TTY - Territory Resources

[prawn_86]

Dont forget TTY also own just over 7% of India Resources (IRL).

Personally I am no longer comfortable investing into MK companies, however I do own IRL, but would not buy more...

 

[SenTineL]

i think i'm comfortable with the idea of a diversified mining company in TTY.

like the old saying of not having all your eggs in one basket i suppose

 

[nioka]

i think i'm comfortable with the idea of a diversified mining company in TTY.

like the old saying of not having all your eggs in one basket i suppose

Diversified mining company yes. (with emphasis on MINING).
Diversified spec company NO NO NO.

Too many companies with good income keep spending all that income looking for bigger and better things and end up with nothing. The directors and management get paid regardless of the final result.

 

[Rimtalay]

noika, do you really think that Richard Elman (CEO) of the Noble Group and Michael Kiernan are only thinking about a few $$$ in directors fees.
THINK AGAIN !!!!
What is your knowledge of future zircon sales and demand into China.
IE. Only 12 months ago manganese was selling for US$2.20/dmtu and now Korean companies are paying up to US$23/dmtu, most shareholders didn't have a clue when Mn went up 130% in 6 weeks in May - June 07.
Did you realise that Asians don't like carpet in their houses? Think of 1.3 billion people with glossy, shimmering tiles on their floors, or the gleaming new bathroom sink and toilet. You need iron ore to build the building BUT you'll need zircon to fit it out.
The quicker that TTY mops up OLY and then MAL the better.
They are not doing it for FUN !!!

 

[Dukey]

noika, do you really think that Richard Elman (CEO) of the Noble Group and Michael Kiernan are only thinking about a few $$$ in directors fees.
THINK AGAIN !!!!
What is your knowledge of future zircon sales and demand into China.
IE. Only 12 months ago manganese was selling for US$2.20/dmtu and now Korean companies are paying up to US$23/dmtu, most shareholders didn't have a clue when Mn went up 130% in 6 weeks in May - June 07.
Did you realise that Asians don't like carpet in their houses? Think of 1.3 billion people with glossy, shimmering tiles on their floors, or the gleaming new bathroom sink and toilet. You need iron ore to build the building BUT you'll need zircon to fit it out.
The quicker that TTY mops up OLY and then MAL the better.
They are not doing it for FUN !!!

TTY has abandoned compulsory takeover of OLY - achieving 67.4% of OLY shares. 90% were needed for comp takeover.

(sees story on www.wabusinessnews.com.au - sorry cant post exact link - keyboard dodgy!??)

Not sure of the implications of this for TTY and its shareholders. Must admit - I, like nioka am a bit worried by the spending spree. ??

 

[Rimtalay]

Seems to me everyone thinks they know more how to manage TTY than the management. Why is everyone so worried, they are building a company for the future.
If you're all so worried sell out.
I'd be more worried if they weren't using this market volitility to their advantage.

Mineral sands’ time comes again
By Tim Treadgold



PORTFOLIO POINT: When Chinese builders need paint and tiles, expect a jump in demand for raw materials used in both.


No sector of the mining industry has been a bigger disappointment over the past five years than titanium minerals. But a series of recent corporate deals, and confident assessments of future demand, point to titanium and zircon catching a second wave of Chinese commodity demand.

The most optimistic view of the outlook comes from Rio Tinto, one of the world’s biggest producers of titanium minerals, which are largely used to make pigment for paint, and zircon, which is used to make tiles and other ceramic products.

The most pessimistic assessment comes from the Kolsen syndicate led by Australia’s second richest man, James Packer, which lost patience and earlier this month sold most of its strategic, but non-performing, investment in Iluka Resources, Australia’s biggest titanium minerals producer.

For investors, such diverging views cloud an assessment of whether a sector that completely missed the resources boom first time around might catch it this time – or whether there are better profits to be made elsewhere.

