NHC - New Hope Corporation

[laurie]

The world's biggest miner BHP Billiton Ltd says it has struck a deal to acquire 100 per cent of the New Saraji project from New Hope Corp Ltd for $2.5 billion cash and $1.2 billion worth of BHP shares in a 50/50 joint venture with Mitsubishi Corp.

"This acquisition is consistent with our strategy to accelerate growth in long life, low cost natural resources with a focus on delivering shareholder value," said BHP Billiton coal president Dave Murray.

New Saraji is an undeveloped metallurgical coal resource located next to the joint venture's Saraji mine near Dysart in Queensland's Bowen Basin.

"New Saraji has extensive high quality metallurgical coal resources," said Mr Murray.

"Subject to the results of further resource exploration and evaluation program to be undertaken by BMA, New Saraji has the potential to be developed into a large scale, high quality metallurgical coal operation."

"New Saraji could also potentially deliver significant synergies due to its proximity to BMA's existing Saraji mine," Mr Murray said.

The acquisition is likely to be scrutinised by regulators and third parties, BHP said.

Before the announcement, BHP shares closed down 4.4 per cent at $37.55

Fantastic news $$$$$$$$$$$

cheers laurie

 

[grace]

Laurie, don't follow, but that price is pretty amazing. Is this one of the unloved holdings that New Hope picked up many years ago?

I guess coal stocks will have a nice run tomorrow then!

 

[laurie]

Laurie, don't follow, but that price is pretty amazing. Is this one of the unloved holdings that New Hope picked up many years ago?

I guess coal stocks will have a nice run tomorrow then!

yeh grace amazing right out of left field interesting on movement tomorrow as you said on coal may even see a trading halt!

cheers laurie

 

[michael_selway]

The world's biggest miner BHP Billiton Ltd says it has struck a deal to acquire 100 per cent of the New Saraji project from New Hope Corp Ltd for $2.5 billion cash and $1.2 billion worth of BHP shares in a 50/50 joint venture with Mitsubishi Corp.

"This acquisition is consistent with our strategy to accelerate growth in long life, low cost natural resources with a focus on delivering shareholder value," said BHP Billiton coal president Dave Murray.

New Saraji is an undeveloped metallurgical coal resource located next to the joint venture's Saraji mine near Dysart in Queensland's Bowen Basin.

"New Saraji has extensive high quality metallurgical coal resources," said Mr Murray.

"Subject to the results of further resource exploration and evaluation program to be undertaken by BMA, New Saraji has the potential to be developed into a large scale, high quality metallurgical coal operation."

"New Saraji could also potentially deliver significant synergies due to its proximity to BMA's existing Saraji mine," Mr Murray said.

The acquisition is likely to be scrutinised by regulators and third parties, BHP said.

Before the announcement, BHP shares closed down 4.4 per cent at $37.55

Fantastic news $$$$$$$$$$$

cheers laurie

Hey sounds good is there a link to this article?

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 8.6 10.8 23.5 33.9
DPS 7.6 6.8 15.7 16.7

thx

MS

 

[laurie]

http://www.businessspectator.com.au...JV-to-buy-Qld-coal-project-GMDXN?OpenDocument

cheers laurie

 

[YOUNG_TRADER]

Hey Laurie,

Congrats mate! Just goes to show Coal is still one of the main places to be

Hey Grace you don't miss anythign these days do you? Your onto everything, I'll have to keep an eye on you, it'll be much easier than keeping an eye on all the anns as you seem to sniff out all the good ones

Will be interesting to see the effect on Coal companies tomorrow, my LOD could use some love sigghhhhhhhhh

btw am I missing something here? 800M shares or so at $4.5 say = $3.6B, BHP are gonna pay them $5Billion? thats like $6.25 from this one transaction alone!!!!!!!!!!

 

[YOUNG_TRADER]

lol maybe time for bed,

BHP are gonna pay $3.7Billion made up of $2.5Billion cash + $1.2Billion in shares

New Hope NTA Approx = $4.50 so basically at current levels other projects are free!


Again given its late I've probably made another error, doh! doh!

 

[laurie]

Stuff my dog!! what does it take to move this up
BHP are gonna pay $3.7Billion made up of $2.5Billion cash + $1.2Billion in shares

yet it has rallied back to open price!

cheers laurie

 

[michael_selway]

Stuff my dog!! what does it take to move this up
BHP are gonna pay $3.7Billion made up of $2.5Billion cash + $1.2Billion in shares

yet it has rallied back to open price!

cheers laurie

hm i have a feeling that maybe BHP bought this project on the cheap, based on current prices, in groudnvalue is worth alot more than the $3.7Billion they paid for this, anyoen agree or disagree?

thx

MS

 

[grace]

Do you realise that BMA gave the lease up in 2000 because it was in excess of requirements, only to buy it back 8 years later for Billions.

 

[YOUNG_TRADER]

Do you realise that BMA gave the lease up in 2000 because it was in excess of requirements, only to buy it back 8 years later for Billions.

Really? wow how much did they sell it for? or did they just relinquish it back to the Qld Govt?

If they just relinquished it someone needs a big slap on the wrist

Amazing how times change, once avg projects become mega NPV prime projects all because of the Coal price going through the roof,

I expect to see more deals like this in the Coal and also Iron Ore sector

 

[Dutchy3]

That sell volume back in the first week of July 08 will take a bit to work through. If it can punch back through 5.50 - 5.60 smartly ... next few weeks ... volume will have to be heavy.

