MGX - Mount Gibson Iron

[chansw]

Chinese move past Mt Gibson threshold

Kevin Andrusiak
October 24, 2007

http://www.theaustralian.news.com.au/story/0,25197,22637921-643,00.html

CHINESE investors have used creep provisions under the Corporations Law to squeeze past the 19.9 per cent threshold in rising iron ore miner Mount Gibson.

Apac Resources, which is registered in the tax haven of Bermuda but is listed on the Hong Kong Stock Exchange, now controls 160.8 million shares in Mount Gibson, or 20.3 per cent.

Normally, any shareholding in a company beyond 19.9 per cent automatically triggers the announcement of takeover intentions but under rarely used provisions in the Corporations Law, a company is permitted to gain a maximum 3 per cent of company shares every six months.

According to company records, Apac became a substantial shareholder in October last year, with a stake of 48.4 million shares, or 10.4 per cent, worth about $34 million.

Apac's stake is now worth about $443 million as Mount Gibson ramps up production at its high-grade hematite project at Koolan Island in the north of Western Australia.

Mount Gibson yesterday shipped its millionth tonne of iron ore from the site.

Company managing director Luke Tonkin said he was in constant contact with Apac representatives. "My understanding is that they like the story," Mr Tonkin said.

Mount Gibson's other big shareholder, the Cypriot-domiciled Gazmetall Holdings, controls 19.77 per cent of the company after it paid $98.8 million for a 19.89 per cent stake in November last year.

Gazmetall Holdings is linked to Russia's biggest iron ore player, Metalloinvest, and is controlled by Alisher Usmanov, who is believed to be Russia's 18th richest man, with a personal fortune of $US5.5 billion ($6.2 billion).

Not to be outdone by its Chinese rivals, Gazmetall also bought shares in Mount Gibson during August and September, after letting its shareholding slip to around 17 per cent.

According to Mount Gibson's annual report, the company improved its sales of iron ore by 78 per cent last year.

Mount Gibson wants to be producing 10 million tonnes a year by 2010 across its three WA operations.

The board has made no secret of its intentions to look for more acquisitions to further consolidate the junior end of the iron ore sector after winning last year's bitter battle for rival Aztec Resources.

Mount Gibson shares closed 14c higher at $2.76 yesterday.

 

[michael_selway]

Hi its doing well atm

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.1 12.6 29.2 42.6
DPS 0.0 4.2 10.4 16.9

Date: 24/10/2007
Author: Kevin Andrusiak
Source: The Australian --- Page: 43
Hong Kong-listed Apac Resources has lifted its holding in Australian resourcesgroup Mount Gibson Iron to 20.3%. While a move past the 19.9% threshold wouldusually trigger a mandatory takeover offer, the "creep" provisions ofthe Corporations Act allow for such an incremental rise. Mount Gibson meanwhilehas reached a milestone by shipping the first one million tonnes of ore from itshigh-grade hematite operation at Koolan Island in Western Australia. Its stockclosed at $A2.76 on 23 October 2007, a rise of $A0.14 for the day

Date: 25/10/2007
Author: Paul Garvey
Source: The Australian Financial Review --- Page: 77
Some mining groups have hopes for the iron ore reserves of the mid-west regionof Western Australia (WA). Luke Tonkin, the MD of Mount Gibson Iron, is not veryconfident about this region. His company began working in this area before theprice of iron ore shot up on global markets. Tonkin says there are severedifficulties for mining groups trying to work in this area - the iron ore is nothigh grade, there is a shortage of infrastructure and there are environmentaland planning restrictions. Tonkin says his company has succeeded there largelybecause its mines are already located close to infrastructure. He says the groupplans to look overseas for new opportunities

thx

MS

 

[Nithy]

As per today's stock situation, MGX have $2.89 price, Its Up. Its stock closed at $A2.89 on 29 October 2007, a rise of $A0.10 for the day.

 

[chansw]

Mount Gibson hopeful about WA port
November 21, 2007 - 7:10PM

http://news.smh.com.au/mount-gibson-hopeful-about-wa-port/20071121-1by9.html

Constraints at Geraldton Port in Western Australia, which have impacted Mount Gibson Iron Ltd's export volumes, are expected to ease from January next year when a new shiploader begins operations.

The iron ore producer is the port's largest customer and will account for 60 per cent of the new shiploader's 10 million tonnes per annum capacity.

Mount Gibson managing director Luke Tonkin told shareholders at the annual general meeting on Wednesday that the company had found the port to be inefficient and costly.

Mr Tonkin said the port constraints had forced the company to stockpile one million tonnes of iron ore from its three million tonnes per annum Tallering Peak operation, situated east of Geraldton.

"In the second half of this (fiscal) year, we become unconstrained by Geraldton Port when the new shiploader is up and running," he said.

The company plans to access to the main pit at its Koolan Island operations in about 18 months time and is currently mining from satellite pits.

The main pit at Koolan Island is considered by Mr Tonkin to be Mount Gibson's "main prize".

The project was attained through the acquisition of Aztec Resources Ltd in February and was mined between 1965 and 1993 by the then-BHP Ltd.

Mount Gibson recommenced iron ore production early this year and the first shipment followed in June.