Non-believers in titanium minerals (or mineral sands, as they were once called) will not be swayed by Rio Tinto’s bullish projections about Chinese demand for paint and bathroom tiles. Of course there is a chance that Rio Tinto is simply “talking up” a business unit as it fends off BHP Billiton’s takeover advances.

Believers, especially those swayed by an argument that China’s “inward” focus on more and better housing for its workers, as the global economy sputters under the weight of the US recession, will need to dust off their titanium and zircon files because there are not many ASX-listed entry points into what has traditionally been a “late cycle” resources play.

Best bets are:

Iluka. Despite the sell-off by the Packer-led Kolsen syndicate, and repeated disappointments, Iluka remains the cleanest entry into the sector. This time it has the benefits of a more clearly focused management team, a pipeline of new projects, and the potential for a surprise bonus from an obscure iron ore asset, a 1.25% royalty paid by BHP Billiton from its Area C mines. Iluka received about $20 million last year from the royalty and is pondering whether to keep it, sell it, or pass it over to shareholders as an in specie asset distribution.
Gunson Resources. It has rivalled Iluka as an investment dud but recently announced a major increase to reserves at its proposed Coburn project in WA, which is being developed with Chinese assistance.
Matilda Minerals. Developer of a small mine in the Tiwi Islands off the Northern Territory, but spreading its interests to Queensland’s Cape York, and at the centre of a corporate move by the former chief executive of Consolidated Minerals, Michael Kiernan.

Other players in the titanium/zircon space with the potential to benefit from the forecast increase in demand from China are: Australian Zircon, which started production at its Mindarie mine in South Australia late last year; Bemax Resources, which is effectively a mini-Iluka with assets in WA and the Murray Basin off western NSW and northern Victoria; and a curious new entrant in the game, Epsilon Energy, which started life as a uranium explorer but last week added zircon and titanium to its search inventory.



Before looking at the “pro” side of the titanium/zircon argument, it is important to consider why the Kolsen syndicate sold two-thirds of its stake in Iluka, crystallising a loss estimated at $20 million. For a syndicate that includes some of Australia’s smartest business people this was a monumental admission of failure, which could reasonably be interpreted as the ultimate vote of no confidence in Iluka and the titanium business.

For James Packer, the Iluka exit was most probably an exercise in cleaning up a piece of unfinished business inherited from his father, the late Kerry Packer. In mid-2005, the Packer family provided about half of the $120 million required to buy a 7.2% stake in Iluka. Money also came from investment bankers Mark Carnegie and John Wylie, and mining investor Robert de Crespigny. (To read more on de Crespigny's latest venture, see ‘Mr Gold’ rolls up his sleeves).

Kerry Packer’s death six months after the Kolsen raid probably signalled the death of the syndicate, too, but it took until Iluka launched a $350 million rights issue last month for Kolsen to find a way to orchestrate the sell-down of two-thirds of its Iluka shares at an estimated $4.10 a share, about $1 less than its rights-issue discounted entry price of $5.06.

Since the Kolsen sell-off, Iluka shares have retreated below the $4 mark, with recent trades around $3.91. As well as being hit by production declines and rising costs at ageing mines in WA, Iluka’s exports have been hammered by the rising Australian dollar.

Iluka chief executive David Robb believes the worst is over for his company after a big capital raising and the re-financing of debt – two significant achievements in difficult markets

“We’ve got the wind at our backs,” Robb told EurekaReport. “Clearly the recapitalisation, both the debt re-finance and the rights issue, have been pivotal for us.”

Funds raised will be used to develop Iluka’s next generation of mines in the South Australian section of the Eucla Basin near Ceduna, along with other new projects in the Murray Basin, and to eke out residual resources at its mines in WA.

Robb, a former senior executive with Wesfarmers, has been instrumental in applying stricter financial disciplines at Iluka, and in focusing the business on generating shareholder value, a hallmark of his previous employer.

He argues that titanium and zircon will be beneficiaries of the inward-looking phase of China’s economy. “We are traditionally a late-cycle beneficiary of economic growth,” he says. “Demand for our products is more consumer driven, and that’s accelerating in China.”

