Logique
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And there's no break fee on the Forge deal.
LYC - Lynas Rare Earths
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Here's an excerpt from another opinion piece
Not just another crackdown
April 16, 2011
By Michael West Sydney Morning Herald
http://www.smh.com.au/business/not-just-another-crackdown-20110415-1dhpk.html
As China has sought to corner the rare earths market, sending prices for the 15 elements essential to the comforts of modern life into orbit, from iPad screens to magnets and electric car batteries, Curtis has delivered shareholders a 1000 per cent return in two years. And they will be asked next month to vote on an apparently trifling transaction: to sell the Crown polymetallic metals and heavy rare earths resource to Forge for $21 million cash.
The rationale for the sale is that Crown is "non core" to Lynas's plan to dominate production of rare earths outside China. So a few million in the kitty today is better than nothing.
But it was only in February 2007 (corporate presentation slide 29) that Lynas was boasting of Crown's $50 billion worth of polymetallic metal in the ground. Crown could become the company's next major project. Since then, as official mentions of Crown have become fewer and fewer, rare earths prices have risen 570 per cent.
Privately, it seems Nick Curtis may still be a true believer. He already has a foot on 15 per cent of Forge, a stake that should grow to 36 per cent worth $30 million were his performance shares to vest as a reward for finding Crown for Forge, and completing a capital raising.
And Nick Curtis isn't the only member of the old Lynas crew who still hankers after Crown.
Time-machine logic
Lynas shareholders haven't heard much from former executive director Harry Wang since he stepped off the board in 2006.
But Wang has been a key player on the sidelines.
In 2009 he slung together a proposed Chinese investment that would have seen CNMC buy a 52 per cent stake in Lynas at 36 cents a share.
Curtis backed the deal, though shareholders weren't enamoured of it and it didn't pass muster with the Foreign Investment Review Board.
FIRB's desire to keep the Chinese controlling Australia's richest supply of rare earths has been vindicated since as the press on China's control over the global rare earths market has become almost hysterical.
Rare earths aren't as rare as they sound, only in large, easily-mineable deposits.
Now Harry Wang and Nick Curtis are back together working for Forge on the acquisition, not just as directors on the Forge board but also as the principals of Riverstone Advisory. Riverstone is better known as Sino Resources. It changed its name a few weeks ago and is the corporate adviser to Forge.
It is for shareholders to work out whether Curtis, Wang and the Forge crew are trying to pick up Crown for a ridiculously low price. In light of Lynas's own statements it looks it looks like a once-in-a-lifetime bargain.
Then again, "independent expert" Grant Samuel has given the deal the thumbs up - declaring it "fair and reasonable" for Lynas shareholders.
(If you have the time to read here is another interesting opinion piece
http://www.theaustralian.com.au/bus...s-of-old-battles/story-e6frg8zx-1226036225784)
The cynics might say that getting a favourable Grant Samuel recommendation is as sure a bet as a one-horse race. But they would be wrong ... that one horse could still break down mid-race.
The expert earned no less than $400,000 for this piece of work. And that was without even building a discounted cash flow model. The project costs and revenues were too hard to judge. The primary valuation methodology instead has been to go back and look at what Lynas paid for Mt Weld in 2003 - no more than $22.6 million.
Crown is only a small part of Mt Weld. Forge is forking out nearly as much for Crown as Lynas paid for the whole project. This was enough to convince Grant Samuel that the price was fair.
Roll over HG Wells! So unique is this "Undiscounted Time Machine" (UTM) methodology that it is almost worthy of its own Wikipedia entry.
Shareholders had better decide for themselves if the radical shift in rare earths and metals prices over the last eight years might possibly feature in a fair valuation.
The market is now pricing Mt Weld at more than $3 billion.
It should be noted that Grant Samuel concedes its methodolgy is not robust, and that "the only way to reliably determine the value of the sublease [Crown] deposits would be through an open sale price." But of course.
Lynas did not pursue an open process, however. It opted to offload the asset to its own associates.
