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LST - Lion Selection

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One of the objectives of LST is to become a gold producer rather than an investment company.

I have my doubts that LST will accept a bid from IRN (or another) unless it is substantially more. With a rising Gold price the benefits of Cracow for LST may outweigh a takeover of $1.77, especially considering it could liquidate and have a value of $1.82 (as of 29 Feb as per the NTA)

56gsa, I haven't looked at your numbers, though have you considered if the current bid for Cracow of $200m is an accurate value? With LST owning 30% and a pre-emptive right, do you think this may have kept potential bidders away and hence a lower bid?

Just a thought.

Tommymac
 
heh tommymac - you could be right, LST's pre-emptive right could have scared others away meaning this is priced at bottom end. difficult to know
i've been away a few weeks and notice the bidders statement has been released - LST saying don't sell to IRN... interestingly LST also bought $100k of HAV on-market - not sure if this is somehow related to IRN?

Not across my companies law but could LST sell its IRN holding to another party - this would then defeat the purpose of IRN's takeover???

Interesting just readin through the bidders statements see that Laxey Partners (LPL) appear to have 10% interest in LST... appears to be a hedge fund - this is their speel...


Not sure how this will play out but I have a feeling there will be a few twists and turns - can't see IRN getting the 50% at their current offer and if other players see LST going cheap with all that cash and liquidity I think they will want a slice too...
 
56gsa,
I tend to agree with you, there will be twist and turns. Probably best just to sit back and wait.
 
tommymac said:
56gsa,
I tend to agree with you, there will be twist and turns. Probably best just to sit back and wait.
Click to expand...

I'm definitely sitting on my holding in this TM - no rush here... U hold?

As my numbers above indicate there appears little downside with this if the takeover happens given the large liquid assets IRN is acquiring

Based on my numbers above, if you acquire LST now ($1.54 today), and IRN achieves 100% through takeover the break even point of your investment will be 57 cents based on the new number of shares for combined IRN_LST. This implies a $455m mkt cap - but net liquid assets (cash + shares - liablities) will be $432m... that would be valuing Tampakan at $23m!!! Similar scenario for IRN acquiring 50%.

Downside you could say is takeover falling through but then you're stuck with LST at a 20% discount to its NTA - only bad if commodities fall

SO plenty of upside possibilities - new bidder, IRN increases bid (theres plenty of reasons for them to) etc etc
 
56gsa said:
I'm definitely sitting on my holding in this TM - no rush here... U hold?
Click to expand...

I'm holding.

LST just gone into trading halt until Friday. Have no option now but to wait and see. Hopefully it will provide some answers.
 
Wow! Two big announcements in one day.

LST agrees with Xstrata to sell holding in IRN
LST agrees to sell Cracow for $80m to BDR.

The first is obviously unexpected. IRN now trading at $1.08, 8c above the offer price of $1.00 set by Xstrata. Not unexpected however is that IRN rejects offer. Good news for LST? IRN doesn't believe so with the comments in its announcement saying LST only way to make money is to sell investments.

Personally I thought investment companies such as LST made money by buying and selling investments for a profit. Based on the price history of IRN , $1 looks like a reasonable price as it has struggled to stay about that in the past. But they do make a good (but obvious) point that it could be a way to frustrate the attempt by IRN to takeover LST.

LST to sell Cracow. I thought LST would try to buy Cracow. It seems to be in line with its objective of becoming a Gold Miner. However, LST has requested to remain in a trading halt. Is there more news to come?
 
56gsa said:
Not across my companies law but could LST sell its IRN holding to another party - this would then defeat the purpose of IRN's takeover???
Click to expand...

TM ... the twist !! Well I did have this as one of my scenarios but then didn't buy IRN directly so have missed out on its 40% gain... only have the 15% gain on LST since IRN bid started but when trading commences again we should see LST up around the 1.70 mark? NTA has gone up 20 cps based on potential proceeds of IRN and Cracow sales.

What's your thoughts on LST now they are all cashed up? I expect a hefty dividend from LST which is what they have done in the past... but you're right about the fact they wanted to become a miner and not just a LIC so they may take a controlling position in a company - maybe gold given their history...

Due to start trading tomorrow morn so announcement this afternoon I presume.
 
As a holder of View Resources (VRE), I hope LST will want to use its cash to salvage its holding in VRE by baling them out - Bronzwing Gold Mine is up for grabs plus a 30% share in a profitable nickle mine.
 
Squawkbox said:
As a holder of View Resources (VRE), I hope LST will want to use its cash to salvage its holding in VRE by baling them out - Bronzwing Gold Mine is up for grabs plus a 30% share in a profitable nickle mine.
Click to expand...

more likely that one rather then the LAF debacle... LST has also demonstrated a lot of support for HAV which now has 3 fairly well developed project s- they may want to overload 1 or 2 and concentrate on getting one operational...

don't think this will have much impact on share price though unless they score a real bargain
 
56gsa said:
What's your thoughts on LST now they are all cashed up?
Click to expand...

56, A big dividend would be nice.

A lot of scenarios to consider now and I guess we just need to wait. But I too wish I had some holding in IRN. Assuming a good announcement tomorrow and we should see good gains in LST.
 
board meeting over the weekend - how much will the divvie be?? C'mon Lion, reward the faithful!

Total proceeds from IRN and Cracow (assuming $1 per IRN share and including shares on Cracow sale)
= $177m
=> 93cps

Profit on these transactions (based on costs of $23m for IRN and $56m Cracow)
= $97m
=> 51 cps

Now Xstata are getting a bargain paying $1 a share for IRN - I mean IRN have $100m in cash so really they're only paying $320m for 35% of one of the biggest copper/gold undeveloped projects in the world

For every 20 cents Xstrata raises its bid, LST's profit per share from these two deals goes up 10 cps

I think we may see two divvies:
1) based on Cracow sale which can go through soon - around 10cps
2) the bigger bonanza on IRN sale when it happens (maybe 30cps ++)

having staged divvies gives current LST holders something immediately and keeps them hanging on for the big one so highly UNlikely they'll sell into IRN takeover ... (which - based on current IRN share price - in theory should see LST valued at $2.26++ but don't think that will happen)


 
actually much bigger than I was thinking - and I'd forgotten about the Albion stake - see below - nice position to be in giving away your millions...

 
No announcement first thing this morning - will try and check in between meetings today but happy if someone posts on this when the ann. comes out...
 
and there it is....

$1.35 possible return to shareholders - large chunk of which may be tax-free

leaving an investment vehicle with NTA of $0.69 - which if trading at current typical discount would mean shares trade around $0.50

Currently $1.80 after trading commenced which suggest people don't see much upside or not confident this will go through

Hard to analyse but a tax-free div of $1.35 is comparable to about $1.90 fully taxed ??
 
56gsa said:
board meeting over the weekend - how much will the divvie be?? C'mon Lion, reward the faithful!
Click to expand...

56, Spot on

Gotta love these moments when all your word selecting shares seems to have paid off. Obviously we've still got to wait to see it happen but a good moment none the less.
 
Anyone have any thoughts on LST at the moment?

Or what other gold shares are worth looking at presently?

thanks - arco
 
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