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WEC - White Energy Company

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As you are a foreign holder it's best to cash the cheque as it's not worth the hassle doing anything else. You can always buy them back as the stock price is well down on highs.
Unfortunately both in the UK and Aus many no longer want to risk not understanding the laws of another domain. Therefore they leave it to you to say all is OK and it's down to you if it all goes wrong. You could go on and on about it but it's not worth it.
 
M & G funds have raised their stake in WEC from 12% to 13% despite the steady falling price.
WEC have a vote shortly on their bid for Cascade Coal costing around A$500 million.
 
WEC have put off the vote for purchasing Cascade Coal to May. Recent events have pushed confidence in the sector well down and the price of smaller coal enterprises are down 15% to 25%. That would put the Cascade Coal value nearer $375 million from $500 million and many are not likely to support the company on their purchase - JUST TOO RISKY AT $500 million
My value for Cascade Coal is nearer $200 million plus previous expenditure on the exercise
 
WEC have rebounded a bit and now stand at $3.10. The fall from $4.20 looks to have been well overdone, and this caused, in part, by the lacklustre performance of the board of directors over Cascade Coal. Not our fault the Directors might say but they are very well paid and own large chunks, excluding independent directors, of White Energy stock.
The NSW Planning Minister still has to give the mining licence for Mount Penny the nod yet and this matter may run on a bit. I don't expect this to be cleared up properly before the Spring.
 
Hi Noirua, Never heard you so quiet for so long !!
Poleaxed by the Cascade collapse ?
Even so, $2.24 is surely overdoing it?
Coal price is good. No apparent further problems in Indonesia.
Any ideas?
 
Quillan said:
Hi Noirua, Never heard you so quiet for so long !!
Poleaxed by the Cascade collapse ?
Even so, $2.24 is surely overdoing it?
Coal price is good. No apparent further problems in Indonesia.
Any ideas?
Click to expand...

Hi Quillan, Long time no read.
Indonesia has been moving more slowly than expected. Although The Phillipson Tenement, S.A., has areas covered by the Woomera Rocket zone mostly cleared for mining, there doesn't seem to be that much enthusiasm around. The interests in America and China also do not seem to be progressing quickly.

The Cascade collapse has lost investors confidence in the Directors and they may come back and buy Cascade Coal later.

The mining sector has been bashed wordwide from minnow to giant. A company needs to have an income stream and no worries and concerns these days.

$2.24 is a low price and the stock is cheap, however, it may get cheaper unless the sector turns round suddenly - good fortune.
 
Cheaper are WEC at about $1.84 and 57% down on their high last year.
WEC bid $486m for Cascade Coal and now their market cap is little more than that.

Still, WEC seem now to be interested in Indonesia in particular. A u turn on buying Indonesian coal mines and MD Flannery and Co are now it seems set to exit Australia.
It would not be surprising for them to consider an exit strategy from Phillipson South Australia, to a degree, by being more involved in the upgrading technology and less in financing other infrastructure.

Tabang, Indonesia, after the shutdown this September for a month should become profitable with sales of briquetted thermal coal, 1mtpa. Upgrading strongly supported by Indonesia's Government.
 
White Energy's new tactic to buy coal tenements in Indonesia could turn out very good for the company - Note Cat Limited excitement on purchases.
 
well their major focus is to upgrade high moisture into low moisture coal and their joint venture partner who have already forked out money to buiild the plant to upgrade the coal have decided that they would make more money without using the plant.

I.e. The tech is not worth it.

Hence the value they have is cash and their coal tenements which again are high moisture content and would not bridge the valuation gap, possibly money to be made here though
 
Another drop (0.775), high volume (around 17 mi) most due a buy on 16:10 of 10 mi shares at 0.79
 
Speculation but reading between the lines from the conference call is that the idea was that Bayan would sell coal into the JV at the cost of production and then share in the profits from upgrading the coal. The coal was high moisture so unable to be exported such as victoria's brown coal.

Bayan now say that they can sell it FOB $US 60 and $USD 40 ex mine. The briqquetes would sell for$100USD but u only have 1 tonne vs 1.5 for the wet coal.

As Bayan can now sell this coal they want the JV to buy the coal at the commercial price rather than at the cost of production which would reduce the profitability of the JV.

At so for 1m tonne of briquettes they would get 100m revenue, and now the coal supply would cost either 60-90m USD so leaves 10-40m for opex. Cost of plant was about 80m, new plants would cost less for given processing capacity but for ROA of 20% it needs to make 16m a year.

Not sure what the opex for the plant would be.

Doesn't leave much room for profitablity.

Talk of moving the plant isn't exactly comforting given this is the demonstration plant to show this tech works and would be profitable.

Bayan is saying the tech works but had problems, WEC say this are rectifiable but are saying that they may need to move the plant because it might not be profitable.

Seems like this tech would only be useful if the coal from a deposit would not be saleable unless the quality is upgraded.
 
Yes, bad news indeed and WEC crashed to 35c at one stage against a high 2 years ago of $4.25. The shares have recovered a bit to around 47c with the sector generally.

The court case in Singapore and a possible Appeal to follow may drag on for some time. Indonesia are due to bring in a new law, now put out to 2014, to ban the sale of low grade coal but rumours say the Government is likely to water-down the original proposals or make exceptions.

WEC's position is considered complex as they own 51% of the Tabang Plant and are operators (Bayan own 49%). It is the responsibility of White Energy to get their technology up to speed and there is the main difference of opinion; Bayan will say it doesn't work effectively.
WEC will take the position that Bayan breached their contract to supply coal to the plant at cost, and are walking away to sell coal at a higher price.

There is also the subject of a loan supplied to WEC of around $38 million and Bayan offering to sell their part of the plant for $38 million, the latter White Energy has declined as it leaves their plant with out coal.
 
This company only came to my attention a few days ago.

It's 40.5c today, I've picked up some, and I will be picking up some more over the coming few days.
 
teck21 said:
This company only came to my attention a few days ago.

It's 40.5c today, I've picked up some, and I will be picking up some more over the coming few days.
Click to expand...

I trust your buy criteria is slightly more stringent than "came to my attention"... Care to elaborate?
 
It's been beaten down really badly, and still has quite a bit going for it.

Not a hell lot of down left for it right now, and doesn't take much for it to get up.

Whichever way the market turns, I would be happy to pick up more.

Apart from the fact that it can't make any money from its Tabang project right now, it's pretty much the same company it was when the share price was $1 or so.

Someone earlier commented that a previous price fall from $4.20 to $3-something was overdone. In hindsight certainly not so.

At some point though, it's gotta be for a company with that much cash in bank net of liabilities.
 
White Energy have presently obtained a court order to prevent PT Bayan (an Indonesian company) from selling or transferring any of their shares in Kangaroo Resources. These shares represent 56.05% of the company and worth A$240 million.

WEC are presently seeking damages from Bayan in the Singapore courts and Bayan are seeking damages from WEC.
 
The Tabang JV with Bayan has now gone into liquidation and any pay day will be in the courts of Singapore.

The WEC stock price is up 55% of late on three fronts, liquidation of Tabang; improved outlook of South African coal fines; and profits from sheep and wool sales at Ingomar Station.
 
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