The Perth-headquartered company expects to mine the main pit at Koolan Island in 18 to 24 months time and hopes to reach its targeted ore production rate of four million tonnes per annum in the fourth quarter of 2009.

"The Koolan main pit will dominate earnings in three to four year's time," Mr Tonkin said.

There are possible extensions underneath the main ore body, he said.

Mount Gibson has further merger and acquisition opportunities, he added.

All resolutions were passed at the meeting.

Mount Gibson's shares closed 2.33 per cent lower at $2.51.

 

[haemitite]

I's hard t complain about a 400% share price rise

But as an ex AZR shareholder its still interesting to read 'The main pit at Koolan Island is considered by Mr Tonkin to be Mount Gibson's "main prize"'

 

[michael_selway]

I's hard t complain about a 400% share price rise

But as an ex AZR shareholder its still interesting to read 'The main pit at Koolan Island is considered by Mr Tonkin to be Mount Gibson's "main prize"'

MGX is already sellign and producing which is good, but it still has a short mine life issue?

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.1 11.9 28.2 37.7
DPS 0.0 4.2 10.4 16.9

thx

MS

 

[chewy]

I believe they have a big exploration budget for 08, which should help with extending reserves. And as you said they are already selling and producing through these boomer iron prices so that should leave them well cashed up for acquisitions if they want to take that route.

 

[chansw]

MGX is already sellign and producing which is good, but it still has a short mine life issue?

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.1 11.9 28.2 37.7
DPS 0.0 4.2 10.4 16.9

thx

MS

I was at the AGM myself. The MD has mentioned the company will look for M&A opportunities outside MidWest . I think the strong cashflow and advanced stage of projects has given it some advantages over its MidWest peers.

Also, the MD mentioned to negotiate with Dambimangari people about mining the west of Koolan island which can have more potential upside.

 

[mas888moe]

Hi guys,

Does anyone know why the sudden rally in MGX? Are there any announcements due? I would like to get in but not over $2.70. What is a good price to buy MGX at?

Thank you!

 

[jman2007]

Anyone trade this today?...

What a crazy rollercoaster ride, pullback to 2.43 at one stage before rallying to close at 2.73, people who entered at 2.43 would have been happy as things were looking a bit uncertain for a while. I wonder if people were shorting this and then coming back in at a lower level?

jman2007

 

[jman2007]

Anyone trade this today?...

What a crazy rollercoaster ride, pullback to 2.43 at one stage before rallying to close at 2.73, people who entered at 2.43 would have been happy as things were looking a bit uncertain for a while. I wonder if people were shorting this and then coming back in at a lower level?

You might have seen a great entry today slip by mass888moe, you would have had to have been very decisive and quick though.

jman

 

[aleckara]

I's hard t complain about a 400% share price rise

But as an ex AZR shareholder its still interesting to read 'The main pit at Koolan Island is considered by Mr Tonkin to be Mount Gibson's "main prize"'

I agree. I wanted to get out of Mt Gibson after because after two times of shareholders saying 'no' they just kept extending the offer until slowly the arbitrage kicked in. All it took was for one mistake by Aztec and everyone jumped ship. They gave them almost half a year to make a mistake though.

I also found that quote very interesting. I would of held AZR like all my other stocks and done quite well.

 

[laurie]

In Trading Halt Material Holding now either they found more ore or its means someone has a holding for a take over

cheers laurie

 

[mas888moe]

The second page of the announcement mentioned there was a large increase in a Company's shareholding over the weekend and were in discussions about a possible transaction - who do you think the other company is?

 

[laurie]

The second page of the announcement mentioned there was a large increase in a Company's shareholding over the weekend and were in discussions about a possible transaction - who do you think the other company is?

Well it's either the Chinese [Apac Resources]or the Russians[Gazmetall Holdings] unless we have someone from the left field I hope it ends up with a bidding war

cheers laurie

 

[Mofra]

The second page of the announcement mentioned there was a large increase in a Company's shareholding over the weekend and were in discussions about a possible transaction - who do you think the other company is?

We'd have to assume at this stage it is one of the companies that have substantial interests in MGX: APAC, Gazmetall, etc.

Still wouldn't rule out the Chinese taking a higher interest either - for all the talk about their interest in securing iron ore in general, they are far more interested in hematite (discerning importers want lower processing costs, especially as magnetite uses alot of energy to process & high oil prices only increase this cost).

 

[laurie]

Well it also could end up as a JV between MGX and either the Chinese or the Russians

cheers laurie

 

[Mofra]

Well it also could end up as a JV between MGX and either the Chinese or the Russians

cheers laurie

May be a possibility, however with a very low debt/equity ratio one would expect that MGX could fund production & expansion costs themselves, Extension Hill is costed as I understand it and Tallering Peak cashflows (and now Koonan Island ) should cover costs.

 

[shinobi346]

Another possibility is they're going to make a takeover offer for another company. They have a lot of money in the bank and have already eaten one company.

 

[laurie]

Good if it was true but read the announcement

The Perth-based company announced to the market that it was made aware of a "potential transaction concerning a material shareholding in the company" over the weekend.

IN THE COMPANY

cheers laurie