Robb acknowledges that Iluka was “not a beneficiary” of the first wave of China’s rapid growth which was focused on infrastructure projects such as ports, roads and power. “Are we about to catch the second wave? In my opinion, yes,” he says.



Robb is not alone. He's flanked by Michael Kiernan, one of the most prominent entrepreneurs in the mining industry. Kiernan has been busy assembling a portfolio of iron ore and gold assets since departing Consolidated Minerals and has recently added titanium and zircon to his shopping list. Through Territory Resources he has snatched a 34% stake in Matilda Minerals, and is wrapping up a takeover bid for an Indonesian-based (but Australian listed) titanium miner, Olympia Resources, having gained a 65% stake in his target. (To read more on Kiernan's resource portfolio, see New kids on the gold block.)

“It’s all about China,” Kiernan says. “Titanium and zircon really are the second wave, and to understand that you only have to look at the amount of residential development taking place across the country.

“Infrastructure was the first wave. Now the move is into urbanisation as 300 million people move into China’s cities. Every one one of those people will need tiles for their bathrooms and paint for their walls.”

Kiernan and Robb could have been reading directly from a March 13 titanium minerals review by the head of the Rio Tinto Iron and Titanium division, Harry Kenyon-Slaney.

Graphs used by Kenyon-Slaney show that Chinese use of pigment is far behind that of the US. But, more interesting than a direct comparison of China against the US is to measure China’s consumption of steel, copper, aluminium or nickel against per capita use in the US. This shows steel use at close to 80% of that of the US, copper, nickel and aluminium at close to 50% and pigment use at around 10%.

The key message from the Rio Tinto view is that pigment use in China is set to soar, with projected annual consumption growth running at 15% for at least the next four years.

The newest boy on the block (but from an old mining family) is Matt Gauci, managing director of the uranium explorer Epsilon Energy. He says he had added mineral sands to the search list because of the outlook for zircon.

Gauci, a nephew of former MIM Holdings chief executive Vince Gauci, says Epsilon has renegotiated a farm-in agreement with its parent company, Heron Resources. The original deal on exploration tenements near Balladonia, on the WA side of the Eucla Basin, had only been for uranium. It now includes mineral sands.

“Zircon prices have been on the rise for five years and the outlook is for much higher prices in the future,” Gauci says. “The reports we’ve received indicate a looming shortage, especially of zircon, and that means strong demand.

Five years of disappointing profits have suppressed most investors’ interest in the titanium minerals and zircon business, and ground down the enthusiasm of the big guns behind the Kolsen syndicate who raided Iluka three years ago.

The question now is whether Kolsen sold too soon and whether a second wave of demand for different mineral products is building in China.

 

[Dukey]

Seems to me everyone thinks they know more how to manage TTY than the management. Why is everyone so worried, they are building a company for the future.
If you're all so worried sell out.
I'd be more worried if they weren't using this market volitility to their advantage.
.

Well - everyone is entitled to an opinion Ritmalay... so don't take someone asking questions about your favourite stock as a personal attack on you.
Having said that - Mr K seems to have his finger on the pulse - and as you say - it's either trust his judgement ... or sell out. The only worry is the amount of cash TTY have spent on a failed (& hostile) t/o bid for OLY.

...so I'll ask again - what implications for TTY of the current situation with OLY. No takeover, but TTY now holding 65%.
??? what happens next???

-dukey.

 

[nioka]

If you're all so worried sell out. .

I have sold out TTY. In my humble opinion I think there are much better investments. The declining SP over the last three months while TTY has been looking at those new investments and taking their eye off iron ore tells me that a lot of others think the same.

 

[Mozi]

...so I'll ask again - what implications for TTY of the current situation with OLY. No takeover, but TTY now holding 65%.
??? what happens next???

-dukey.

