Cerillion Share Discussion Threads

[kibb2] 19/10/2007 07:11

Kermit >>

I think the fact that Barrick have expressed their willingness to sell is quite unsurprising. As soon as the Nez. deal was not going to happen (with Celtic that is), Barricks's strategic stake would have become a bit of an oddity as Celtic was no longer going to have a project of scale that would interest them. That is not to say that they don't have some decent projects and the potential to generate some very decent cash flows! As such, I would say that the Barrick sale can be looked at separately when considering the major shareholders.

[kermit] 18/10/2007 21:53

chevyplus

Well they didnt have a lot of trouble getting nearly 30% under £2!

and one of the major shareholders have already said they can have theirs aswell.

We will be lucky to get £3 here and i will be happy with that

Celtic will never get the valuation you all think...

Anyone for VOG shares?? The city have had enough of FOO and his antics

[chevyplus] 18/10/2007 21:23

Zolota,
as you say volume is low so it would seem Severstal will have trouble in getting more stock unless they increase their offer.One doesnt need to be a Rhodes scholar to see the increase in production and upgrade at Suzdal, will see a value of around 450p- 500p by next year, add to this, a rise in the gold price and we have a very nice company.The following years can only be better.Some further concentrates to be treated and we will have a very profitable outlook.
I find it interesting that in the view of Celtic management, Severstal have, at this stage, not made, a genuine offer.I guess they are waitng to see if another bidder comes to the table.Lets hope this is the case and then we will see some action.But all this aside, surely our best result is to survive on our own.
Anyway, it seems fellow s/holders think we are worth more, so the few of us on here,are not completely alone.
Chevyplus

[zolota] 16/10/2007 14:55

Gold is still steadily rising, with production up and unit costs down the margin per ounce will also go up significantly. >400 per ounce is realistic at current prices .

The case to invest in gold will only get stronger for Severstal and as a consequence the case to pay significantly more as well.

It is good to see that there are few week hands. Volume has dried up so Severstal should come up with an signficantly better offer, because the value of CER will only go up, supported by steadily improving production numbers and the gold price and possibly exploration results.

[tigerinvest] 14/10/2007 15:04

I agree - just rounded down to be even more conservative.

[eastwind] 14/10/2007 13:08

TigerInvest, I just checked Celtic website, the share of moly production is 0.75m lb per year.

By the way, I think CER worth 470p including the cash, without any other exploration assets with a PE of 15.

[tigerinvest] 14/10/2007 12:33

Sagem, let's do the maths:

Celtic states that they will produce around 90,000 ounces in 2007 (profit of around $30 mln) and 150,000 in 2008 (profit of around $50 mln).

On top of this you should take into account:
- molybdenum production anticipated to reach 1.5 million pounds in 2007
- profits from the BIOX(R) plant
- cash of US$34.4 million at 30 June 2007 and a further US$26.5 million in cash received for the sale of Miheevskoye at the end of July 2007 => $60.9mln cash!

Most gold producers easily have a p/e of 20, which we could see if production was realised now. For the sake of argument look at 20 (15) times estimated 2007 profits => we get a value of $600mln ($450mln). Adding the cash etc, we get close to $700mln ($550mln).

Looking at 2008 estimates, the case becomes even more compelling. Compare this with the current Severstal offer of around $330mln and we see that a serious offer would normally be in the 400p to 550p range.

Note that this is a cautious valuation. 2007 is almost finished so Celtic must be pretty sure about the 90.000 ounces. It is not unreasonable to assume that they will be able to increase production in 2008. Also a p/e range of 15 to 20 for a gold producer is pretty conservative these days.

