ZFX - Zinifex Limited

[rederob]

CNBC saying Zinc went down over night %1.5 to $2487 a ton. I watch Kitco too, but I don't think they quote LME prices which is what the market seems to watch.

I don't pay any attention to CNBC.
Kitco quotes spot, not LME.
LME is the "market" indicator, while Kitco just plots sales exclusive of LME.
LME and Kitco can show differnt trends as LME quotes ring close prices.
Kitco's charts are also prone to glitches, occasionally suggesting massive market swings, which are quite misleading.
Most contracts between producers and buyers are set against LME metal prices.

 

[cordelia]

Lol. With all those letters after his name, perhaps the chairman should run for president, or at least governor-general.

when I first saw all those letters affter his name I thought it was a joke......Its embarrassing that the guy even puts them there....


Its been my experience that someone who has to obtain credibility by showing how many qualifications they have probably isn't qualified....

Let's face it how many successful people do you know who don't have a degree...

BTW ..this isn't sour grapes for all those with a university education....I have one myself....

 

[nioka]

Looks like ZFX has won this game. Now to planB for me as there is a better bet than ZFX. $1.10 is robbery.

 

[Viginti]

Looks like ZFX has won this game. Now to planB for me as there is a better bet than ZFX. $1.10 is robbery.

I assume that by robbery you mean ZFX got AGM cheap?? If so, wouldnt ZFX be a 'good bet'?? Not that there wouldn't be better options out there...

I am still surprised that it has taken this long, and then all of a sudden the AGM directors roll over....something more to this???

 

[nioka]

I assume that by robbery you mean ZFX got AGM cheap?? If so, wouldnt ZFX be a 'good bet'?? Not that there wouldn't be better options out there...

I am still surprised that it has taken this long, and then all of a sudden the AGM directors roll over....something more to this???

I guess the directors have been offered a sweetener with executive positions and good salary contracts. Been expecting this to happen sooner than later. I have taken a position with MCR as my nickel stock. Sold half my AGM last week for $1.07 and got into MCR, made up the threecents I'll lose out on AGM. Made a fair profit on AGM but still consider the deal was best for ZFX. Now I can sit back and hope the ZFXers have their doomsday predictions fulfilled, the ones where they doubted the production start up date would be this quarter etc. The fact that the takeover looks like being successful means that delays are likely and the picture may not be as good as we were led to believe.

 

[johnno71]

ZFX saying in half yearly report production at Avebury to start in 2Q, might be optimistic. I hope AGM have got as much reserves as they have been spruking about, or ZFX could have paid to much.

 

[banska bystrica]

THR and his cronies knew that yet another production delay was imminent so they have eaten humble pie and sold out.
ZFX will make a go of it though. They can use their plant down the road from Avebury that is on care and maintenance to ramp up nickel production to 15,000 tonnes per annum. They will make about 150M net profit per year from AGM's nickel once in full production.

 

[Nicks]

ZFX saying in half yearly report production at Avebury to start in 2Q, might be optimistic. I hope AGM have got as much reserves as they have been spruking about, or ZFX could have paid to much.

I dont think the ZFX team are stupid. Im sure they know exactly whats there and what it is worth. Its all part of the haggle game. In the end i''m sure they still got it for a good eps accredative deal and they can squeeze much more econimic value out of it then AGM could have.

 

[oldblue]

Yes, I was always worried that ZFX would pay too much for AGM.
Now that's settled I'll look seriously at taking a small position.

 

[rustyheela]

Anyone see Michelmore on ABC late business news last night? ZFX are still looking for aquisitions and he suggested they would like to diversify into copper, and not necessarily in Oz.
after the AGM takeover they still have a $ 2.3billion warchest, OXR lookout?
Eqinox? soon to be in production, maybe a AGM - let them do all the hardwork then nab em for the spoils?

 

[agro]

supplementary bidders statement released

 

[rustyheela]

made booboo about warchest in above post, heres the transcript

Zinc miner delivers record profit



Broadcast: 26/02/2008

Reporter: Ali Moore

Zinc miner Zinifex has delivered a record first half profit up 74 per cent to $1.3 billion.

