MOD - MOD Resources

[Country Lad]

The company is currently Medical Corporation Australia (MOD) but I can not find a thread for it.

It will change its name to MOD Resources in a few weeks hence the title.

Rumours abounded during December that some leading lights in the resource game were to be involved in this non performing medical company.

All was revealed in the announcement of 22 December , so I thought it worth a punt – a case of backing the jockey(s).

Medical Corporation Australasia Limited (MOD) is pleased to announce the conditional purchase of Amphion International Limited (Amphion), along with a share placement of up to $2.8 million, as part of a proposed move into the resources sector.

The cashed-up MOD will be headed in its new pursuit by well-known resources entrepreneurs Simon Lee AO and Miles Kennedy and will have the financial backing of some of Australia’s leading business and industry figures, including Andrew Forrest, James Packer and former Multiplex director, Tim Roberts.

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01135621

At the AGM on 16 May, amongst other resolutions are the change of name, change to business activities and the acquisition of GMR Resources.

MOD has already entered into agreements to acquire the highly prospective GMR Copper Project located in the Kalahari Copper Belt in north western Botswana so things are moving already.

Worth a good look and a punt if you are into backing jockeys rather than the horse.

Cheers
Country Lad

 

[springhill]

Mod resources are sitting on NZ's biggest undeveloped gold deposit with a JORC resource.
18.7million tonnes grading 1.71g/t using a 0.70g/t cut off, for a JORC compliant inferred gold resource of 1.024Moz.
The 1.024Moz resource is all confined within an 800m section of the Main Zone prospect, which represents less than 15% of the known 6km strike length of the Sams Creek dyke.


They also have the strategic and highly prospective ~10,000km² holding between the Boseto
and Ghanzi projects on the Kalahari Copper Belt – Africa’s newest copper-silver mining province
• Immediate success with first drilling program - maiden resource estimate pending from the Corner K prospect
• RC exploration drilling to continue throughout 2012 for new copper-silver discoveries
DRILLING RESULTS FROM KALAHARI COPPER BELT INCLUDE 12.9% COPPER AND 208g/t SILVER
● Final drilling results from Corner K discovery on Botswana’s Kalahari Copper Belt include high-grade copper (12.9%) and silver (208g/t) assays
● All but 4 of 138 holes (19,139m)
intersectedmineralisation
● Snowden Mining Industry Consultants engaged to prepare independent JORC compliant mineral resource estimate for Corner K discovery
● Maiden resource estimate scheduled to be completed in the September Quarter

The final diamond assay results received by the Company include:
• 0.6m@12.9%Cu and 208g/t Ag in hole MO-108-D from 127.4m
• 4.2m@1.9%Cu and 49g/t Ag in hole MO-104-D from 54m
• 3.5m@1.8%Cu and 48.5g/t Ag in hole MO-112-D from 184.5m
• 3.4m@1.4%Cu and 30.6g/t Ag in hole MO-99-D from 147.6m
• 4.1m@1.1%Cu and 31.9g/t Ag in hole MO-98-D from 56.4m

> 100 km of priority copper-silver target zones already identified
• New drilling programs to focus on northern lease PL141 and southern leases PLs 34, 35 and 36
• Final data from high resolution airborne geophysics to refine target definition

GOALS AND OBJECTIVES FOR 2012
● Produce maiden resource estimate for Corner K copper-silver discovery
● Continue RC drilling priority targets for new discoveries
● Continue geochemical and geophysical programs to expand pipeline of drilling targets
● Ongoing optimisation of ~10,000km² Kalahari Copper Belt footprint

 

[Redacted]

The fall of MOD

Hi,

I was watching MOD Resources Ltd (MOD.AX) over the last few days. The stock seemed to be on a steady climb, as pictured below..



Now, riddle me this..How does a company that seems to be on an upward trend, go into trading halt and once they release some relatively good news (in short they let the market know they had achieved multiple intersections of zinc, copper and silver at varying percentages within an overseas site), they re-opened for trading and tank heavily, and then tank further today.

I'm admittedly new to market analysis, but can't seem to fathom the logic for this occurrence. I can only summarize that the market was expecting much better results/ different news altogether and turned their back on MOD when they did not deliver.

Does anyone have a theory as to why such a significant drop would occur on such inoffensive news? Frankly, it's quite frightening.

Thanks

 

[stockGURU]

Re: The fall of MOD

I can only summarize that the market was expecting much better results/ different news altogether and turned their back on MOD when they did not deliver.

I think you'll find that this is probably the reason. I took a quick look at the results and the higher grade intercepts seemed narrow and at depth. I think it's probably just a case of people having expected more and profit takers moved in when the reality didn't match the expectations.

 

[Miner]

Re: The fall of MOD

Hi,

I was watching MOD Resources Ltd (MOD.AX) over the last few days. The stock seemed to be on a steady climb, as pictured below..

View attachment 66244

Now, riddle me this..How does a company that seems to be on an upward trend, go into trading halt and once they release some relatively good news (in short they let the market know they had achieved multiple intersections of zinc, copper and silver at varying percentages within an overseas site), they re-opened for trading and tank heavily, and then tank further today.

I'm admittedly new to market analysis, but can't seem to fathom the logic for this occurrence. I can only summarize that the market was expecting much better results/ different news altogether and turned their back on MOD when they did not deliver.

Does anyone have a theory as to why such a significant drop would occur on such inoffensive news? Frankly, it's quite frightening.

Thanks

I think you'll find that this is probably the reason. I took a quick look at the results and the higher grade intercepts seemed narrow and at depth. I think it's probably just a case of people having expected more and profit takers moved in when the reality didn't match the expectations.