[sagem] 13/10/2007 14:54

So what price is a good price and what will the price be which will offered to secure this company.............somebody did mention or I remember reading at least £4.00

[tigerinvest] 12/10/2007 11:52

* An excellent portfolio of assets, with gold production expected to
reach 90,000 ounces in 2007 and planned to rise substantially in 2008; and
molybdenum production anticipated to reach 1.5 million pounds in 2007
* The proven ability to use the technologically advanced biological process for
gold recovery (BIOX(R)) for gold production in the Former Soviet Union
* A track record of generating profits from the trading of mining assets
* A strong financial position, with cash of US$34.4 million at 30 June 2007, and
a further US$26.5 million in cash received for the sale of Miheevskoye at the
end of July 2007
---------------------------------------------------------------------

Celtic Resources Holdings Plc

Letter to Shareholders


The below is the text of a letter being posted today to shareholders of Celtic
Resources Holdings Plc:


"Dear Fellow Shareholder,

REJECT SEVERSTAL'S PROPOSED OFFER


Background

On 5 September 2007, Severstal approached your Board with an unsolicited and
highly conditional potential offer of 220 pence per share for the entire issued
share capital of Celtic Resources Holdings Plc ("Celtic" or the "Company"),
which your Board unanimously rejected. On 19 September 2007, Severstal acquired
shares in the Company at a price of 232 pence per share. On 27 September 2007,
the Company announced that a third party, other than Severstal, had approached
Celtic with a view to making an offer for the Company. On 28 September 2007,
Severstal announced its intention to make an offer for Celtic at 270 pence per
share.

Your Board, who are being advised by Gleacher Shacklock LLP and Strand Partners
Limited, unanimously consider that Severstal's proposed offer of 270 pence
significantly undervalues Celtic.

Severstal has still to dispatch its formal offer document, but has taken the
extraordinary step of sending you a letter urging you to accept its offer,
before it has been made. Accordingly, your Board felt it was appropriate to
write to you now, rather than wait until Severstal sends you its formal offer
document. I will continue to keep you informed of all material developments
during the course of the offer.


Celtic's key attractions

Severstal's proposed offer of 270 pence per share fails to recognise the
Company's excellent strategic position, planned growth in production against a
background of a high and rising gold price and our cash rich balance sheet.

Severstal is trying to buy Celtic cheaply. It is trying to take possession of:

* A highly experienced management team with a strategy for driving shareholder
value
* An excellent portfolio of assets, with gold production expected to
reach 90,000 ounces in 2007 and planned to rise substantially in 2008; and
molybdenum production anticipated to reach 1.5 million pounds in 2007
* The proven ability to use the technologically advanced biological process for
gold recovery (BIOX(R)) for gold production in the Former Soviet Union
* A track record of generating profits from the trading of mining assets
* A strong financial position, with cash of US$34.4 million at 30 June 2007, and
a further US$26.5 million in cash received for the sale of Miheevskoye at the
end of July 2007
* Direct exposure to the financial benefits of a high gold price

Celtic's prospects as an independent company are excellent. Severstal is trying
to buy Celtic without paying for these prospects. You should not accept
Severstal's proposed offer.


Response to Severstal's letter of 8 October 2007

In its letter which was sent to you on 8 October 2007, Severstal made a number
of assertions which we can refute.

(a) Severstal wants you to believe that Celtic's Board did not properly
consider its proposed offer on 28 September 2007.

We did. Severstal first approached the Company more than 3 weeks beforehand,
on 5 September 2007. The uncomfortable truth for Severstal is that your
Board, and its advisers, unanimously consider that 270 pence per share
significantly undervalues your Company.

(b) Severstal claims that Celtic's board has a "confused strategy".

When Severstal first became a shareholder in Celtic in August of this year,
it went out of its way to praise Celtic's management team. In its
announcement of 14 August 2007, it said, "We think particularly highly of
Celtic's management". It has changed its tune since it decided to try to
buy the Company.

(c) Severstal asserts that if its proposed offer fails, there is a likelihood
that the share price of Celtic will fall significantly.

Severstal cannot know this. It is also choosing to ignore the gold price -
between 1 January 2007 and 17 September 2007 (the day prior to our
announcement of an approach), the gold price rose by approximately 13% and
Celtic's share price by approximately 24%. Your Directors consider that the
combination of rising gold production levels and a high gold price will
continue to underpin a strong Celtic share price in the absence of any
offer.