Transcript
ALI MOORE: Zinc miner Zinifex has delivered a record first half profit up 74 per cent to $1.3 billion off the back of the sale of its smelting assets but ongoing operations had a tougher time. Higher production hit by lower prices and the stronger Australian dollar with revenue for the half down 27 per cent. Also today, Zinifex upped its bid for the Tasmanian based nickel miner Allegiance Mining finally winning agreement from the Allegiance board to recommend the deal to shareholders. Zinifex CEO Andrew Michelmore joined me from our Melbourne studio earlier this evening. Andrew Michelmore, welcome to Lateline Business.

ANDREW MICHELMORE, CEO, ZINIFEX: Thank you, Ali.

ALI MOORE: A record profit thanks to the sale of the smelting assets revenue actually fell. Given commodity prices and the currency are out of your control, how do you change the revenue story?

ANDREW MICHELMORE: I think the revenue, mainly the prices for zinc have been grossly overplayed. The prices were already factored in a significant expectation of excess supply of zinc. We think that's grossly overdone. We don't think that supplies going to come through anything like projected. I think also the funds have been playing that price down. They've been selling short and now we see when the price picks up they start having to cover their positions. I think it's been grossly overshot and so that's why we're quite positive about the future going forward, that prices will pick up.

ALI MOORE: As you noted, prices are down some 22 per cent over the half. What's your outlook for the second half for prices?

ANDREW MICHELMORE: Look, I think it's really the settling out of these funds, also seeing the various projects being delayed. There's production cuts, there's issues with power supply, there's weather issues. And I think as those come through you will see a number of changes. Last week at one stage the zinc price was up over 5 per cent, so it can turn very quickly.

ALI MOORE: You're seeing strong demand for zinc for the rest of the year?

ANDREW MICHELMORE: We are. About 50 60 per cent of zinc's consumption goes into coating steel to give it corrosion resistance. The steel industry as you've seen with the iron ore prices booming in the developing countries, and 13 to 15 per cent of that steel is coated in zinc. So again, it's where we see there's a disjoint between what we're seeing on the zinc being talked down and yet steel being talked up. So we see that the two will come, the message will get out soon.

ALI MOORE: Given that optimistic outlook, can you give us a forecast for full year results?

ANDREW MICHELMORE: I'm in the a position to forecast thing like that. I think it's probably too early and we'll just have to see. The prices can also be effected by the economy, the confidence in the economy. You see that with the subprime having a collateral damage to the economy and expectations. Our performance is so related to the prices that it's just too early to say.

ALI MOORE: Without pinning you down on specifics, you are, though, an optimistic about global growth despite those subprime issues?

ANDREW MICHELMORE: Most definitely. I think what we're seeing is what I'd call collateral damage. The fundamentals for the consumption of zinc, the demand for it are very good and also the supply is going to be tighter than people expect.

ALI MOORE: You've now got a board recommendation in your takeover bid for Allegiance Mining and once that deal goes through it will add a nickel to your stable of led and zinc. You do want to diversify, that's the strategy. What's top of the list next?

ANDREW MICHELMORE: We want to diversify in nickel and also copper. We have a number of opportunities we're looking at in both those areas. As you say, very important to get the Allegiance acquisition under our belt, get that into production and at that point we'll be looking at actually going forward with a couple of other acquisitions. But there's a suite of them we have. I think one of the benefits of the market coming back is that people are more realistic about their values and the prices for these companies and in addition, we have $2.2 billion sitting in the bank. So that cash is worth an enormous amount to us in terms of purchasing power.

ALI MOORE: So after Allegiance, how much will you have left in the kitty?

ANDREW MICHELMORE: About $880 million go on Allegiance, we've got $2.2 billion sitting in the kitty that will leave around $1.3 billion.

ALI MOORE: A suite of acquisitions, can you tell us where and what?

ANDREW MICHELMORE: Now we've got nickel in Australia under our belt it obviously opens up opportunities to use that core investment to then move into other countries. With copper at the moment I think we'd like to we'll continue looking in Australia for opportunities. We'd like to grow our portfolio a bit more to get a more diversified base to it before we look at any significant offshore opportunity. But having said that, you never know what happens. These things come up with a sudden position to be able to move and we have to be prepared for that.

ALI MOORE: You obviously, though, have specific projects on your list ready to buy?

ANDREW MICHELMORE: Yes, we do indeed.

ALI MOORE: What are they?

ANDREW MICHELMORE: No, if I told you that the prices of all those opportunities would immediately go up in anticipation of an acquisition, so we sit on it very tightly.

