation from the limelight series( as mentioned previously) it is really worth close attention.

http://www.brr.com.au/event/66149/th...pup=true&wl=76

Disclosure. I hold and have increased my exposure to LINC

I used to be a regular contributor to this thread and I must admit that Linc has been very good to me. I pulled in about $50.000 trading on its ups and downs. It was extremely sensitive to good and bad news. Most of the good news was only spin, but it worked.

At one stage I held about 100 thousand shares and I was lucky to to get out at the right time, at a stage where I had a lot of capital losses to partially off-set the capital gains.

* Adani Enterprises
* Linc Energy

Coal
Gautam Adani’s Adani Enterprises is close to acquiring a coal mine for $1 billion in Queensland, Australia from Linc Energy, two independent sources close to the development said. The coal block is expected to have reserves of 7-8 billion tones.

The acquisition is under Adani Enterprises’ subsidiary, Singapore based Adani Global. Out of the $1 bn, Adani is expected to give the first tranche of $435 mn in the next few days. The rest of the payment will be made over the next few months.

Sources said, Adani Enterprises will invest in the project and aims to produce over 50 million tones of coal in the next 3-4 years.

Sources said the final announcement of the deal is expected by the middle of the next month. Adani Enterprises declined to comment on the development.

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http://www.24dunia.com/english-news...-1-bn-coal-mine-from-Linc-Energy/6650874.html

It's great news of course but it is certainly playing havoc with the protocols of reporting to the market.

The acquisition is under Adani Enterprises’ subsidiary, Singapore based Adani Global. Out of the $1 bn, Adani is expected to give the first tranche of $435 mn in the next few days. The rest of the payment will be made over the next few months......

Sources said the final announcement of the deal is expected by the middle of the next month.

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Does this seem a bit odd? Coming up with $400 m plus on a deal that will only be confirmed in the marketplace a month later? How could a company keep a financial transaction that big secret for any length of time let alone a month ?

Any thoughts ?

basilio said:

Does this seem a bit odd? Coming up with $400 m plus on a deal that will only be confirmed in the marketplace a month later? How could a company keep a financial transaction that big secret for any length of time let alone a month ?

Any thoughts ?

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Perhaps "the final announcement of the deal is expected by the middle of the next month" is the approval by the FIRB.

The Indian article rings true with me as LNC people have said on more than one occasion that they won't be making any MOU announcements on Coal Tenement Sales. Instead, they will make an announcement only when a substancial deposit has been banked.

Perhaps the big announcement will be made after close of business Friday, so the momentum can build over the weekend in the media.


I have held LNC for over 2 years and also recently increased my holding.

By Ross Kelly

Of DOW JONES NEWSWIRES


SYDNEY (Dow Jones)--Linc Energy Ltd. (LNC.AU) Chief Executive Peter Bond said Wednesday that India's Adani Enterprises Ltd. (512599.BY) is interested in buying one of the company's Queensland coal properties, which Linc has recently valued at over A$1 billion.

"I can tell you we are talking to Adani and we are deep in negotiations with them," Bond told Dow Jones Newswires.

"We are taking to a few other groups on that asset, of which Adani are one of the leading groups," he added.

Bond's comments confirm an Indian media report early Wednesday that suggested Linc is poised to sell Adani a coal property for about US$1 billion.

Linc shares soared 31% to A$1.38 on Wednesday, giving the Brisbane-based company a market value of about A$675 million, as the report sparked fresh hope that Linc will finally sell its non-core assets after two previous deals with Chinese companies collapsed at the last hurdle. Bond's confirmation that Linc is talking to Adani came after the market closed.

Resurgent interest in the assets isn't entirely surprising, given sustained Asian demand for coal, which triggered last year's Chinese takeover of Felix Resources Ltd. and this month's offer by Thai miner Banpu PCL (BANPU.TH) for Centennial Coal Co. (CEY.AU).

According to data from Dealogic, Australian coal assets have attracted takeover offers worth US$6.6 billion in the January-June period. That's higher than the total value of transactions completed in any of the previous four years.

As one of the world's fastest growing economies, India currently has to import coal because it doesn't produce enough to meet increasing demand.

The need to source more foreign coal is urgent and a failure to do so could impact the country's economic growth, Coal India Chairman Partha S Bhattacharya told journalists during a visit to Australia last September.

India aims to increase annual additions to power generation capacity fourfold over the next few years to 13,000 megawatts each year from around 3,500 MW a year recently, to provide electricity to millions of rural households and eliminate frequent blackouts.

Citing two "independent" sources close to the deal, India's The Economic Times said Adani is expected to make an initial upfront payment to Linc of US$435 million in the next few days, with the rest of the US$1 billion to come over the next few months.

Linc said last month that it had received a number of "written indicative" offers for all three coal properties: Emerald, Galilee and Pentland.

Bond didn't provide more details on the progress of the discussions, although he did confirm that Adani is interested in the Galilee block.

Negotiations with other parties are continuing over the other two blocks, he said.

