MGX - Mount Gibson Iron

[kerosam]

I'm at a loss why our market is down when the DOW is up and as for MGX well for the life of me cannot understand it being in the red if anyone can shed light on the subject please do as I have given up trying to work our market out

cheers laurie

Experts are advising investors & traders to tread carefully... unless we hit some ground regarding this global crisis (or soon to have global crisis), IMHO, i view every upward as some sort of a dead cat bounce.

Fund managers might be buying on the weak (since most of them buy for the long term) but I think individual investors/traders are taking profits or cutting losses when there are any opportunities.

As for our beloved MGX, high $2.80... hope it'll pick up pace... the ann sounds as if there's a fair bit of procedures & red tape to go thru.

 

[laurie]

kerosam

Yeh had already assumed what you said was happening to the market,was hoping for clean T/O offer interesting times ahead

cheers laurie

 

[jman2007]

Looks like this could get ugly folks,

I'm somewhat confused over the murky relationship that is purported to exist between Shougang and APAC Resources, they are joint investors in WA's iron ore proponent Australasian Resourcs, and have senior executives in common. Apparently according to the Corporations Act, Shougang would only be a related party to APAC if they held a 20% interest, compared to their current 14.8% holding.

It will be up to MGX to prove that there is a material relationship here, and that it is not just two companies who share a common desire to invest in an emerging iron ore producer. Good luck to MGX, they'll need it trying to delve into the murky world of chinese business interests, where there will be a myrid of cross share-holdings and complicated joint interests.

ASIC's refusal to become involved in the turmoil will have sparked outrage from MGX's other shareholders and management alike, ASIC could have set an example here and set a benchmark of allowable business practices for foreign owned companies purchasing stakes in Australian companies. Instead they're the only ones who don't seem the least bit concerned by this!

jman

 

[haemitite]

The good news from Merrills

Shareholder change should be ignored for now​

Shougang’s proposed purchase of 19.7% stake in MGX, if combined with 22% in which they also have an interest, could mean that Shougang is forced to bid $2.81/sh. At this stage, we do not believe that Shougang intends to bid for theminorities. We also believe the MGX board will seek to minimise Shougang’s influence, in the absence of a full bid at a price reflection a control premium.​

We have upgraded earnings on the quarterly report​

Operationally the company is very strong, with production above our expectations, H1 profit of $32m ahead of our $25m, entirely on revenue, due to elimination of Geraldton selling discount. The production report included the unaudited H1 NPAT but no other data. We believe the main difference was currency hedging and the end of the Geraldton price discount.​

Earnings forecast changes​

FY09 up 4%, FY10 up 2.7%, FY11 up 2.4%.​

Price target to $3.60/sh​

Our price target represents 10.5 x FY09E EPS, and a 20% premium to our NPV, which we believe is justified because of the scarcity of iron ore pure plays, and the upside potential to our current iron ore forecasts.​

MGX is clean leverage to the iron ore settlement​

Iron prices looking strong, and contract price expectations continue to rise. A 70% iron ore price increase puts the company on 5.9x in FY09, and 3.6x FY10, and we recommend purchase for leverage to above expectation​

 

[jman2007]

Thnx for the info heamitite,

Merrill appear to be particularly bullish re the companies potential, although I think this latest development could provide a distraction for management, since the exact intentions of the two major Chinese investors looks uncertain at this stage. It'll be mighty interesting what impact this forecast has on the sp come Monday

jman

 

[katalyst]

Things look quite positive for MGX. I'd love to see a close above $3 we nearly got there today. Bluesky if it can get above $3, I'll be watching it closely. I dont hold btw, not yet anyway.

 

[Go Nuke]

Yes indeed if It closes about $3 I might consider getting in...but if it doesn't.....it looks like something of a triple top to me?

I mean I don't know much about MGX though if they are dealing with the Chinese lets hope it doesn't go the way of CFE

Thoughts anyone?

 

[katalyst]

Thanks for the chart. MGX are actually producing. I think they're trying to pump out more ore and expand they're resource. I'm not 100% about the Chinese involvement. Merrill Lynch and JBWere have targets of $3.60 from memory.

 

[chewy]

nothing like cfe. cfe are magnetite so they need heaps of $ to set it up - so they need chinese (or someone) to fund them to be able to afford to ever set it up. mgx are purely hematite and already producing and earning heaps so don't need any $ from anyone

 

[jman2007]

Aaah yes,

The old triple peak chestnut again. I think a big factor in MGX's resurgence has obviously already been stated, they have a good solid cashflow and production is in full swing.

Additionally, they seem to have made significant headway in resolving the bottleneck problems at the Geraldton Port. You can mine iron ore till you're blue in the face, but if you can't get it to the market it's about as valuable as lawnmower clippings.

jman

 

[haemitite]

More so that analysts are now talking 60% price rises, as opposed to 30% to 50% tops a few weeks back.

 

[katalyst]

Looks like it could break through $3 heaps of sellers were/are lined up there. Seems like someones chomping through them atm.

 

[agro]

this one has been kept in the dark for a while

earnings report out today, 32m profit! well done MGX

too bad no dividends have been announced though

Chinese must be on a good thing - takeover talks still going on throughout the registry this week

 

[shinobi346]

Yea the dividend bit was the part that interested me the most. Unfortunately its still not on the tables yet.

 

[agro]

anyone have a suggestion as to why this finished up 2cents late in the day on Friday?

surly it can't be the exercise of options alone..

i thought MGX was investigating their register at the moment..

 

[agro]

no one offered to comment so i thought i'd ask again for why MGX is up as high as 3.15 today?

i thought they were in talks with the chinese

 

[TheAbyss]

How about a 65% increase in their resource value less any hedged prices? MGX are producing now and can take advantage of the market situation as opposed to the hopeful explorers out there who may not produce anything in the current boom IMO.

http://www.theaustralian.news.com.au/story/0,25197,23231755-5005200,00.html

 

[agro]

well there you have it boys and girls, 32 million shares traded today and new record highs

"Mount Gibson to apply to the Takeovers Panel"

Mount Gibson Iron Limited (“Mount Gibson”) refers to its announcement on 31 January 2008 regarding the conditional sale by Gazmetall Holding Cyprus Ltd (“Gazmetall”) of Gazmetall’s 156.8 million shares in Mount Gibson (representing approximately 19.73% of Mount Gibson’s issued capital) to Shougang Concord International Enterprises Company Limited (“Shougang Concord”).
In that announcement, the Board stated that it was making inquiries in relation to the transaction. Those inquiries were focused on the nature of the relationship between Shougang Concord and APAC Resources Ltd (“APAC Resources”), the owner of 160.8 million shares in Mount Gibson (representing approximately 20.2% of Mount Gibson’s issued capital).
As a result of these inquiries, Mount Gibson has applied to the Takeovers Panel seeking a declaration of unacceptable circumstances (and accompanying orders) in relation to the sale of Mount Gibson shares from Gazmetall to Shougang Concord.

 

[laurie]

Well the next target price will now be $4 add a 35% premium if a takeover takes place and we end up with +- $5.50 even so that still is a very cheap buy for the Chinese I hope it falls through

cheers laurie

 

[agro]

Well the next target price will now be $4 add a 35% premium if a takeover takes place and we end up with +- $5.50 even so that still is a very cheap buy for the Chinese I hope it falls through

cheers laurie

i wouldn't like a company with such growth potential to be taken over!!

$5.50 we get from an offer