SRL - Straits Resources

[Kremmen]

The figures from the latest investor presentation today:

Ord shares: 234m
Conv notes: 55m ($79.8m)

Cash 30/04: $296m (+ $34m Varomet)
Debt 30/04: $79m (+ 86m Varomet)
Tranche 2 payment to come: $157m
Dividend to come: $117m (30c/share + 20c/share)
Cash available post dividends: $336m (= $1.44/share)

 

[MACCA350]

The figures from the latest investor presentation today:

Ord shares: 234m
Conv notes: 55m ($79.8m)

Cash 30/04: $296m (+ $34m Varomet)
Debt 30/04: $79m (+ 86m Varomet)
Tranche 2 payment to come: $157m
Dividend to come: $117m (30c/share + 20c/share)
Cash available post dividends: $336m (= $1.44/share)

Nice, that would be over 30% return on my buy in price
I wasn't expecting a dividend from SRL as there's no previous dividends shown on their ASX page.

They look healthy to me, maybe I should pick up some more

cheers

 

[prawn_86]

Yep at these prices a 50c div is 29% yield. Plus they are only trading at 30c above cash backing after a div that size.

Although they have said they are only considering it, nothing concrete at the moment.

Hmmm.... do i, dont i?

 

[Sean K]

The market finally looks like it's toppling over to me.

The economic news out last night was no worse than any other night the past few months, but the punters decided it was too bad. lol. It was just time for a correction that's all.

SRL has had a great run, but it will fall with the rest of the market, and here are some pretty blue lines to make technical decisions over.

My breakout line was at $1.50 ish, which hopefully is support. If the market completely crumbles to further lows, then forget that.

 

[jman2007]

SRL has had a great run, but it will fall with the rest of the market, and here are some pretty blue lines to make technical decisions over.

My breakout line was at $1.50 ish, which hopefully is support. If the market completely crumbles to further lows, then forget that.

I agree,

I have been watching SRL with interest for some time, since it started its run from about 1.20'ish actually. I picked up a medium-sized package just before close yesterday, DOW was up marginally overnight but I get the feeling I'll need to watch this stock carefully. Like you said, if it falls through 1.50 I will be out.

 

[Sean K]

Like you said, if it falls through 1.50 I will be out.

Some more S&R appearing here, which is slightly alingned to the overall market. There's some H&Serish pattern appearing in a few stocks and represented in the XAO. Need the support to hold, or things look ordinary for the short term. Downward volume doesn't look troubling here. For me, a break of $1.60 is concerning, and like you $1.50 is keep powder dry.

 

[Sean K]

The H&S is still on the cards. Fingers crossed she holds up.

What's the current cash backing?

It was about $2.50 ish I thought.

Surely limited downside if that's the case, but it did fall 60c or something previously ....

 

[happytown]

ann out, straits grants option to finders resources to purchase the whim creek sx-ew plant any time between 01/10/09 - 31/12/09 for $5M (plus gst) in finders shares (plus 724,638 shares as option fee)

fnd shares currently .355 (approx $250,000 option fee)

cheers

 

[Sainter]

And what it also signifies is that they have no plans for SX-EW processes anytime soon. After Giri, Nifty and Whim Crk, they had developed a good knowledge of that process, but they are walking away from it. At least they are selling it to a company in which they will have a decent shareholding, so they have not fully lost touch with it I suppose.

 

[jman2007]

The H&S is still on the cards. Fingers crossed she holds up.

What's the current cash backing?

It was about $2.50 ish I thought.

Surely limited downside if that's the case, but it did fall 60c or something previously ....

Tbh I can't see SRL rising to its former glory as an $8 stock, although I would be happy if we saw $2.50 by the end of the calendar year. Probably the main reason I was drawn to them was their superior cash position, and the potential for a divy payment through the PTT deal.

The non-coal assets look to be a little average to say the least, it's difficult to see how Hilgrove and Tritton will turn into major cash-cows for the company given the delays, bottlenecks with the mining and cost blowouts. Still, they look to be important operations for the company to maintain a presence in Australia.

I think cash backing p/s is about AUS $1.25, probably a reasonable case for their assets being currently undervalued in the market in that case.

 

[Sean K]

Tbh I can't see SRL rising to its former glory as an $8 stock,

No, looked to be overdone there in hindsight. There were a few running too far away during the bubble. It may come down to what they do with their balance sheet. What assets are they going to pick up to further grow the company. I suppose they've been waiting to see how the market unfolds but on the other hand may have missed some good opportunities. Check out BRM, SRL! You need some IO in the portfolio and it's cheap as chips!! Maybe PRU for some gold!!! lol Maybe there'll be another chance when the market finally corrects back again?