Happy Easter.
mwest@fairfaxmedia.com.au
Not just another crackdown
April 16, 2011
By Michael West Sydney Morning Herald
http://www.smh.com.au/business/not-just-another-crackdown-20110415-1dhpk.html
As China has sought to corner the rare earths market, sending prices for the 15 elements essential to the comforts of modern life into orbit, from iPad screens to magnets and electric car batteries, Curtis has delivered shareholders a 1000 per cent return in two years. And they will be asked next month to vote on an apparently trifling transaction: to sell the Crown polymetallic metals and heavy rare earths resource to Forge for $21 million cash.
The rationale for the sale is that Crown is "non core" to Lynas's plan to dominate production of rare earths outside China. So a few million in the kitty today is better than nothing.
But it was only in February 2007 (corporate presentation slide 29) that Lynas was boasting of Crown's $50 billion worth of polymetallic metal in the ground. Crown could become the company's next major project. Since then, as official mentions of Crown have become fewer and fewer, rare earths prices have risen 570 per cent.
Privately, it seems Nick Curtis may still be a true believer. He already has a foot on 15 per cent of Forge, a stake that should grow to 36 per cent worth $30 million were his performance shares to vest as a reward for finding Crown for Forge, and completing a capital raising.
And Nick Curtis isn't the only member of the old Lynas crew who still hankers after Crown.
Time-machine logic
Lynas shareholders haven't heard much from former executive director Harry Wang since he stepped off the board in 2006.
But Wang has been a key player on the sidelines.
In 2009 he slung together a proposed Chinese investment that would have seen CNMC buy a 52 per cent stake in Lynas at 36 cents a share.
Curtis backed the deal, though shareholders weren't enamoured of it and it didn't pass muster with the Foreign Investment Review Board.
FIRB's desire to keep the Chinese controlling Australia's richest supply of rare earths has been vindicated since as the press on China's control over the global rare earths market has become almost hysterical.
Rare earths aren't as rare as they sound, only in large, easily-mineable deposits.
Now Harry Wang and Nick Curtis are back together working for Forge on the acquisition, not just as directors on the Forge board but also as the principals of Riverstone Advisory. Riverstone is better known as Sino Resources. It changed its name a few weeks ago and is the corporate adviser to Forge.
It is for shareholders to work out whether Curtis, Wang and the Forge crew are trying to pick up Crown for a ridiculously low price. In light of Lynas's own statements it looks it looks like a once-in-a-lifetime bargain.
Then again, "independent expert" Grant Samuel has given the deal the thumbs up - declaring it "fair and reasonable" for Lynas shareholders.
(If you have the time to read here is another interesting opinion piece
http://www.theaustralian.com.au/bus...s-of-old-battles/story-e6frg8zx-1226036225784)
The cynics might say that getting a favourable Grant Samuel recommendation is as sure a bet as a one-horse race. But they would be wrong ... that one horse could still break down mid-race.
The expert earned no less than $400,000 for this piece of work. And that was without even building a discounted cash flow model. The project costs and revenues were too hard to judge. The primary valuation methodology instead has been to go back and look at what Lynas paid for Mt Weld in 2003 - no more than $22.6 million.
Crown is only a small part of Mt Weld. Forge is forking out nearly as much for Crown as Lynas paid for the whole project. This was enough to convince Grant Samuel that the price was fair.
Roll over HG Wells! So unique is this "Undiscounted Time Machine" (UTM) methodology that it is almost worthy of its own Wikipedia entry.
Shareholders had better decide for themselves if the radical shift in rare earths and metals prices over the last eight years might possibly feature in a fair valuation.
The market is now pricing Mt Weld at more than $3 billion.
It should be noted that Grant Samuel concedes its methodolgy is not robust, and that "the only way to reliably determine the value of the sublease [Crown] deposits would be through an open sale price." But of course.
Lynas did not pursue an open process, however. It opted to offload the asset to its own associates.