Have a read of clause 3.3 of the Bidder's Statement dated 11 March 08 (http://www.territoryresources.com.au/files/On_Mkt_Bidders_statement.pdf). Sorry, that I can't copy the clause into this message, maybe someone else can - my excuse is that I'm new to this .

But in short, it says that if TTY acquires between 50.1% but less than 90% of OLY, that TTY will:

- try to have its own people appointed to the board of OLY;
- continue with OLY's mining activities;
- review OLY's operations, assets etc;
- review future employment of OLY's present employees;

and that the above will only be done with the approval of the OLY board, ASX rules etc etc. But as a majority shareholder, I would think that TTY have a fair bit of say in the matter. Or is that too naive of me?

OK, I've got my first message out, hurray

 

[Dukey]

Have a read of clause 3.3 of the Bidder's Statement dated 11 March 08 (http://www.territoryresources.com.au/files/On_Mkt_Bidders_statement.pdf). Sorry, that I can't copy the clause into this message, maybe someone else can - my excuse is that I'm new to this .

But in short, it says that if TTY acquires between 50.1% but less than 90% of OLY, that TTY will:

- try to have its own people appointed to the board of OLY;
- continue with OLY's mining activities;
- review OLY's operations, assets etc;
- review future employment of OLY's present employees;

and that the above will only be done with the approval of the OLY board, ASX rules etc etc. But as a majority shareholder, I would think that TTY have a fair bit of say in the matter. Or is that too naive of me?

OK, I've got my first message out, hurray

Welcome!! Mozi - and as good a first post as I have seen - goes a long way to answering my question anyway. ... guess I should've had another look at the bidders statement myself!!

Not 100% sure but you would think a board pos'n should be appropriate, and would hope that both parties can work towards the same goal .. rather than waste TTY/OLY shareholders $$ by getting into a sh!tfight over control.
... ... but it was a 'hostile' bid, so there will most likely be some bad blood to sort out.

Maybe Kiernan and the OLY board should get together for a good old bush networking session - ie. BBQ and a few beers round the camp fire.

 

[SenTineL]

I dont see how they are taking the pulse of their iron ore business when they are shipping ore out and are a producer....

Weird that share price gone down again today.

 

[Rimtalay]

Unfortunately there are a lot of short term TTY shareholders who expect the shareprice to increase everyday.
Re OLY, wait a few weeks and TTY will go back for the second bite. I doubt whether TTY management expected more than 40% at the first bite, and look what they got 65%. This is like playing poker, OLY shareholders now can't sell unless they are willing to take 7c, and no serious buyers until 4c. There will be pleny of OLY shareholders who wish they had sold at 10c. What will happen the next time they are offered 10c. All but a few diehards will sell.
This is a lesson on how to do a takeover at the minimum price.

 

[pattyp]

Rimtalay,

I sold my TTY this week... Yep, I lost faith... And i'm not an impatient investor... Quite the opposite... I just like it when things are simple and transparent and easy to forecast.

TTY needed to get that resource upgrade in yesterday... Not chase 5 other businesses in an attempt to diversify... MK has dropped the ball IMO.

And you may say that there is revenue and profits coming in... I agree that that is great... Except he is burning it on his empire building. There are so many issue here I just cant sleep at night holding TTY anymore.

I even struggle to do a DCF now because it involves valuing multiple other business.

I'll definitely keep watch and perhaps revisit TTY when MK shows me what the size of his upgrade is and when he has finished his takeovers.

IO producers/Explorers are a dime-a-dozen... Plenty to choose from, a lot with great potential, a lot with little...

Just my opinion...

Pat

 

[Dukey]

I hear you Pat.
I sold this morning for exactly the same reasons - was stoked to get over $1.

Good luck to those still on board - I'd like to see MK's empire flourish and maybe it will - but everything has to be crystal clear IMHO. Been duped before.

-Dukey

 

[Who Dares Wins]

I agree with the 2 previous posts.

Some time ago now MK said that it was his intention to bring several other companies in under the umbrella of TTY, hence the name change from Territory Iron to Territory Resources.

