OZL - Oz Minerals

[nioka]

Preopen trade again today. 2,143,795 for $6,893,629. That averages $3.215. If this trading is done on a margin loan the I can see these being resold today for less than half that price. These sales must account for part of the reason for a slump in the SP. I'm waiting for someone to come up with an answer to the question "how many OZL shares are subject to options and at what price?"

Options trading is a blight on the investment market the way it is conducted these days.

 

[PhoenixXx]

I noticed this preopen trade since May with about the same average price.
I do believe these sales must account for part of the reason for a slump in the SP.
I wish someone can come up with the answer......

 

[Sean K]

I noticed this preopen trade since May with about the same average price.
I do believe these sales must account for part of the reason for a slump in the SP.
I wish someone can come up with the answer......

Guys, CALL THE COMPANY!!!!

I'm not going to do it for you from Brazil.

The people who answer the phone are normally very helpful.

If they are not, put a strike against their name.

http://www.ozminerals.com/Contact.html

 

[PhoenixXx]

Hi Kennas,
thanks for your advice........
I already sent them a email....
just waiting for their reply....

 

[oldblue]

I've also emailed the company.
What's the odds on a reply along the lines of " We are not aware of any untoward activity and can't explain those strange preopen sales."
Or maybe I've become a bit cynical about this company.

 

[PhoenixXx]

I've also emailed the company.
What's the odds on a reply along the lines of " We are not aware of any untoward activity and can't explain those strange preopen sales."
Or maybe I've become a bit cynical about this company.

thanks for the info....
i'm still waiting for their reply.........
I also become a bit cynical about this company.....

 

[gxshen]

I've also emailed the company.
What's the odds on a reply along the lines of " We are not aware of any untoward activity and can't explain those strange preopen sales."
Or maybe I've become a bit cynical about this company.

Or the preopen sales are related to those directors, so they want to hide something by replying an email like this?

 

[PhoenixXx]

Zinc mine shut down a one-off
Tuesday September 9, 2008, 10:28 am

The Minerals Council does not expect other zinc mines to follow Intec's lead and suspend their Tasmanian operations.

The Sydney-based owners are closing the mine because of falling zinc and lead prices and rising production costs.

Almost all the mine's 50 workers are locals, and have been given two weeks notice.

Terry Long from the Minerals Council says other zinc operators are better protected because they are bigger and have other commodities.

"The companies in other parts of the state have weathered the troughs of cycles and peaks of cycles even in the past few years, so I don't expect any dramatic extrapolation of that through the rest of the industry," Mr Long said.

I posted the same quotation on INL but i have a different opinion on OZL. The fact that more small zinc miners closing down means less supply, and it's just the matter of demand. Let's just wait and see for more demand...OZL should be huge enough to avoid the closing of the mine. If the biggest zinc producer in Australia & 2nd biggest zinc producer in the world also close down...then...the rest is history

 

[oldblue]

Yes, I wouldn't expect Century to be closed, unless the PoZ gets a lot worse of course, but wouldn't be so sure about Rosebery which has only about an eighth the output of Century.
Wouldn't know about the respective costs of production - OZL's first quarterly report ( the latest) carefully omitted this information.

 

[doogie_goes_off]

Production cost at Rosebery has gone up considerably because it is now a deep operation, however the circuit at Rosebery produces a copper-gold concentrate and lead-silver that goes to SA (Whyalla?/Port Pirie?) and Zn that goes to Hobart for Electrolytic Zinc production (all from memory). Zinc production is cheap due to good deal with Tas gov't for cheap power. Rosebery has a large reserve still and is high grade. The focus will be on finding more near by = exploration cost but not at the expense of production at a profit, so I'd say Century was the more marginal but I haven't read latest Annual Reports etc. Rosebery also toll treats Bass Metals Que River ore making a profit on the side with no 'opex cost' except for running the mill.

Rosebery will continue to be profitable at lower Zn prices IMHO.

 

[oldblue]

Thanks, d-g-o. A lot more and better information than is coming out of OZL at present!
Meanwhile, no reply from the company but not holding my breath!

 

[oldblue]

Well, I received a reply from the company. It didn't address my question re the preopen trading but at least it shows that someone is awake at Head Office.
Or maybe, it was a computer - generated reply?

 

[oldblue]

I've been doing some more thinking about these preopen trades at "unreal" prices and have come to the conclusion that they must represent the exercising of put options that were written several months ago. The fact that they are at the same or very similar prices, but reported over a period of time would be consistent with that.
I'm not familiar with how such trades are recorded but it would make sense for them to be shown separately from the day's trading. Perhaps someone could throw some light on this?
Incidentally, I can recall a broker friend of mine telling me a couple of years ago that OXR was one of the most heavily traded options stocks after such favourites as BHP and RIO.