Happy Easter.
mwest@fairfaxmedia.com.au
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Hi All
I'm wondering if anyone could help me out with some research. I found a journal article but can only read one page of it without paying for the rest online. Don't have access to a law library at present. Can anyone track down a link to the rest?
http://onlinelibrary.wiley.com/doi/10.1111/1468-2230.6601005/abstract
Cheers in advance
Gumby
DYOR
I'm wondering if anyone could help me out with some research. I found a journal article but can only read one page of it without paying for the rest online. Don't have access to a law library at present. Can anyone track down a link to the rest?
http://onlinelibrary.wiley.com/doi/10.1111/1468-2230.6601005/abstract
Cheers in advance
Gumby
DYOR
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An excerpt
Shareholders threaten action over Lynas sale
Philip Wen
April 18, 2011
http://www.smh.com.au/business/shareholders-threaten-action-over-lynas-sale-20110417-1djr3.html
A director of Forge, Emmanuel Correia, told BusinessDay all corporate governance requirements had been undertaken ''over and above what the book requires''.
''I've got full confidence in the governance process and ultimately the shareholders will have an opportunity to vote one way or another, both from a Forge and Lynas perspective,'' Mr Correia said.
Mr Correia said the performance shares were issued to Mr Curtis before Forge listed on the stock exchange in September 2009 as an incentive for him to bring a successful resource project to Forge, when the shares were worth much less.
He said there was no discussion of the Crown resource as a viable option until much later.
''Definitely not,'' Mr Correia said. ''It was many months afterwards.''
Mr Curtis's performance shares will vest on the condition that Forge obtains a JORC-approved resource that is able to support a capital raising of $15 million at no less than 35 ¢ a share. Forge shares last traded at $1.15.
The sale of the Crown polymetallic and heavy rare earths resource is worth $20.7 million - less than 1 per cent of the market capitalisation of Lynas, which has seen its share price rise in line with surging demand for rare earth minerals used in mobile phones and laptops.
But concern over the deal has mounted since it was announced last month, with momentum for a vote against it gathering on online share forums.
As one shareholder put it: ''We wish Lynas no harm - we just want a fair deal for the owners of the company. The board, including the chairman [Mr Curtis], needs to be aware and listen to the shareholders.''
Mr Curtis could not be reached for comment yesterday.
How relevant to this debate are the shares issued to NC by Forge shareholders?
Why not focus on the Directors of LYC and their shareholders?
Shareholders threaten action over Lynas sale
Philip Wen
April 18, 2011
http://www.smh.com.au/business/shareholders-threaten-action-over-lynas-sale-20110417-1djr3.html
A director of Forge, Emmanuel Correia, told BusinessDay all corporate governance requirements had been undertaken ''over and above what the book requires''.
''I've got full confidence in the governance process and ultimately the shareholders will have an opportunity to vote one way or another, both from a Forge and Lynas perspective,'' Mr Correia said.
Mr Correia said the performance shares were issued to Mr Curtis before Forge listed on the stock exchange in September 2009 as an incentive for him to bring a successful resource project to Forge, when the shares were worth much less.
He said there was no discussion of the Crown resource as a viable option until much later.
''Definitely not,'' Mr Correia said. ''It was many months afterwards.''
Mr Curtis's performance shares will vest on the condition that Forge obtains a JORC-approved resource that is able to support a capital raising of $15 million at no less than 35 ¢ a share. Forge shares last traded at $1.15.
The sale of the Crown polymetallic and heavy rare earths resource is worth $20.7 million - less than 1 per cent of the market capitalisation of Lynas, which has seen its share price rise in line with surging demand for rare earth minerals used in mobile phones and laptops.
But concern over the deal has mounted since it was announced last month, with momentum for a vote against it gathering on online share forums.
As one shareholder put it: ''We wish Lynas no harm - we just want a fair deal for the owners of the company. The board, including the chairman [Mr Curtis], needs to be aware and listen to the shareholders.''
Mr Curtis could not be reached for comment yesterday.
How relevant to this debate are the shares issued to NC by Forge shareholders?
Why not focus on the Directors of LYC and their shareholders?