 

[grace]

Really? wow how much did they sell it for? or did they just relinquish it back to the Qld Govt?

If they just relinquished it someone needs a big slap on the wrist

Well, yesterday's CM says

"Meanwhile, as BMA was finalising the purchase of New Saraji - which it ironically relinquished in 2001 after deciding it was surplus to requirements..."

The big mining players spruke of predictions for decades, yet this is a prime example of BMA (BHP Mitsubishi Alliance) not getting it right, within a 7 year timeframe, and costing them 3.7 billion! Ouch.

 

[michael_selway]

Well, yesterday's CM says

"Meanwhile, as BMA was finalising the purchase of New Saraji - which it ironically relinquished in 2001 after deciding it was surplus to requirements..."

The big mining players spruke of predictions for decades, yet this is a prime example of BMA (BHP Mitsubishi Alliance) not getting it right, within a 7 year time frame, and costing them 3.7 billion! Ouch.

Yep i do see the irony , however wait another 7 years, that $3.7 billion may turn into double or triple+ depending on whether current coal prices can hold up for those years or be higher

thx

MS

 

[laurie]

This is turning to be a cash cow for me as far as dividends are concerned 3.5c normal and a special .8c on top of that making a interim payment of .115c

cheers laurie

 

[michael_selway]

This is turning to be a cash cow for me as far as dividends are concerned 3.5c normal and a special .8c on top of that making a interim payment of .115c

cheers laurie

Hm not bad

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 8.6 10.8 32.0 34.5
DPS 7.6 5.0 17.5 19.1

Outlook
The sale of the New Saraji Project further strengthens the balance sheet after the expected return
of dividends to shareholders. New Hope is investing in the necessary infrastructure to support
the expanded New Acland operations via the Wetalla pipeline and the expanded QBH operations.
The re-commissioning of the Jeebropilly Mine and the possible extension of the New Oakleigh
Mine will add to our export production in the next few years. The combined total coal production
for the coming year is likely to be in the order of 4.9 million tonnes. New Hope has well priced
contracts to support the increased production.
The Lenton Project (coking and thermal coals) will be further evaluated to determine the best
development path during the next few years. A number of alternative strategies are being
evaluated with port capacity being a possible development constraint before 2010.
The exploration portfolio remains strong with good indications of additional coal resources which
could be suitable for export and or conversion fuels in the Downs Project. Bee Creek remains a
region of special interest for coking coals and will be drilled during the next 12 months as drilling
rigs become available.

If coal conversion trials prove successful, subject to engineering and feasibility studies, New
Hope is well positioned to economically deploy these technologies to shareholders advantage.
A very strong balance sheet allows New Hope to plan its future projects with confidence and the
company is well positioned to take advantage of any acquisitions which allow it to leverage its
strengths.
Capital Management
Significant earnings growth should continue in the 2009 financial year as coal prices are expected
to remain strong, supported by the company's incremental mine expansions and extensions.
Operating profit after tax for 2009 is likely to be in the range of $125 million to $150 million,
subject to the continuation of the strong international coal price and the volatility of the A$/US$
exchange rate and any other unforseen circumstances.
Proceeds from the $2.45 billion sale of the New Saraji Project have been placed on deposit with
major Australian banks. Interest revenue earned on these term deposits will add significantly to
New Hope’s 2009 profit result and will be in addition to the projected operating profit for 2009
mentioned above.
A special dividend of approximately $600 million will be paid to shareholders in conjunction with
the final 2009 year dividend in November 2009.
The timing of this special dividend coincides with income tax on the sale of the New Saraji Project
of approximately $725 million being payable at the time and lodgement of the Company’s 2009
financial year tax return in late calendar year 2009. This will allow the special dividend to be fully
franked in the hands of the shareholders.
“In deciding on paying a special dividend next year, the board has taken into consideration the
company’s ongoing capital requirements and the need to continue to actively pursue new
investment opportunities in the energy sector,” Mr Millner said.

thx

MS

 

[Nero64]

Hey did anyone do the math after its half yearly report.

It is sitting on 2.7Bill in cash.

That's $3.30 per share.

Holy crap it's way undervalued.

I'm not saying it will take off any time soon but long term it's Gold

 

[imajica]

from the media release today:

Directors have declared a final ordinary dividend of 4.5 cents per share and a special dividend of
72.75 cents per share. Both of these dividends are fully franked, and will be paid on 10
November 2009. The record date for both dividends is October 26, 2009.


shares closed today at $5.76

77 cent fully franked dividend.

 

[Julia]

I expect just the announcement of such a high special dividend will boost the SP. Thanks for that imajica. Very impressive. Have been eyeing the company anyway.

 

[imajica]

I always find it quite amusing that a quality stock like New Hope gets barely any interest from ASF'ers. If people missed the announcement yesterday, let me spell it out for you again

current stock price : $5.80

paying a fully franked dividend (goes ex-dividend mid October) - about 77c

huuuuuge yield

with about 3 weeks before it goes ex-div we should see a nice run in the share price

apart from the meaty dividend - the company has great management, they continue to expand their operations and their profits -