ZFX - Zinifex Limited

[mfp]

So do people think ZFX has turned the corner or was Friday just another blip in a continuing downtrend?

 

[Nyden]

So do people think ZFX has turned the corner or was Friday just another blip in a continuing downtrend?

Zinc rose again; providing the US doesn't take a fall down the stairs, might just see some smooth sailing for a while here

 

[ozrob]

15 November 2007
Nyrstar Over Allotment Option Not Exercised
In connection with the initial public offering (the “Offer”) of Nyrstar NV (“Nyrstar”),
Zinifex announces that the Underwriters have not exercised the over allotment
option in respect of 13,043,478 shares in Nyrstar, representing 13.04% of the
Nyrstar’s share capital.
The number of Nyrstar shares issued is 100,000,000. As a result of the nonexercise
of the over allotment option, the final size of the Offer remains
unchanged from that previously advised at 86,956,522 Nyrstar shares sold at
€20 per share, representing gross proceeds of €1,739,130,440 for Zinifex and
Umicore SA/NV (“Umicore”), the selling shareholders.
As a result Zinifex and Umicore will retain stakes of respectively 7.79% and
5.25% in Nyrstar. These shares will be held under a 360 day lock up from the
commencement of conditional trading on 29 October 2007, subject to customary
exceptions.

I would think this after market announcement will have a positive effect on the share price tomorrow, after all it is 7.79% of a major asset.
What does every one else think ?

 

[joeborgo]

Maybe not ozrob as the market may have been expecting the cash instead. does anybody know if Zinifex has actually received the cash for the sale of Nyrstar yet or were they waiting to see if the option was taken up? SP did well today and tried to breakout a few times considering Zinc price was down.

 

[Nyden]

Um, that article is dated November 15th.

It's been known since they sold Nystar that they still held a 7% share in it.
Yes, Zinifex have the cash from the sale.

Out of curiosity, does annyone know what corporations like this do with such large sums of money? Does it accumulate interest in special billion-dollar accounts? Heck, even 5% P/A over 4 months would generate some sweet interest with 1.6bln

 

[joeborgo]

hi nyden

what do you think about Zinifexs performance of late? IMO it looks like they have turned the corner and could be set for a recovery of sorts. With the cash they would at least have it invested on the short term money market.

 

[bigdog]

Yesterday's Australian

http://www.theaustralian.news.com.au/story/0,25197,22858101-5005200,00.html

WHAT THE BROKERS SAY: Kevin Andrusiak | December 03, 2007

Zinifex (ZFX)
Merrill Lynch
Sell recommendation
No share price target
Last traded at $14.40

THE one-time market darling Zinifex faces some big headwinds over the next 12 months as analysts predict the zinc price to continue to retreat and the company's own admission that operating costs are likely to rise by 10 per cent this financial year.

Add to this the higher Aussie dollar/$US exchange rate and there are more than a few market watchers out there saying Zinifex is a definite sell.

"We expect the demand for zinc over the coming quarter will disappoint," Merrill analysts Mike Harrowell and Stuart Howe recently told clients.

"Weaker demand and a surge in supply will lead to lower prices." Earnings estimates for the current fiscal year from Merrill has been revised 8.8 per cent downwards to $746.3 million while the net present value (NPV) estimate is now 12 per cent lower at $9.66 a share.

 

[Nyden]

hi nyden

what do you think about Zinifexs performance of late? IMO it looks like they have turned the corner and could be set for a recovery of sorts. With the cash they would at least have it invested on the short term money market.

I certainly can't say if it's turned a corner - it all depends on what the price of Zinc does at this point.

Their first acquisition will be of importance as well - how much they pay, earnings estimates, whether the market feels they under/overpaid. We'll start to see some real movement (either good, or bad) once acquisitions become realized; basically, once we see which direction they're actually headed.


I will say, that both Zinc & Zinifex though have performed reasonably well over the short term though, which is obviously stating the obvious

 

[profithunter]

Yesterday's Australian

http://www.theaustralian.news.com.au/story/0,25197,22858101-5005200,00.html

WHAT THE BROKERS SAY: Kevin Andrusiak | December 03, 2007

Zinifex (ZFX)
Merrill Lynch
Sell recommendation
No share price target
Last traded at $14.40

THE one-time market darling Zinifex faces some big headwinds over the next 12 months as analysts predict the zinc price to continue to retreat and the company's own admission that operating costs are likely to rise by 10 per cent this financial year.

Add to this the higher Aussie dollar/$US exchange rate and there are more than a few market watchers out there saying Zinifex is a definite sell.

"We expect the demand for zinc over the coming quarter will disappoint," Merrill analysts Mike Harrowell and Stuart Howe recently told clients.

"Weaker demand and a surge in supply will lead to lower prices." Earnings estimates for the current fiscal year from Merrill has been revised 8.8 per cent downwards to $746.3 million while the net present value (NPV) estimate is now 12 per cent lower at $9.66 a share.

I love how these big brokerage firms come out with these comments after the fact, its easy to say Zinifex is a dog after its price has fallen from 18.60 to 14.50 and that the outlook is cloudy after Zinc has dropped 40% this year. Why werent they saying this at the stocks peak in july or even in october. Whenever the big banks go bearish on a stock its time to buy. I've been loading up on ZFX because all the news has been negative (contrarian view). Come on you smart @rse analysts put your balls on the line and make some real calls rather than following the market.