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Logique
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Thanks Gumby. The shareholder meeting on 18th May suddenly looks a long way away.
I don't know how a "$27M company", as I've heard Forge described, could develop such a deposit as Crown. Unless say, it had big friends, silently in the wings somewhere.
I don't know how a "$27M company", as I've heard Forge described, could develop such a deposit as Crown. Unless say, it had big friends, silently in the wings somewhere.
For anyone out there who is unsure, you do not have to be a member of the Australian Shareholders Association to appoint them as your proxy with a no vote. I wasnt sure, so just rang and checked. As previously mentioned by others on this thread, just nominate them on the form and send it directly to them.
That said, I will probably join up now, i hadnt realised they were a voluntary nfp, so happy to support.
That said, I will probably join up now, i hadnt realised they were a voluntary nfp, so happy to support.
I'm a member of the shareholders action group that is fighting to stop this deal proceeding. The action has been detailed and covers many angles. The best thrust has been to get the shareholders association on side and active in the campaign. We had to produce hard evidence and not just hearsay to back up the case we presented. I can assure you that the case is well presented and a compelling vote no. However small shareholders are outnumbered by investment funds and brokers that may have an interest in Forge gaining this asset.
Investment fund managers who hold important stakes in Lynas and must be contacted.
1. Dennis P. Lynch; David Cohen ; Sandeep (Sam) G. Chainan; Alexander Norton ; Jason Yeung ; Armistead Nash ; Alexander Umansky ; Philip W. Friedman ; Christopher R. Blair ; Daniel R. Lascano ; Kurt Feuerman ; Dennis G. Sherva (Morgan Stanley Inst Small Companies Gr P) 65MM shares.
2. Van Eck Market Vectors Rare Earth/Str Metals ETF 16MM
3. Ralph R. Layman; Brian Hopkinson - GE Instl International Equity Inv 12MM
4. Oppenheimer Global Opportunities A Frank V. Jennings; Randall Dishmon 10MM
5. Vanguard Total Intl Stock Index Inv Ryan E. Ludt ; Duane F. Kelly 4,3MM
Anyone with any connection to any of the above could contact them and ask them to vote no.
We need to keep up the pressure. Remember as late as 2007 the crown deposit was touted by Curtis for Lynas as their next big project, not his next big project.
Investment fund managers who hold important stakes in Lynas and must be contacted.
1. Dennis P. Lynch; David Cohen ; Sandeep (Sam) G. Chainan; Alexander Norton ; Jason Yeung ; Armistead Nash ; Alexander Umansky ; Philip W. Friedman ; Christopher R. Blair ; Daniel R. Lascano ; Kurt Feuerman ; Dennis G. Sherva (Morgan Stanley Inst Small Companies Gr P) 65MM shares.
2. Van Eck Market Vectors Rare Earth/Str Metals ETF 16MM
3. Ralph R. Layman; Brian Hopkinson - GE Instl International Equity Inv 12MM
4. Oppenheimer Global Opportunities A Frank V. Jennings; Randall Dishmon 10MM
5. Vanguard Total Intl Stock Index Inv Ryan E. Ludt ; Duane F. Kelly 4,3MM
Anyone with any connection to any of the above could contact them and ask them to vote no.
We need to keep up the pressure. Remember as late as 2007 the crown deposit was touted by Curtis for Lynas as their next big project, not his next big project.
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Great post. I will be voting no to the Crown transfer sham.
Another news article, in light of pressure groups, the Malaysian Govt is calling for a hold until review panel is form. I do not endorse or take responsibility for material in the hyper-linked sites.
http://www.themalaysianinsider.com/...ant-on-hold-as-government-forms-review-panel/
One more thing, I am a newbie, so be kind .. the reason I post this link is because I often keep touch with Malaysian news, I thought to bring it to your awareness..
I used to hold Lynas, but sold out at 1.94
http://www.themalaysianinsider.com/...ant-on-hold-as-government-forms-review-panel/
One more thing, I am a newbie, so be kind .. the reason I post this link is because I often keep touch with Malaysian news, I thought to bring it to your awareness..