Last November, Linc said the Galilee block could contain 7.8 billion metric tons of thermal coal. Emerald contains a mix of thermal and semi-soft coking coal and the smallest asset, Pentland, contains thermal coal.

"Linc Energy confirms that at this stage it has not concluded any binding contract or finalized any material terms with any party," the company said in a statement Wednesday.

Any news on the sales has been met with a healthy degree of investor skepticism, given Linc's failed attempt to sell the Emerald tenement to China's Xinwen Mining Group for A$1.5 billion and all three properties to Yanzhou Coal Mining Co. (1171.HK).

Linc wants to sell the assets so it can focus on its coal-to-liquids fuel business, which it recently moved to South Australia state. It still has a demonstration plant operating at Chinchilla in Queensland state.


-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692 ; Ross.Kelly@dowjones.com


Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=o9xWfAoRj7j+BqGYawZ9qA==. You can use this link on the day this article is published and the following day.



(END) Dow Jones Newswires

July 14, 2010 03:27 ET (07:27 GMT)

Calliope said:

I used to be a regular contributor to this thread and I must admit that Linc has been very good to me. I pulled in about $50.000 trading on its ups and downs. It was extremely sensitive to good and bad news. Most of the good news was only spin, but it worked.

At one stage I held about 100 thousand shares and I was lucky to to get out at the right time, at a stage where I had a lot of capital losses to partially off-set the capital gains.

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Sounds like me. Sold 60% of my holding at $3.50. Did not get the top, but have to be happy with that. Still hold the balance as I like Linc. I will be pleased when the day comes that they have some money in the bank.

I used to post on this thread when there was mainly just me. I enjoy reading all of those who post now though as it saves me some time so I can research other stocks.

Further to my last post #1225 regarding the Coal Sale story (rumour), what doesn't ring true is the sale price of $1 Billion (US). I would have thought that P Bond would hold out for much more than $1 Billion for a coal deposit of around 8 Billion tonnes.

Still, $US 1 Billion will be very welcome and enough to set up the 1st 20,000 bpd GTL facility. Once the sale is confirmed, the updated Analysts Reports on the profitability of the GTL facility should make very interesting ($$$) reading.

Further to my last post #1225 regarding the Coal Sale story (rumour), what doesn't ring true is the sale price of $1 Billion (US). I would have thought that P Bond would hold out for much more than $1 Billion for a coal deposit of around 8 Billion tonnes.

Still, $US 1 Billion will be very welcome and enough to set up the 1st 20,000 bpd GTL facility. Once the sale is confirmed, the updated Analysts Reports on the profitability of the GTL facility should make very interesting ($$$) reading.

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In a financial market that is still deeply concerned about keeping the balls in the air it would make very good sense to take $1bn for Galilee with a very substantial upfront figure. The GTL technology is being optimized; the plant designs are close to finished ; appropriate staff are coming onboard. Time to start working before other energy companies steal a march.

And of course there are still 2 other coal deposits to sell and there is nothing like the imminent sale of one of the packages to focus other buyers attention on the remaining mines.

It will be interesting to see how the market reacts to this twilight zone between leakage of the alleged first coal sale and final formal confirmation. Two years of broken promises have taken their toll on investors confidence in LINC's coal sale statements. Which of course is why LINC management wants this deal absolutely sealed and delivered before announcing it.

The Indian enterprise "Adani Group" is the company rumored to be buying Linc's Galilee coal deposit.

They have also recently been given the rights to assess the viability of new coal export infrastructure at Dudgeon Point near Mackay (adjacent to Hay Point and Dalrymple Bay coal ports) by a Qld Govt owned authority.

http://www.couriermail.com.au/busin...-queensland-coal/story-e6freqmx-1225890924715

Other stories in the Indian Economic Times report that Adani have a private port on the west coast of India and are looking to establish another port on the east coast of India. Also that they are developing a power station.

http://economictimes.indiatimes.com/quickiearticleshow/4829236.cms

http://economictimes.indiatimes.com/articleshow/5942536.cms

Looks like they are setting up a fully intregrated enterprise.

Any news that moves the share price positively has got to be good but I am dubious about this one. The Adani sale price reported is $1 billion (which like you guys I assume is USD so AUD 1.1349 billion) for Galilee.

Back in Sep 2008, Linc were offered AUD 1.5 billion for Emerald which is the mid size of the 3 tenements for sale (taken from http://www.lincenergy.com.au/pdf/analyst-22.pdf). Galilee is considerably larger than Emerald (like more than 9x in terms of pure tonnage):-

Galilee: 7.8 Billion Tonnes
Emerald (Teresa): 852 Million Tonnes Inferred
Pentland: 266 Million Tonnes Inferred

Since September 2008 and the original offer from Xinwen the thermal coal rice has dropped 35% (see http://www.indexmundi.com/commodities/?commodity=coal-australian&months=60. However the JORC resource at Emerald has been increased significantly which to me implies the value for Emerald should be similar. Maybe the Adani report is refering to Emerald and not Galilee??

Also, If you listen to the limelight piece http://www.brr.com.au/event/66149/th...pup=true&wl=76 Justin Peters appologises for the delay in the coal sale but implies it has added AUD 1 billion to the sale price so has been justified.