 

[Nicks]

I have 2 beefs with OZL.

1. Owen Hegarty's retirement benefits. WTF!? I thought being granted options X amount of time ago was the benefit. This is to encourage the performance relative to the SP. Now it seems that the options being granted to CEO's, MDs, Directors etc are only acceptable remuneration if the SP goes up. If it doesnt then we (the company) now pay them out cash instead retrospectively as they 'deserve' it as the options value are not reflective of their performance due to market movements. No im sorry, they deserve their options which is what agreement they took, and usually quite eagerly too as they genereally (especially in the previous bull market) were being given quite generous option arrangements to the detriment of us ordinary shareholders as it diluted the crap out of the SP. My shares were not worth much due to the same market movements. And anyway - how can they just do this (pay him out like that). It was clear from the previous AGM that shareholders were not happy with the Golden Handshake.

2. Just playing devils advocate here, and im not saying this will happen, but guys lets open our narrow eyes a bit. Despite what some on this thread have been ramping on about in the last few days about '3rd biggest miner so can't go wrong', well..... they are wrong. This SP could go to crap. The value of many of their assets has probably dropped significantly along with the commodities price (eg Zinc). About the only thing OZL has got good for it is its cash reserves which it probably should be using as a share buyback or (as many shareholders obviously wanted) - a fat dividend (look at ZFX SP dive after it cut its in half as people sold off, sure zinc price played a part but I think the SP took a dive before zinc started to drop from memory). But in their inifinite wisdom they decided against this as they want to use the cash and general market conditions to fund aqusitions on the cheap. They are cheap for a reason now. If world growth conitnues to slump and commodities are affected (I hope not) then OZL might find itself buying assets that continue to drop in value - a bit like buying OZL each time it drops to average out - except the average keeps going down. Diversification is fine but there comes a time when you need to focus on your core competencies and get that right. Sooner or later this could be called mismanagement.

 

[nioka]

I've been doing some more thinking about these preopen trades at "unreal" prices and have come to the conclusion that they must represent the exercising of put options that were written several months ago. The fact that they are at the same or very similar prices, but reported over a period of time would be consistent with that.
I'm not familiar with how such trades are recorded but it would make sense for them to be shown separately from the day's trading. Perhaps someone could throw some light on this?
Incidentally, I can recall a broker friend of mine telling me a couple of years ago that OXR was one of the most heavily traded options stocks after such favourites as BHP and RIO.

I agree with you there. There can be no other reason for trades at almost twice the trading price. The problem is that once bought they may then have to be resold at the current price adding to the decline in price.

Another3,238,322 today for $9,227,103, an average of $2.85.

 

[Nicks]

I agree with you there. There can be no other reason for trades at almost twice the trading price. The problem is that once bought they may then have to be resold at the current price adding to the decline in price.

Another3,238,322 today for $9,227,103, an average of $2.85.

Bingo. If they are obliged due to the option, then as soon as purchased they may already be under fniancial pressure to offload. All this contributing the the spiral downward.

I guess this is another fine example of complex trading instruments that are not flawless and can at times contribute to an ineffective market.

 

[Grinder]

For what it's worth. Got a mate who who knows a guy who works for em.... you know how it goes. Tells me the management practices leave alot to be desired & that apparently they still have'nt built the processing plant at the mine he works at, thousands of tons of ore to be processed sitting on the ground waiting.... but hey, who doesn't complain about their workplce

 

[lienad]

Poster from hotcopper



Here are my estimates on five of the projects based on recorded reserves (not resources) of a single metal.
the price for zinc is 77c I have used 70 cents
the price for copper is $3.10 I have used $2.50
the price for gold is $778 I have used $750
Rosebery zinc AUD$ 0.14
Century zinc AUD$0.26
Golden Grove zinc AUD $0.13
Sepon copper AUD$0.79
Sepon gold AUD$0.01
Cash AUD$0.36
TOTAL $1.69
As you can see this figure does not include Prominent Hill or Avebury. Prominent Hill could easily add another $1 to the valuation.
So what you have then is five projects of say more than 10, each being valued on the basis of a reserve and a single selected metal.
Eg golden grove has gold, silver, copper, zinc and lead.
Only Golden Grove’s reserves of zinc were looked at.
If resources were used the amount of metal might be twice as big even four times as big.
The reason I didn’t use the resource figure is because I wanted to make the most conservative estimate possible to show the least value possible and what you could be most definitely be assured of getting.