 

[roland]

I love how these big brokerage firms come out with these comments after the fact, its easy to say Zinifex is a dog after its price has fallen from 18.60 to 14.50 and that the outlook is cloudy after Zinc has dropped 40% this year. Why werent they saying this at the stocks peak in july or even in october. Whenever the big banks go bearish on a stock its time to buy. I've been loading up on ZFX because all the news has been negative (contrarian view). Come on you smart @rse analysts put your balls on the line and make some real calls rather than following the market.

I'm normally un-enlightened with a lot of these broker comments. As you have mentioned "easy to say after the fact". Any one of us watching Zinifex know all this stuff already - in fact, I would guess the individual resources and watchfulness of the ASF members would give some of these so called expert brokers a run for their money.

Bottom line is, the Zinifex board and Directors know what the issues are and I am confident that they have the expertise to continue adding value to shareholders like ourselves. The demand for Zinc will not go away, but the supply eventually will.

Unless Zinifex kills the dividend yield or does something really stupid, then I'll be around - not quite getting the ZFX tattoo on my forehead yet

 

[SGB]

Alex Wilson of the Dow Jones NewsWires reports;

"Buyers are beginning to signal interest US 15 billion dollar worth of assets that Rio Tinto plans to sell."
OXR, ZFX, PME, NCM have all been tipped as potential buyers of the Northparks Copper and Gold Mine operations, which has the capacity to produce 60,000 metric tons of copper and 50,00 ounces of gold per year and expected to be in production until 2015."

He goes on with some bla bla bla but notes " Zinifex is expected to have a look at Northparks as the miner is cashed up from the spin off of its smeltering business and is targeting copper aquisitions"

 

[roland]

Alex Wilson of the Dow Jones NewsWires reports;

"Buyers are beginning to signal interest US 15 billion dollar worth of assets that Rio Tinto plans to sell."
OXR, ZFX, PME, NCM have all been tipped as potential buyers of the Northparks Copper and Gold Mine operations, which has the capacity to produce 60,000 metric tons of copper and 50,00 ounces of gold per year and expected to be in production until 2015."

He goes on with some bla bla bla but notes " Zinifex is expected to have a look at Northparks as the miner is cashed up from the spin off of its smeltering business and is targeting copper aquisitions"

I hope Zinifex doesn't get caught in a bidding war and end up paying too much. Why is RIO selling off this asset?

 

[SGB]

I hope Zinifex doesn't get caught in a bidding war and end up paying too much. Why is RIO selling off this asset?

As reports
"Rio said last week that it expects the asset sales to raise US$15 billion to pay down some of the US$40 billion in debt it took on to fund its takeover of Alcan Inc."

 

[3MT]

I love how these big brokerage firms come out with these comments after the fact, its easy to say Zinifex is a dog after its price has fallen from 18.60 to 14.50 and that the outlook is cloudy after Zinc has dropped 40% this year. Why werent they saying this at the stocks peak in july or even in october. Whenever the big banks go bearish on a stock its time to buy. I've been loading up on ZFX because all the news has been negative (contrarian view). Come on you smart @rse analysts put your balls on the line and make some real calls rather than following the market.

I can't agree with you more on this. But if they were that good at forecasting they wouldn't be doing fulltime work at a broking house.

I've offloaded half my zfx holdings the other week while prices were at these levels and falling. Although it looks to be stabilising (I"m only basing it on the last few days trend), I am hesitant of holding any more zinifex for the short term play. (how market will take to its new acquisition, what China will do with zinc rebates). Medium-Long term its going to be a mid-tier force to reckon with.

Most of the other blokes would be worrying about bidding against ZFX for RIO's assets. They don't have the same cash inheritant.

 

[Nyden]

If the rise of this morning manages to hold; dare I say sentiment may finally have changed on ZFX. We're officially at $15 now Perhaps it really did fall too far

 

[justjohn]

So far a good week for ZFX up 3% today but could easily turn pear shape but keep the FAITH a L/T :

 

[Rafa]

That base around the 13.90 to 14.00 is looking very very solid...
This makes sense, cause at these levels, its PE is about 6, and market cap is 7billion, of which about 1.8billion is cash! But its what they do with this cash that will determine whether the levels of $22 will be seen again... but atleast $14 ish is a solid base.

see chart...

 

[mneal]

Breaking through 15.00 now. That's around 40c rise today. The volumes are also up. Does anyone know if any of the takeover rumours have arisen again today?

Either way, my opinion is that price is still low at the moment because it looks to be based on the future earnings declining. However that valuation doesn't count any of the future growth potential - which they still have to spend 2.2billion on acquistions and also have a decent portfolio of new projects.

I guess we'll need to be patient though for some significant gains, unless a REAL takeover is presented.

 

[profithunter]

The rise today looks like its due to more takeover rumours...talk that xstrata is preparing a $20 bid...but who knows.

 

[prawn_86]

Profithunter, can you please confirm this rumour?

If it is from another forum it is useless ramping, if not please provide a link or more data rather than just a random price target