OZL - Oz Minerals

[Fung]

Not trying to be pessimistic but it really looks like disaster to me. To invest on this stock you may earn huge profit later but its just like gambling. Just my personal opinion

 

[oldblue]

Not trying to be pessimistic but it really looks like disaster to me. To invest on this stock you may earn huge profit later but its just like gambling. Just my personal opinion

I don't see it that way at all.
True, the SP may not go anywhere, except maybe down further for a while, but OZL has the cash to survive a fairly long downturn and the quality assets to prosper when commodity prices turn back up.
I hold a small parcel, won't be buying any more until things improve but am prepared to wait for an attractive buying opportunity when the trend turns up.

 

[johenmo]

....but OZL has the cash to survive a fairly long downturn...

AFR made the comment in yesterday's paper "..burning up the cash...". It seems they have a different view. I hope you're right.

 

[oldblue]

AFR made the comment in yesterday's paper "..burning up the cash...". It seems they have a different view. I hope you're right.

Let's hope so.
It's the rate at which the burning occurs that's critical. Gold, and to a lesser extent, copper, are still making reasonable money.

 

[oldblue]

I've just read that UBS Warburg have upgraded their recommendation on OZL to "Buy" with a target of $1-00.
I don't put a lot of store on what brokers say but at least it provides a counter view to the pessimists!

 

[johenmo]

I'm getting pessimistic re the recommendations. Brokers need more transactions to keep the cashflow going!!! I'll wait and see.

Incidentally - are they called brokers because that's they send you? Broke? LOL.

 

[Ashsaege]

back in the day when OXR was around $4 the Smart Investor magazine was saying its a great buy... so when it dropped to $3.80 i got on like donkey kong!

When the Ox changed into OZL it dropped down to a $1.50 and i got out... I wasn't happy at the time, but looking back now im glad i did.

I never thought it would get to 50cents, i might have to have a dabble soon, tho i will wait until the market starts improving... for the right reasons... which will probably be years from now!

 

[rub92me]

I'm looking at this today. If it holds above the lows of this morning I might buy in late afternoon with a stop just below today's low. Short term trade only, with a bit of luck we'll get a bit of a short squeeze on this.

 

[Sean K]

Unusual volume the last 3 days.

Would like tech/a's thoughts.

Is it supply? Demand? What's going on?

 

[Prospector]

This sucks, another margin call on a Director of OZL means he is forced to sell 1/3 of his holdings. Why isnt it illegal for Directors to use their holdings as collateral for margin calls. First MFS and now OZL.

 

[johenmo]

This sucks, another margin call on a Director of OZL means he is forced to sell 1/3 of his holdings.

The chairman and CEO (from memory) bought 150,000 shares between them.
Not a large amount for guys like them at this price, I guess.

I wonder if Mr Hegarty would consider returning his ex-gratia payment? But then, with the margin call - maybe he did!!!!!!!

There's a long uphill slope for them - but they are not alone. I can't help but feel my OXR would have fared better without the ZFX.

 

[prawn_86]

This sucks, another margin call on a Director of OZL means he is forced to sell 1/3 of his holdings. Why isnt it illegal for Directors to use their holdings as collateral for margin calls. First MFS and now OZL.

Perhaps it wasnt a margin call and he just wanted out because he has insider knowledge?

Seriously though, i do agree that director margin loans should be disclosed.

 

[electronicmaster]

I'll risk posting this.

OZ May Face Debt Refinancing Difficulty, UBS Says (Update1)

By Jesse Riseborough

Nov. 24 (Bloomberg) -- OZ Minerals Ltd., the world’s second largest zinc mining company, may have difficulty refinancing $600 million of debt next month as the global credit freeze restricts lending, UBS AG said.

“OZ Minerals is experiencing a squeeze in funds,” UBS analysts led by Sydney-based Jo Battershill said in a Nov. 21 report, downgrading the stock to “neutral” from “buy”. “The December time of the refinancing could potentially present problems in the current debt markets.”

Turbulence in global credit markets has locked corporates out of capital markets after financial companies booked more than $967 billion in writedowns and credit-market losses since last year. Melbourne-based OZ Minerals’ stock has slumped 80 percent this half, twice the decline in the price of zinc, prompting the company to review its operations.