Are you guys still following MOD and the imminent coming of scoping study. Market did not receive it well today however . I wanted to wait but price went back at opening price of today.
Any update share will be appreciated. It is a highly speculative stock however

 

[greggles]

MOD Resources surging today following an announcement that detailed the following:

• Successfully raised $10 million through an oversubscribed institutional Placement at $0.30/sh.
  
• $5 million to be raised through a fully underwritten Rights Issue at $0.24/sh.
  
• Confirms strong shareholder confidence in the Company and the quality of the T3 Copper Project
  
• Received an unsolicited, non-binding, indicative, conditional proposal from Sandfire at $0.38/sh.
  
• The Board believes this proposal undervalues the Company's assets
  
• MOD continues to explore all options including further engagement with Sandfire

Vindication for MOD and evidence that the company has been unjustifiably sold down well below fair value given that Sandfire was prepared to pay 38c per share for the company, an offer which likely undervalued MOD given the circumstances. The offer did do one thing, and that's change market sentiment towards MOD. There seem to be plenty of people out there today saying, "Well, if Sandfire were prepared to pay 38c a share then..."

MOD currently trading at 34.5c, up 56.82% on yesterday's close.

 

[barney]

"Well, if Sandfire were prepared to pay 38c a share then..."

Interesting indeed. I found the March 2018 Top Twenty Shareholder list and I don't see Sandfire listed directly …. I wonder whether they have taken a stake in the Company during the last 10 months prior to the 38 cent bid?

 

[greggles]

Interesting indeed. I found the March 2018 Top Twenty Shareholder list and I don't see Sandfire listed directly …. I wonder whether they have taken a stake in the Company during the last 10 months prior to the 38 cent bid?

I think it's possible but if so it hasn't been more than 5% as I checked all the Change in substantial holding notices in the last 12 months and didn't see any mention of Sandfire Resources.

What I think is more likely is that they were probably running the ruler over MOD as a result of its depressed share price, particularly over the last few months. The offer strikes me as entirely opportunistic given that there has been no previous connection between the two companies that I have come across. That being said, I could have missed something as I haven't gone through all the announcements.

It is interesting that MOD said in today's announcement that they continue "to explore all options including further engagement with Sandfire". It will be interesting to see what transpires from here.

 

[Smurf1976]

I see that this dropped almost 6% today and is now at the lowest price since the big jump on 22 January.

Anyone have any thoughts?

I don't hold, just noticed today's fall.

 

[barney]

1 for every 13 shares held at 0.24 cents to eligible S/H's with Ex-Date tomorrow 1st Feb ….. seems a fair deal to look after current holders and boost the coffers, but a few sellers took the opportunity to sell while the SP was up. Looks a safe accumulation play at the moment and should bounce again not too far down the track. (discl. Don't hold)

 

[greggles]

Sandfire Resources to acquire 100% of MOD Resources for 45c per MOD share, valuing the equity of MOD at A$167million.

Not sure a lot of MOD shareholders will be happy with 45c, even though it represents a nice premium to its close yesterday of 31c and a 7c improvement on Sandfire's last offer of 38c back in January.

A lot of value yet to be unlocked from MOD's Botswana assets. I wonder if anyone will come in over the top of Sandfire's bid now that a firm figure is on the table.

 

[SilverRanger]

Based on today's closing price, there's still 8% merger arbitrage to be milked (0.455 implied vs 0.42). I wonder why such a gap exist given the board have given their thumbs up?

 

[barney]

Based on today's closing price, there's still 8% merger arbitrage to be milked (0.455 implied vs 0.42). I wonder why such a gap exist given the board have given their thumbs up?

I guess there is always some remote risk that the deal can fall over … plus there is the clause that the "Cash Consideration of A$0.45 per share is capped at A$41.6 million (“Cash Cap”).

Once the cash cap is reached, the remaining value will be issued in SFR shares …... so punters may end up owning some Sandfire Stock rather than getting it all in cash …… X% buffer seems reasonable given SFR stock could drop under the deemed $6.78 offer price between now and settlement.

 

[SilverRanger]

I guess there is always some remote risk that the deal can fall over … plus there is the clause that the "Cash Consideration of A$0.45 per share is capped at A$41.6 million (“Cash Cap”).

Once the cash cap is reached, the remaining value will be issued in SFR shares …... so punters may end up owning some Sandfire Stock rather than getting it all in cash …… X% buffer seems reasonable given SFR stock could drop under the deemed $6.78 offer price between now and settlement.

I guess there is always some remote risk that the deal can fall over … plus there is the clause that the "Cash Consideration of A$0.45 per share is capped at A$41.6 million (“Cash Cap”).

Once the cash cap is reached, the remaining value will be issued in SFR shares …... so punters may end up owning some Sandfire Stock rather than getting it all in cash …… X% buffer seems reasonable given SFR stock could drop under the deemed $6.78 offer price between now and settlement.

This is where I expect the arbitragers to come in and narrow the gap, if there is high probability the deal will close.

They can simply long MOD and short SFR to "lock in" the 8% (so the price fluctuation of SFR won't matter), which is kind of what happens today, 6% left now as of writing

 

[barney]

This is where I expect the arbitragers to come in and narrow the gap, if there is high probability the deal will close. They can simply long MOD and short SFR to "lock in" the 8% (so the price fluctuation of SFR won't matter), which is kind of what happens today, 6% left now as of writing

Yeah possibly right there "SR" …… Arbitrage trading is not my forte … so for me personally 6-8% is not enough buffer to warrant the extra steps required to extract the profit, but as you point out, it may be an attractive proposition for some. Being the EOFY might also have some effect on the willing participants (tax reasons) but that is just an assumption on my part. Cheers.

 

[System]

On October 30th, 2019, MOD Resources Limited (MOD) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between MOD and its shareholders in connection with the acquisition of all the issued capital in MOD by Sandfire Resources NL (SFR).