He also said however that MON would remain a stand alone company. Well it would seem that he has changed his mind without advising anyone.

I got out of MON last year luckily but now find that everyday I effectively own more through holding TTY!

There has been disscusion on the MON thread that bankruptcy is a possibility if things don't turn around in the very near future and if that were to happen I would not want to be holding the parent company.

All this combined with an undisclosed $7m cash loan to MON from IRL - another MK company - has really put me off.

I'm thinking the same as pattyp, TTY is still on my watchlist but for the meantime I'm out.

 

[Rimtalay]

Too many TTY shareholders don't seem to have the slightest idea.
1)They think that you can drill a JORC resource in 5 minutes during the wet season. A 4x4 can't even get to the site let alone a drill rig.
2)They expect immediate upgrades in the resources without drilling.
3) So many think that MK wants to takeover MON even though he said he won't. This is all without any proof except that TTY have taken a stake in MON, it's a company the management know will turn the corner very shortly and will make money even on the shareprice increase within 12 months. Better than leaving your cash in the bank if you can double it.
Did you know MON, poured 1400 ounces of gold last week, from a weeks production. This is twice previous production and this is just the start.
I can only say I'm very happy that you all sold out, because I picked up another 60,000 TTY shares at 86 cents last week. So who is the fool?
I note that MK bought another 100,000 TTY and 100,000 MON.
He must be a fool too!!! Or is he much smarter than you all realise. You know what I think.

 

[Dukey]

Too many TTY shareholders don't seem to have the slightest idea.
1)They think that you can drill a JORC resource in 5 minutes during the wet season. A 4x4 can't even get to the site let alone a drill rig.
2)They expect immediate upgrades in the resources without drilling.
3) So many think that MK wants to takeover MON even though he said he won't. This is all without any proof except that TTY have taken a stake in MON, it's a company the management know will turn the corner very shortly and will make money even on the shareprice increase within 12 months. Better than leaving your cash in the bank if you can double it.
Did you know MON, poured 1400 ounces of gold last week, from a weeks production. This is twice previous production and this is just the start.
I can only say I'm very happy that you all sold out, because I picked up another 60,000 TTY shares at 86 cents last week. So who is the fool?
I note that MK bought another 100,000 TTY and 100,000 MON.
He must be a fool too!!! Or is he much smarter than you all realise. You know what I think.

... and we bow to your obvious superiority in all departments Mr R .... may all of us idiots who don't think exactly what you think shrivel and die in our beds...

good luck to you.

 

[pattyp]

My problem Rimtalay is its all Guess work when weighing up TTY... And it is for u also if you be honest with yourself...

If you are an insider than good luck to you... You r lucky and i'm sure your risks will pay off because you have an edge.

I don't know what MK is doing... He is running his own show and not being extremely clear about his master plan.

I like TTY, I think I like MK... But right now I feel I can place my dimes somewhere that I don't have to spend too much time wondering and guessing... Worrying about.

Why cant you see it from my (Others) perspective... I have heard the forum arguments from u many times... read TTY reports... Seen the actions being taken... and I feel uneasy about it.

Cheers - and no disrespect to you. Just not for me anymore.

BTW - I took my coin from TTY and put it in BAU and am in about the same place (Minus brokerage) had I held TTY...

 

[pattyp]

One more point Rimtalay - I have never criticised you... Only the company... U tend to get quite disrespectful and derogative towards others who differ in opinion!

Either you have formed WAY too much attachment to TTY or you are TTY...?

The tone is not necessary either way. Be happy with your profits and be happy for me because I now sleep easier.

Pat

 

[Rimtalay]

Well, since you're now sold, hopefully I don't have to read so many negative uninformed comments in the future. Maybe you should tell Richard Elman of Noble that he is wrong too. He can then sell out and will be able to sleep better at nights too. But good luck to you, I mean no malice.
http://www.thisisnoble.com/index.php?option=com_content&task=view&id=447&Itemid=64