“A worst case scenario would be to assume that the refinancing can not be completed, under which case the company would then have to repay the current debt from the existing cash balance,” UBS said. Paying debt from cash would consume almost all of OZ Minerals reserves, the analysts said.

OZ Minerals dropped 13 percent to 52 cents at the 4:10 p.m. Sydney time close on the Australian stock exchange, the lowest since Oxiana Ltd. bought Zinifex Ltd. to create OZ Minerals in July. UBS cut its price target to 65 cents from A$1.

OZ Minerals spokesman Matthew Foran declined to comment.

The company is likely to defer starting its $310 million Martabe gold and silver mine in Indonesia and its Dugald River project, UBS said. It may also delay planned expansions at Khanong in Laos and Golden Grove in Western Australia, it said.



Source is from bloomberg.com

I've hedged some of my cash in Silver Bullion.

 

[Uncle Festivus]

Let's hope so.
It's the rate at which the burning occurs that's critical. Gold, and to a lesser extent, copper, are still making reasonable money.

FWIW, I got burned on PAS just before the whole commodities boom started because of stupid directors betting the wrong way on futures & hedging, and I'm definitely not going to get caught holding the baby when the music stops again possibly?
What will be interesting is what will become of the gold assets of the old Oxiana? Somebodies going to get a bargain soon? Or are the gold sales enough to keep their heads above the high tide in the septic?

Is it worth me doing some research on this mob again ie someone got a handle on their gold portfolio worth, esp now AU gold approaching $1300 again?

 

[Sean K]

Cripes, deferring all supposed growth assets.

A shame about the Martabe gold project been deferred just when many believe gold is set to be well supported. Sort of doesn't make too much sense on that front.

Virtually going into care and maintenance...

Absolutely incredibly bad timing for this merger.

 

[aleckara]

Cripes, deferring all supposed growth assets.

A shame about the Martabe gold project been deferred just when many believe gold is set to be well supported. Sort of doesn't make too much sense on that front.

Virtually going into care and maintenance...

Absolutely incredibly bad timing for this merger.

How much has changed in 12 months for this stock? They are set to refinance their short term debt soon. From what I heard from someone else that looked at it (so DYOR) they have cash pretty close to the debt level meaning they are at a zero debt level position. While this is an ok thing compared to insolvency it shows the company doesn't really have any cash available to finance projects at all hence the care and maintenance (they have no cash to meet costs either so they have to downramp operations until they are profitable again). Credit is hard to come by these days; maybe the governments are sucking it up on bailouts.

 

[rub92me]

Looks like the actions announced today had been mostly priced in already; after an initial drop after the announcement it closed strongly with high volume in the last hour. The real test will be when they announce in some more detail what their cashflows are like/have been like with current zinc and copper prices. And of course how much (re)financing they can manage to secure in December.

 

[Prospector]

It was millions of shares, not the odd 150,000. Just hoping we will get some dividends out of this.

 

[subi1]

How much has changed in 12 months for this stock? They are set to refinance their short term debt soon. From what I heard from someone else that looked at it (so DYOR) they have cash pretty close to the debt level meaning they are at a zero debt level position. While this is an ok thing compared to insolvency it shows the company doesn't really have any cash available to finance projects at all hence the care and maintenance (they have no cash to meet costs either so they have to downramp operations until they are profitable again). Credit is hard to come by these days; maybe the governments are sucking it up on bailouts.

Does the fact that they have cash but are extending the loans suggest anything?

I was thinking it could be a good move because they can keep their powder dry and if any companies come up that are in trouble and have really good assetts it may leave OZL in a good position to acquire them.

I don't know whether my thinking is right here but it could be a possibility.

Also I was thinking that this cutback on expenditure and a bit of production could be good as it should drop the anticipated growth in supply and therefore might support prices in the medium term.

I think it is a pity about Martabe being put off but they must have done their sums and decided to wait

Good luck

 

[CAB SAV]

Looks like div's will go. Luv to see BHP pick it up now that RIO deal is off. Prominent Hill is only 130 klm from Olympic Dam.