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Real-Time news about Auiron Energy (London Stock Exchange): 0 recent articles
|skipster: PROPOSED ACQUISITION BY AUIRON ENERGY LIMITED OF YARRABEE COAL COMPANY PTY LTD
AuIron Energy Limited ('AuIron') and Resource Management and Mining Pty Ltd ('RMM') have today reached agreement on the substantive terms of a transaction whereby AuIron proposes to acquire RMM's wholly owned subsidiary Yarrabee Coal Company Pty Ltd ('YCC') ("Acquisition").
The Acquisition will be subject to entering into a definitive agreement for the Acquisition, and satisfaction of a number of conditions including completion of due diligence and AuIron shareholder approval which will be sought at a meeting to be convened at the earliest practicable time. Prior to this meeting shareholders will be provided with documentation providing details on the transaction and YCC and its business.
The Directors believe that the Acquisition will provide a strong platform for growth by bringing together AuIron's cash reserves and listings with YCC's operating cash flow and management expertise. YCC management has identified a number of growth opportunities which will be progressively evaluated on their potential to contribute to near term shareholder value.
Dealings in AuIron Shares on the ASX will continue as usual. Under the AIM Rules (London Stock Exchange), dealings in AuIron Shares on AIM will be suspended with immediate effect.
The purchase consideration for the Acquisition is to be satisfied by the issue to RMM of 301 million ordinary shares in AuIron (which will represent approximately 48% of the issued share capital of AuIron) and 150 million options over AuIron ordinary shares. The options will be exercisable at 8.5 cents per share upon AuIron's share price reaching 15.5 cents within the next 5 years. The exercise of these options in full would result in RMM's interest in AuIron increasing to 58% of AuIron's issued share capital (assuming no other issue of AuIron shares).
Yarrabee Coal Company
YCC owns 100% of the Yarrabee open cast coal mine located in Queensland's Bowen Basin, approximately 280 km west northwest of the port city of Gladstone. The mine has operated continuously for over 20 years. During the fourteen-year period of YCC's ownership, annual sales have increased from approximately 250,000 tonnes of thermal and low volatile PCI coal to over 1 million tonnes providing an annual revenue stream in excess of AUD$50 million.
In this period, YCC has significantly improved mine operating cost performance and the company has defined coal reserves equivalent to 15 years operation at 1 to 1.2 million tonnes per year of sales. Its coal exploration permits have potential to further augment reserves over time. The mine is profitable; it
returned an EBITDA of AUD$4.1 million and EBIT of AUD$3.50 million (both unaudited) in the six months ended 31 December 2002.
It is proposed that, upon completion of the Acquisition, the board of AuIron will change. Mr Jon Parker will remain as Managing Director and AuIron will nominate one further director to be on the board. Two persons nominated by RMM will be appointed as directors. Mr Ian McCauley, Chairman of RMM and Mr John Rawlins, Managing Director of YCC, will be appointed Chairman and Director of
Shareholder Approval Process
Shareholders will be asked to consider and approve the Acquisition at a general meeting to be convened at the earliest practicable time.
The documentation to be submitted to AuIron shareholders in connection with their consideration of the Acquisition will set out amongst other things, a more detailed description of YCC and its business, a discussion of the intentions for the Company, an Independent Expert's Report and a directors' recommendation. Shareholders may also be asked to consider a 15 to 1 consolidation of the share
capital of the Company at that meeting.
"The proposed Acquisition will give AuIron shareholders access to ongoing cash flow from operations for the first time and a platform for growing shareholder value. It represents an important milestone in the repositioning of the Company" said Jon Parker.|
|noirua: Auiron's report of events show that the progress of S.A.S.E. - had it been continued with a Partner or Partners helping with funding - would eventually have been successful.
The first reason was continued funding only by Auiron which with the present share price, or rather as it was shortly before the final announcement could never have raised sufficient funds to realise the ambition of a five module plant.
The Demonstration Plant catching fire was really the final straw, coupled with the need to re-design lances and adapt oxygen supplies. This coupled with the need to start with third party coal would have caused long delays. On top of this the revising down to one module was not viable on a risk return basis.
Basically Auiron Energy could not raise more or sufficient funds alone and would have been bankrupted before completion.
All this does not mean all hope is lost, a partner would be able to shoulder the costs of a longer spin out of the Demonstration Plant. This could well take a further two years. In return Auiron would have to give up part of their interest. How much is the question????
After completion of the Demonstration plant phase it would be necessary to raise A$1.2 billion ( less if the plant is scaled down from that first invisaged ) for a 5 module plant.
Hopefully a return to S.A.S.E. Development would dramatically increase the share price.
Auiron's share of funding would be large leading to a rights issue and further dilution both of the S.A.S.E. and Auiron Shareholders.
Still in the end 10% of a great deal is worth far more than 90% of nothing.
So everything is not lost and a partner announced can be awaited both with interest and enthusiasm.
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|skipster: MiningNews.net – 2nd July 2002
Little beer and cheer on the slope of AuIron
COMPETITION Time: Guess which Australian mining company has the share price graph which most resembles a ski slope?
No, it's not Pasminco, though that's not a bad guess. And it's not Western Metals, which is also a contender.
The winner is AuIron Energy, with a truly beautiful ski slope, complete with a jump just towards the right-hand edge, before a lovely tail-off into the bar for a couple of après-ski beers.
Starting around the $1.25 mark in November 2000, AuIron has been gliding, almost seamlessly, to today's price of 10c, a slide best described as a "92" - and, no, that is not a point score for the perfect representation of ski slope, that is the percentage decline in price in just 20 months.
On a monthly basis, that's downward movement at about 4.6% a month. Terrific stuff.
Dryblower, who always admires record-breaking performances by his subjects, says, "well, done chaps, you've made AuIron a household name!"
Others, especially friends of Dryblower who had their money in the company, appear to agree with the accolade of household name, though apparently not for the same reason.
There seems to be a little bit of disquiet over exactly what happened at AuIron, why its share price has crashed so severely, what went wrong at the highly touted South Australian Steel and Energy (SASE) project, who knew what, when, and what on earth does London think of all this?
Final point first because London is a long way from Adelaide, AuIron's home. But, London is also the place that AuIron achieved its greatest coup when listing in September 2000 on the Alternative Investment Market of the London Stock Exchange, and raising about $55 million in the process.
Back in those heady days, when the share price graph was going up, AuIron was hailed as a brilliant example of what Australian resource companies had to offer London investors.
Hmmmn! Dryblower wonders what London thinks today - and what chance the next crop of potential listees on AIM, especially as AuIron was the biggest ever Aussie float on Britain's junior market
The official word from AuIron is that it cannot make the financial numbers work at SASE, and that this has only just become apparent. Funding has been "curtailed". Management gutted. The board thinned. Contractors given the boot. Corporate overheads cut by at least $2 million a year in an effort preserve about $25 million in spare cash - $32 million in the can today, and $7 million committed.
And that, folks, brings up a final thought on the matter. The planned $2 million reduction in costs is, according to AuIron, a reduction of "approximately one third".
Pardon the rude question, but does that mean that until now AuIron has been chewing up $6 million a year, and that the new figure for "general and administrative costs" will be around $4 million a year, and that the outgoings will be spent on keeping SASE in mothballs and trying to work-up a lignite project in Ireland?
All Dryblower can say to that is best of luck, and don't forget to collect the ski-slope award, it might be the best thing that happens this year.|
Auiron Energy share price data is direct from the London Stock Exchange