How the figures were derived

All investments are valued on the basis of earnings going forward.
Each project is valued on the basis of reserves which are then discounted.
Profit is worked out by making an estimate for the long term price of the metal minus the cost of producing the metal in each project.
OZL has released the following figures
Rosebury (zinc) US$0.27/lb
Century zinc (incl. pre strip) US$0.63/lb
Golden Grove zinc US$0.39/lb
Sepon copper US$0.95/lb
Sepon gold US$537/oz

http://www.ozminerals.com/Media/doc...on-cd2b129c-44b1-46a1-8bd5-45fc9b6973a9-0.pdf

The profit is then multiplied by the discounted quantity of the reserve.

Here are two examples of how the calculations were derived at Sepon copper and Century zinc

Sepon Copper

copper

Reserves : .79 Mt
790,000 tonnes
1 tonne = 2204 lbs
1,741,160,000 lbs
discount 10% = 174,116,000
quantity = 1,567,044,000lbs


spot price US$ 3.18

long term price US $ 2.50
cost $0.95
profit $1.55

1.55 x 1,567,044,000 = $2,248,918,200
10% goes to Lao Government
$224,289,182

$2,204,629,018
no of shares 3,261,092,506
US$0.68
Convert to AUD (US$0.85)
1.17 x .68 = AUD$ 0.79

Century zinc
46.2 tonnes x 11.2% = 5.1744
1 tonne = 2204
11,404,437,760

10% discounted
-1,140,437,760
10,263,939,840 lbs

long term price for zinc = 70 cents
cost = 63 cents
profit = 7 cents

total profit = $718,475,788
no of shares = 3,261,092,506
per share = US$ 0.22
US$0.85/ AUD$ 1
AUD $ 0.26


Cash
Cash = $1,173.5
No of shares = 3,261,092,506
Cash per share = AUD $.36

You could get even bigger numbers if you based the calculations on resources. Resources are often twice as big as reserves. Sometimes four times the number.
Pro forma OZ Minerals Group Reserves 1*
OZ Minerals
Zinc (Kt) 6,235.0
Copper (Kt) 1,878.0
Gold (Moz) 4.3
Silver (Moz) 103.4
Nickel (Kt) 56.1
Lead (Kt) 696.4

Pro forma OZ Minerals Group Resources 1,2*
OZ Minerals
Zinc (Kt) 17,807.6
Copper (Kt) 4,815.7
Gold (Moz) 16.0
Silver (Moz) 407.8
Nickel (Kt) 792.0
Lead (Kt) 2,599.1
Cobalt (Kt) 47.0

 

[noco]

Has anyone taken note that the CEO (Andrew Michelmore) has this week purchsed 60,000 shares @ $1.50 per share?

He obviously must have some faith in the future of OZL to have invested such an amount.

Does anybody agree?

 

[michael_selway]

Has anyone taken note that the CEO (Andrew Michelmore) has this week purchsed 60,000 shares @ $1.50 per share?

He obviously must have some faith in the future of OZL to have invested such an amount.

Does anybody agree?

Hm techincally its still goign down though, so it maybe risky to jump in?

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 18.8 10.8 25.4 29.1
DPS 8.0 9.5 10.0 10.0

Date: 22/8/2008
Author: Barry FitzGerald
Source: The Age --- Page: B3
Shares in Australian-listed OZ Minerals fell sharply on 21 August 2008, afterthe group released the interim profit results of Zinifex. Zinifex - which mergedwith Oxiana to form OZ Minerals earlier in 2008 - made a loss of $A1.4m for thefirst half of 2008, while the value of Tasmania's Avebury nickel mine andtenements in Canada were written down by $A602m. Meanwhile, Oxiana has posted anunderlying profit of $A72.3m for the half-year, down from $A178.9m previously.OZ Minerals shareholders will receive an unfranked dividend of $A0.05 per share.Its stock eased $A0.145 to $A1.685 on 21 August

Date: 22/8/2008
Author: Michael Vaughan
Source: The Australian Financial Review --- Page: 56
OZ Minerals revealed a $A500,00 loss for the six months to June on 21 August2008. The Australian mining company announced underlying net profit excludingdiscontinued operations, asset valuation changes and other one-off charges of$A70.9 million, while EBITA reached $A332.5 million. CEO, Andrew Michelmore,said the result was not indicative of the newly merged company'sperformance and was affected by the July 2008 integration of Zinifex and Oxiana

Date: 22/8/2008
Author: Sarah-Jane Tasker
Source: The Australian --- Page: 32
OZ Minerals reported a $A543 million loss for the six months to June on 21August 2008. CEO, Michael Michelmore, said the company had abandoned plans toundertake a share buyback and had decided to instead focus on "a number oftangible opportunities". Shares in the Australian miner fell 7.92 per centto $A1.68 on the news, although the results did not represent the consolidatedaccounts of Zinifex and Oxiana