I used to hold Lynas, but sold out at 1.94
Logique
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Many thanks KTrade, interested in any news about this new review panel, and whether the statement by one blogger,
turns out to be true. The makeup of the panel will signal the intent.
There is a "Bob Brown' in every country. There was a photo of the protest group outside the Lynas site. It consisted of 13 people and two fish. Yes, fish. Two of the protestors were holding up fish. Get this out of the way now and it will not be a distraction at a later date when it could be inconvenient. I doubt it is a problem.
explod
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Good post Gumby. This matter has come to my attention overnight and looks very dodgy indeed. Doing a bit of reading up and will get back.
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good news for us lynas holders:
http://www.smh.com.au/business/asic-concerns-delay-lynas-deal-20110424-1dsys.html
LYNAS CORPORATION'S contentious sale of a rich rare earths and metals deposit to a related party, Forge Resources, has attracted the corporate regulator's attention, and a key shareholder vote will be delayed because of concerns over disclosure.
Having boasted of "our next project" with "over $50 billion metal content" as recently as 2007, Lynas has now decided its Crown polymetallic deposit is "non-core" and has asked its shareholders to approve its sale to Forge for $20.7 million.
The executive chairman of Lynas, Nicholas Curtis, is also a director and 15 per cent shareholder of Forge. He stands to vest 24 million performance shares in Forge - worth close to $30 million at current share prices - if the deal succeeds. This will boost his stake in Forge, and ownership of the Crown ore body, to close to 40 per cent. He owns less than 1 per cent of Lynas.
Advertisement: Story continues below It is understood the Australian Securities and Investments Commission is taking particular interest in the deal, given Mr Curtis's prominence and the shareholder concern the deal has generated.
Forge Resources had hoped for its shareholders to vote on key resolutions relating to the deal at an extraordinary general meeting on May 18, the same date Lynas shareholders will have their say.
Read more: http://www.smh.com.au/business/asic-concerns-delay-lynas-deal-20110424-1dsys.html#ixzz1KUdErssk
http://www.smh.com.au/business/asic-concerns-delay-lynas-deal-20110424-1dsys.html
LYNAS CORPORATION'S contentious sale of a rich rare earths and metals deposit to a related party, Forge Resources, has attracted the corporate regulator's attention, and a key shareholder vote will be delayed because of concerns over disclosure.
Having boasted of "our next project" with "over $50 billion metal content" as recently as 2007, Lynas has now decided its Crown polymetallic deposit is "non-core" and has asked its shareholders to approve its sale to Forge for $20.7 million.
The executive chairman of Lynas, Nicholas Curtis, is also a director and 15 per cent shareholder of Forge. He stands to vest 24 million performance shares in Forge - worth close to $30 million at current share prices - if the deal succeeds. This will boost his stake in Forge, and ownership of the Crown ore body, to close to 40 per cent. He owns less than 1 per cent of Lynas.
Advertisement: Story continues below It is understood the Australian Securities and Investments Commission is taking particular interest in the deal, given Mr Curtis's prominence and the shareholder concern the deal has generated.
Forge Resources had hoped for its shareholders to vote on key resolutions relating to the deal at an extraordinary general meeting on May 18, the same date Lynas shareholders will have their say.
Read more: http://www.smh.com.au/business/asic-concerns-delay-lynas-deal-20110424-1dsys.html#ixzz1KUdErssk
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There is a "Bob Brown' in every country. There was a photo of the protest group outside the Lynas site. It consisted of 13 people and two fish. Yes, fish. Two of the protestors were holding up fish. Get this out of the way now and it will not be a distraction at a later date when it could be inconvenient. I doubt it is a problem.
So do you have a link to a photo with the 13 people and two fish?
So do you have a link to a photo with the 13 people and two fish?
not just photo... check this out http://www.facebook.com/video/video.php?v=10150121367177465
http://i126.photobucket.com/albums/...458814354_100000279046017_803349_243052_o.jpg
more for your attention
more for your attention
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