Reading between those lines it would suggest to me a final sale price for all 3 of AUD 2.5 billion (AUD 1.5 billion + 1 billion)....

I just hope they sort things soon as these markets are incredibly skittish and very worrying to be sat in.

FYI: I am a long term Linc investor and have also increasd my holdings significantly in recent weeks.

That was certainly a cautious approach today to the twilight zone.

After a first rush basically the sellers kept up with any one who wanted to buy. I wouldn't have thought now was the time to sell Linc shares.

I feel surprised but 2 years of missed deadlines on coal sales has obviously burnt many, many people.

luckypaul said:

Any news that moves the share price positively has got to be good but I am dubious about this one. The Adani sale price reported is $1 billion (which like you guys I assume is USD so AUD 1.1349 billion) for Galilee.

Back in Sep 2008, Linc were offered AUD 1.5 billion for Emerald which is the mid size of the 3 tenements for sale (taken from http://www.lincenergy.com.au/pdf/analyst-22.pdf). Galilee is considerably larger than Emerald (like more than 9x in terms of pure tonnage):-

Galilee: 7.8 Billion Tonnes
Emerald (Teresa): 852 Million Tonnes Inferred
Pentland: 266 Million Tonnes Inferred

Since September 2008 and the original offer from Xinwen the thermal coal rice has dropped 35% (see http://www.indexmundi.com/commodities/?commodity=coal-australian&months=60. However the JORC resource at Emerald has been increased significantly which to me implies the value for Emerald should be similar. Maybe the Adani report is refering to Emerald and not Galilee??

Also, If you listen to the limelight piece http://www.brr.com.au/event/66149/th...pup=true&wl=76 Justin Peters appologises for the delay in the coal sale but implies it has added AUD 1 billion to the sale price so has been justified.

Reading between those lines it would suggest to me a final sale price for all 3 of AUD 2.5 billion (AUD 1.5 billion + 1 billion)....

I just hope they sort things soon as these markets are incredibly skittish and very worrying to be sat in.

FYI: I am a long term Linc investor and have also increasd my holdings significantly in recent weeks.

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From post #1226 above-
"Linc said last month that it had received a number of "written indicative" offers for all three coal properties: Emerald, Galilee and Pentland.

Bond didn't provide more details on the progress of the discussions, although he did confirm that Adani is interested in the Galilee block.

Negotiations with other parties are continuing over the other two blocks, he said.

Last November, Linc said the Galilee block could contain 7.8 billion metric tons of thermal coal. Emerald contains a mix of thermal and semi-soft coking coal and the smallest asset, Pentland, contains thermal coal."

So it is definitely the Galilee block that Adani is looking at. That is why I am surprised that the S/P is only US$1 Billion.

So it is definitely the Galilee block that Adani is looking at. That is why I am surprised that the S/P is only US$1 Billion.

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Pure speculation of course but I wonder if Linc will take a tonnage royalty from sale of the Galilee block ? They could decide to take a somewhat lower price, insist on a substantial deposit and payment of the rest of the funds quickly and then ask for an ongoing royalty to compensate for the lower initial price. After all Linc's prime interest is get cash quickly to kick off the rest of the projects.

1 billion is a pretty good price.
The Galilee basin is years off producing as there is no infrastructure in place.
Rail, new expansion at Abbot Point and so on. Massive, massive project!
Teresa is near existing infrastructure and has semi soft coke. So still very attractive!

basilio said:

Pure speculation of course but I wonder if Linc will take a tonnage royalty from sale of the Galilee block ? They could decide to take a somewhat lower price, insist on a substantial deposit and payment of the rest of the funds quickly and then ask for an ongoing royalty to compensate for the lower initial price. After all Linc's prime interest is get cash quickly to kick off the rest of the projects.

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That is a real possibility, Basilio. I recall that LNC mentioned that they may do that with the smaller Richmond block, and considering the huge infrastructure expenditure required to get the coal shipped out, it makes sense and could be a deal maker. It also could satisify P Bond's determination to obtain full value from the sale of assets.

Trading halt on CXY. Here is the request to the ASX-

"Trading Halt Request
Cougar Energy Limited (ASX code: CXY) hereby requests a trading halt be placed on its quoted fully
paid ordinary shares effective immediately, pursuant to listing rule 17.1.
The Company has received an order from the Queensland Department of Environment and Resource
Management (DERM) to keep the Company’s pilot Underground Coal Gasification plant near Kingaroy
closed until the Queensland Government is assured that groundwater resources are protected.
The Company expects the trading halt to last until the earlier of an announcement by the Company or
the commencement of normal trading on 20 July 2010.
The Company is not aware of any reason why the trading halt should not be granted."

This reinforces what LNC's Justyn Peters stated in his Limelight address in Melbourne on June 4- that only LNC has mastered the drilling, burning and extinguishing the burn, and ground water issues, among the UCG operators in Australia.

http://www.brr.com.au/event/66149/the-power-of-underground-coal-gasification?popup=true&wl=76