ALI MOORE: But a couple more purchases before the end of the financial year?

ANDREW MICHELMORE: Look, these purchases take quite a bit of time, they take the effort. Also you need to bed down the ones that you've done. It's too easy to take your eye off the target once you've got it and then you don't actually get the benefits out of it you've originally argued for. Our first job will be to bed down the Allegiance acquisition. But obviously at the same time we will be working out how we do the next one, who it is, which are the priorities and when's the appropriate time to move on them.

ALI MOORE: Is the takeover of Allegiance Mining a done deal?

ANDREW MICHELMORE: No, we have a board recommendation announced today and obviously now the offer closes on 7th March. So we have to work now between this point and the 7th of March to ensure we get as many of the shares in as possible.

ALI MOORE: You'd say it's as close as done as it could be?

ANDREW MICHELMORE: We would like to think that, but you never rest on your laurels, you get in and make sure it happens.

ALI MOORE: Andrew Michelmore, thanks for talking to us.

ANDREW MICHELMORE: That's a pleasure Ali, thank you.

 

[Nicks]

Thanks Rusty for that. It was very interesting. I am veryy happy as a shareholder that they are "Going for Growth" (Liberal Party Slogan, 2007).

Seriously that reassures me that they are actually going to turn that money in the kitty into eps accredative projects and aquisitions, rather than just have it sitting there. Though having it sitting there has been a wonderful thing with credit collapsing all around them! Puts them in a very dominating position.

 

[kingbrown]

HI GUYS
IS IT TRUE SOME BROKERS HAVE JUST PUT A SELL IN FOR ZFX

PLEASE ADVISE AS TO WHY ??

 

[Ashsaege]

HI GUYS
IS IT TRUE SOME BROKERS HAVE JUST PUT A SELL IN FOR ZFX

PLEASE ADVISE AS TO WHY ??

... maybe they are forcing people to sell so that the SP will fall... then the brokers can pick up some bargains!

My e-trader has had a buy recommendation since January. And now that ZFX has got AGM they are starting to diversify, and they are looking into Copper as well.
35c Divies arn't bad either! ZFX has alot of cash, no real debt, and growth. Time to top up i believe!
It would be a major bonus if the price of zinc increases too!

 

[mullys]

ZFX went up today while alot of other stocks were going down. Pretty good sign considering the market really droped today. Good volume today as well, it will be good when it breaks $11. Is There any other new out there as to why it went up other than buying?

 

[Stan 101]

maybe it's gone up because people have realised this is basically the same company it was 12 months ago.

Century is not going to last forever, although they have offloaded the smelter and all the potential litigation that goes with owning such a thing and have a wedge of cash to aquire. They have continued to offer a great dividend in the face of the zinc market's turmoil and have a forward plan that does not include heavy debt..

cheers,

 

[vishalt]

Ali Moore is so hot and the best at super-grilling questions yet she doesn't ask stupid dumb bandwagon questions like other standard journos.

Nice interview by her, thanks for posting.

 

[treefrog]

I guess the directors have been offered a sweetener with executive positions and good salary contracts. Been expecting this to happen sooner than later. I have taken a position with MCR as my nickel stock. Sold half my AGM last week for $1.07 and got into MCR, made up the threecents I'll lose out on AGM. Made a fair profit on AGM but still consider the deal was best for ZFX. Now I can sit back and hope the ZFXers have their doomsday predictions fulfilled, the ones where they doubted the production start up date would be this quarter etc. The fact that the takeover looks like being successful means that delays are likely and the picture may not be as good as we were led to believe.

so nioka, you are now saying all your other posts about how we'd all be eating our words and how great AGM are, and we would all see this "in the fullness of time" yarda yarda, were all cra.p?? Knew as much.

 

[johnno71]

HI GUYS
IS IT TRUE SOME BROKERS HAVE JUST PUT A SELL IN FOR ZFX

PLEASE ADVISE AS TO WHY ??

ABN Ambro have down graded zfx to a hold. They did a valuation on agm in December last year just after zfx announced their take over bid. They basically said that if zfx got agm for anything around a $1 it would be a steal. They were comparing zfx's takeover with Xstrata's bid for Jubilee, saying agm was worth over $2. Strange they downgrade zfx after they have just picked up a bargain.