(d) Severstal has implied that I, your Chairman, sold shares in Celtic during
the summer.

I did not, and Severstal knows this to be the case.


Conclusion

Your Board, which has been so advised by Gleacher Shacklock LLP and Strand
Partners Limited, believes that Severstal's proposed offer significantly
undervalues Celtic and unanimously recommends that you should take no action in
relation to the proposed offer. In providing advice to the Board, Gleacher
Shacklock LLP and Strand Partners Limited have placed reliance upon the Board's
commercial assessments.

Your Directors' intention is not to accept Severstal's proposed offer in respect
of their own beneficial shareholdings, amounting in aggregate to 5,844,462
shares, equivalent to 10.47% of the Company's issued share capital.

When Severstal does send you its offer document and accompanying form of
acceptance, do not complete it.

In short, DO NOTHING.

I will continue to keep you informed of all material developments during the
course of the offer and will be writing to each of you again once the Severstal
offer document is published.

Yours sincerely,


Peter Hannen
Chairman

[tigerinvest] 12/10/2007 11:48

Finally some proper coverage:-)


Celtic board rebuffs Severstal
By Lucy Killgren

Published: October 12 2007 09:56 | Last updated: October 12 2007 10:52

Celtic Resources, the Aim-listed gold miner, on Friday moved to reassure shareholders over its share price and gave further details of its reasons for rejecting a revised potential bid from Severstal of 270p a share last month.

Celtic said in a letter to shareholders: "Severstal wants you to believe that Celtic's board did not properly consider its proposed offer on September 28. We did. The uncomfortable truth for Severstal is that your board and its advisers, unanimously consider that 270p per share significantly undervalues your company."

Celtic's comments came in response to a letter earlier this week from the mining arm of Russia's biggest steelmaker, to Celtic shareholders in which it said the board had a "confused strategy" and warned of the possibility of share price fall if the Russian group withdrew its indicative offer.

It also said that if it did not receive the 80 per cent acceptances from shareholders necessary for compulsory acquisition, as the largest single shareholder, it would run Celtic as a subsidiary.

Celtic rebutted Severstal's claims saying that Severstal had gone out of its way to praise Celtic's management team when it first became a shareholder in Celtic in August.

Celtic also moved to reassure shareholders over the possibility of a share price fall. The Russian steelmaker had said that if its £161m all cash offer was not accepted or withdrawn, Celtic's share price could collapse. Celtic on Friday said the combination of rising gold production levels and a high gold price would continue to underpin the share price in the absence of any offer.

A spokesman for Severstal said on Friday that the 270p offer represented a significant premium to the undisturbed share price before the company became a target. He also emphasised that it offered the certainty of cash.

Celtic has been fending off Severstal since September, first rejecting a 220p a share proposed offer on September 25, then days later took just half an hour to spurn a revised 270p all cash offer, saying it was pursuing a possible rival deal.

Celtic on Friday added that the proposed 270p offer failed to recognise the company's strong strategic position, its planned growth in production against a backdrop of a high and rising gold price and its cash-rich balance sheet.

Celtic said: "Severstal has still to dispatch its formal offer document, but has taken the extraordinary step of sending you a letter urging you to accept its offer before it has been made."

On September 27, Celtic said a third party, other than Severstal, had approached Celtic, although Celtic has not said who the new suitor is.

Earlier this week, Severstal said its 29.7 per cent stake could be used to "block any other party from acquiring full control of Celtic and could potentially dissuade third parties from making a competing offer".

Since news of the bid interest in Ireland-based Celtic, the company's share price has risen dramatically, from 149p in early July. On Friday, shares were unchanged in early trade at 278p in London.

Copyright The Financial Times Limited 2007

[papalpower] 12/10/2007 09:38

Yes, and it says Enquiries to Kevin Foo and JSB of EKA fame...........utter something or others in my view.