Lots of things happening on the chart. The potential H&S identified earlier didn't activate and it's continued to hold support lines. Some minor horizontal support at $1.75 now and with the uptrend line makes it pretty strong. After that $1.60 which I see as critical. Moving down from here to that area puts a potential double top in play. The intraday selling over the past week isn't comforting and with the market due for a pull back some day. On the other hand 'stronger forever!' TH

 

[Sean K]

Finished very strongly today at $1.95 up through the top of the potential double top, so that might be off the cards. Not completely out of the woods, but probably unlikely now which is good. Longer term chart and check all the resistance between here and $4.80. Zip!! Nada! Not saying it's going to run back to there, there's just no technical barriers at this point. More will unfold on the way of course.

 

[jman2007]

There was some very strong buying today, what was especially pleasing imo was that the intraday selloff around $1.90 didn't occur, like you mentioned above kennas. So perhaps the day traders have finished playing games with this stock for now? A strong night on the DOW could potentially see us looking at a $2 finish for the week. Yes I can't help but think that a few golden opportunities may have slipped through their fingers, look at CFE picking up the assets of the defunct CopperCo for a pittance! On the other hand, the downside for SRL should be limited by our friend, aka cash

 

[Kremmen]

Straits Minerals has just paid $3.5m for 10m shares of ADU, so they can fund gold exploration in Ghana.

 

[J.B.Nimble]

Considering SRL was well and truly derisked with the partial sale of the coal assets it has been remarkably slow to return to a more reasonable value. It has been a real opportunity cost holding these while others have tripled and more in the time that it took SRL to put on 50 or 60%, but finally patience seems to be being rewarded. Still trading at a significant discount to cash and asset backing, but not for much longer I hope...

 

[jman2007]

Considering SRL was well and truly derisked with the partial sale of the coal assets it has been remarkably slow to return to a more reasonable value. It has been a real opportunity cost holding these while others have tripled and more in the time that it took SRL to put on 50 or 60%, but finally patience seems to be being rewarded. Still trading at a significant discount to cash and asset backing, but not for much longer I hope...

Tbh J.B I'm not sure that the market has entirely come to terms with understanding what SRL is all about, or myself for that matter! The key to unlocking its potential value may come in SRL acquiring a substansial stake in a up and coming project, or picking up a defunct operation at a firesale price. As I said previously, the non-coal assets look pretty ordinary, and realising their true value may be difficult task for SRL.

The ADU option is an interesting one, I remember having a look at that mob a long time ago, but for some reason or other they didn't fit the bill for me. I wouldn't really call it taking a strategic stake, more of a "dip the toe in" to test the temperature, but an interesting choice nonetheless.

 

[Sean K]

HUH!!



WTF are SRL doing with these handmeouts to junior crappo companies who obviously can't convince a bank to led them money?

You are not an investment bank SRL, you are a miner!!!!

Or, WTF!!!!

(Wonder who is old mates with an SRL board member)

AND, Saracen only just did a bloody raising!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


Equity Raising

The Directors advise that the Company has requested the Australian Securities Exchange (ASX) to grant a halt on the trading of the Company’s securities prior to the commencement of trading today.

The trading halt was requested pending the outcome of a placement of ordinary shares in Saracen (Placement) to institutional/sophisticated investors. The trading halt is requested until the earlier of the outcome of the Placement is announced to the ASX and the commencement of trading on Monday 22 June 2009.

The Company expects to raise no less than A$20 million from this placement. The Directors are also pleased to advise that Straits Resources Limited has agreed to subscribe for approximately A$3 million worth of ordinary shares, or approximately 5 percent of the Company’s post-placement issued capital.

 

[Kremmen]

WTF are SRL doing with these handmeouts to junior crappo companies who obviously can't convince a bank to led them money?

That's not necessarily fair. As things have been recently, plenty of good companies can't convince a bank to lend them money. Of course, you may be right, but SAR looks like it might have prospects.

SAR has had a pretty stable price recently, nearish its year high. They claim they will be a gold producer by Mar qtr 2010, with costs of A$640/oz. Presumably SRL will get a good discount on their placement, so it may be a good investment.

 

[jman2007]

Interesting aticle in 'The Australian' business section from a few days ago about SRL, it might help shed a bit of light on where SRL might be heading over the next couple of years... if the title of the article "Cashed-up miner gets the gold bug" is anything to go by

http://www.theaustralian.news.com.au/business/story/0,,25667734-18261,00.html

 

[Sean K]

I'm happy for them to buy some quality gold assets, but I think buying 5% of this and 5% of that will just keep them under the radar and undervalued. Why not just buy the whole operation and be known as a gold miner instead of an investor. I've seen too many companies with part ownership in projects trade well under NTA and never be fully valued. I hope they're not trying to turn themselves into an LST. So, SRL, go and buy AZM with 1m oz au for about $40m, and then PRU with 7m oz au for about $400m, and I'll be happy.