[wolstencroft] 12/10/2007 08:28

I particularly like this statement in their letter "A track record of generating profits from the trading of mining assets". I hust hope that ex EKA shareholders take it positivly (I think it means "we sell off our assets and then buy them back much cheaper, watch out VOG")

[chevyplus] 09/10/2007 21:12

tsmith9426
Today in the Press
Tuesday, 9 October 2007 08:53
CELTIC DEFENDS SEVERSTAL REFUSAL - The Irish Times is reporting that the board of Irish-registered exploration group Celtic Resources yesterday stood by its decision to reject a €233m takeover offer from Severstal.

The deal was turned down, despite the Russian miner writing to all Celtic shareholders offering to buy their stock.

Responding to the letter sent to shareholders and to the London Stock Exchange, where Celtic's shares are listed, a spokeswoman for Celtic said the offer still significantly undervalued the company.
She said the letter was not an offer document and, as a result, the position of the board was still that the bid was not in the interest of shareholders.

'The board's job is to act for all shareholders and they will not be distracted from their duties.'

Chevyplus

[chevyplus] 09/10/2007 11:17

TigerInvest
I think the Severstal P/Release was a P.R. letter that seemed to have a few things of interest in particular the mention that Celtic could be a subsiduary of Severstal.I think they have the bull by the horns.If anything with them in ownership of approx.30% of shares one would think they have a way to go before they can call the shots.Nice try.chaps.And then some bolloks about blocking anyother bidders.Once again they cant stop someone else from bidding but that of course will get some competition and ahigher price now we dont want that do we.
I would expect Celtic to have a letter to shareholders as well so things are on the move.
You are correct in your suggesting that higher production next year will make the share worth more hence the move by the Russians.As for Barrick one would think they will go with whoever gets control or just sit tight.Small fish for these chaps it would seem.Anyway some interest is being shown with Celtic and the so called city will see things going on and they will be in for their cut dont worry about that.
Lets wait for the next move.
Chevyplus

[tsmith9426] 09/10/2007 08:45

they need to come up with something tiger, no responce from yesterday

[tigerinvest] 09/10/2007 08:34

To summarise: "bull%^&$ walks, production talks".

That's why the timing of the Severstal bid is so perfect (or bad for us). They are pretty sure now that Celtic will reach very high levels of production in 2007/ 2008 and matching profits. As the market still wants to see profits before raising the value of this share, Severstal might succeed in getting Celtic at a bargain.

Maybe Kevin should come with some new (estimated) production/profit update?

[tigerinvest] 08/10/2007 15:41

PapalPower: "I am not looking at the financial side here, only the personal side of things, and it would be nice to see the board thrown out."
Kermit: "the city will never , NEVER give celtic its correct or near correct value because of the boards behaviour in the past"


Well guys, I feel a lot of emotion here. Do you people really think that 'the City' (as if it is 1 person:-) would agree with such statements? If my 10 year City experience thought me one lesson, it is that greed is the strongest emotion.

If 'the City' sees proof of a strong turnaround story (for example some solid growing gold and moly production), they will be opportunistic enough to hail Kevin & his team as a prime example of an successful management that under difficult circumstances made it in the FSU bla bla bla. And trust me, value would quickly follow....

[kermit] 08/10/2007 14:25

Well its not about value here as the city will never , NEVER give celtic its correct or near correct value because of the boards behaviour in the past.

So we are left with a serious bidder at 270p which i think is they offered 300p they would get their hostile takeover complete.

these share have to be taken off the market as they will never fullfil any dreams of ours.

I hope an a way that the management are ousted then they will have first hand experience of not being in control and at the mercy of someone else... just like some of us Eureka shareholders

[tsmith9426] 08/10/2007 13:28

they are only picking up crumbs, something as to give soon

[richardly] 08/10/2007 10:45

I'm not selling... I was in for the long-term and still am. Unfortunately, at the same time, none of this is good for long-term holders.