Asa Resource Share Discussion Threads

[silenzi01] 29/9/2019 14:23

Any news from the JA? Been impossible to reach them last week. hxxps://www.newzimbabwe.com/bnc-finalising-takeover-bids-amid-tagwirei-shadow/

[iamald] 26/9/2019 18:02

Skidaddle; I may have even less knowledge, but everything I understood at the time seemed to indicate 4p to 5p was more realistic, with 8p not impossible. Who knows what the present/future possibles are? Over 2p will put us above water.

[skidaddle] 26/9/2019 17:32

I was asked yesterday evening, in a private email, what my current thoughts were on ASA's valuation. As it took a time to type, I thought I would copy it here too.
-----------------------------------
Almost 2 years ago, the administrators posted this:
“As announced on 24 Nov 2017, the joint administrators have received a non-binding and conditional offer from a substantial publicly listed company.

'The joint administrators continue to believe that if this offer proceeds to completion, all the creditors of the company would be paid in full and from the balance of the sale proceeds, Asa's shareholders could potentially receive more than 2.1 pence per share.”

This was at the time when the amount owned to creditors was larger than it is now, some of it has been paid off. Also some claimants have now been seen to be deemed not credible. On top of that, the nickel price at the time of this announcement was as low as $10,900 per tonne, it is now hovering between $17,000 and $18,000 per tonne. The gold price at that time was around $1250, at which price Freda was still profitable. Some of the debt has also been paid off since then.

I believe that RPI who made the offer was in cahoots with Ning who, probably gave RPI inside knowledge of the companies that ASA/Headco owned. RPI deny this but that is what I and probably the administrators believe to be true.

It is also true that when RPI’s offer failed even though they tried and succeeded into frightening some of the shareholders to sell at 2.1p, they appealed and got a joint administration, which one assumes is because they want to make sure that the individual companies within the group are not sold off cheaply. After all, RPI are now in the same boat as the rest of us and probably the largest shareholders in Headco/ASA.

The recent report that the admin are in negotiations with a company that wishes to take over both Freda and our Bindura holding for a reported $60-75m each may or may not be true and it doesn’t mention whether the purchase price includes taking on any debt/debtors. The price mentioned was before the big rise in the nickel price, which I think will remain close to the current levels for the foreseeable future, due to issues that certain countries have with production of the metal and apparently global stocks of the stuff are tight and getting tighter.

With all that, I will stick to my 4-6p target with a possible surprise to the upside. I think RPI knew they were getting it cheap for 2.1p even when the company was on its knees, which it isn’t now.

But then this is all my opinion and of no more value than anyone else’s. It is based on what I would hope to be sensible reasoning and logic and a big dollop of common sense!

[skidaddle] 25/9/2019 18:53

BIND • 0.18 ▴ 0.0240 (15.38%)

Market Capitalization: 223.14m

[skidaddle] 25/9/2019 08:31

Interesting:

BIND • 0.1560 ▴ 0.0259 (19.91%)

Market Capitalization: $193.39m

Date, Volume, Close, Change, Change%
2019-09-24, 13,700, 0.1560, +0.0259, 19.91%
2019-09-23, 59,500, 0.1301, +0.0201, 18.27%

[timgw] 13/9/2019 18:28

The administrators have never shown any interest in communicating with shareholders. The next legal update is due just before Xmas.

[silenzi01] 13/9/2019 12:47

Any update from Admins, anyone? Nickel price continue to surge upwards

[skidaddle] 09/9/2019 11:22

We don't own all of BNC.

The 'reliable' source that suggested those figures may not be that reliable either.

The BNC management can't be too happy that the 'reliable' figures value their company less than the market does either.

If negotiations are ongoing then the admin aren't going to tell you anything.

The debts are being paid back and may even be accelerated and on top of that, some debts may still be written off completely due to the fact that they have no legal standing. That though will have to be decided through the courts.

[silenzi01] 09/9/2019 10:28

Skidaddle, your explanation that Admins are looking for $60-$75m for each of Freda and BNC still does not explain why Admins would negotiate for only half the value of BNC's current market cap. As for your believe that the firm can trade out of its debt is definitely something we should not be in favour of unless the business is re-listed. And as for looking for management to bring it out of administration, the Admins should also be doing this. They are paid ridiculously handsomely for the little work they do and they don't sound at all skilled at negotiating. Speaking to them on the phone makes me feel sick. The lot of them sound like clueless Joe's.

[skidaddle] 07/9/2019 10:28

The only problem with that is finding a trustworthy management team.

The Chinese need not apply.

[casabella2] 07/9/2019 09:27

If things are looking so rosy what is there to stop the company re listing ,pay off the debts or come to some agreement and carry on trading as a going concern.We are only in administration at the request of the company to stop the thieving Chinese.

[skidaddle] 07/9/2019 08:22

The admin do not have to sell as both companies are very profitable now. They could both trade out of their debt in time.

Also, if the reporter is correct about a 'reliable' source, I think his wording is wrong as I think he means each of rather than 'both', in the statement "$60-$75m for "both" BNC and Freda" as the admin have already said that selling either would pay off the debt completely with creditors getting 100%.

I doubt also that the 'reliable' source were either of the administrators.

Sounds like someone is trying to force the issue but the price of gold and nickel is working in our favour not theirs.

i'm sure we will find out eventually what's going on.

[petefurlepa] 07/9/2019 06:16

So production is getting better, good to know !. Guess a stitch up was always on the cards given the "tax" problems. Its hardly the administrators fault the company is in Africa and mixed up with the Chinese. Should have taken the 2.1p per share in hindsight.

[trevorm2] 06/9/2019 23:11

Peanuts. Crumbs for shareholders. Never trust administrator's to get a good price for anything.

[plasybryn] 06/9/2019 23:08

What does this equate to per share?

[silenzi01] 06/9/2019 19:08

BNC currently at about $140m... in the article, admins are holding out for about $60-$75m for "both" BNC and Freda... what the hell is going on here???

[silenzi01] 06/9/2019 19:06

hxxps://bulawayo24.com/index-id-news-sc-national-byo-170022.html

[silenzi01] 05/9/2019 17:02

The sale should be at prevailing BNC share price at the very least. It would be ludicrous if Admin sell at below market price which would not make sense.

If we think about normal takeover of a listed firm, there is usually a premium. The Admin surely must be expected to negotiate for a premium price per share, especially when nickel price is making a come back and with upward trajectory as is the current market consensus.

[skidaddle] 05/9/2019 14:00

Understanding Sales and Purchase Agreements

An SPA serves as a basis for a transaction to take place, providing a framework for how the transaction will proceed, what is included in the transaction and, if necessary, what is excluded from the sale. It allows the buyer and seller of a particular asset to negotiate, and ultimately agree upon, a proper price. While not required for every transaction, SPAs are often used for large single purchases or frequent purchases across a specified amount of time.


I doubt a proper price has been negotiated yet.

I seriously doubt it would be less than the current value of BNC. Currently $142.56m as it would no longer be seen as a basket case and must be very profitable now.

There would probably be a clause about the price of nickel at the point of acquisition too I would imagine. And of course it would be a controlling interest, which should be worth something too.

[trevorm2] 05/9/2019 12:49

www.newsday.co.zw (business)

[hute17] 05/9/2019 12:11

Why should the administrator sell BNC so cheaply? As parkhurst pointed out, both BNC and Freda Rebeca must be very profitable now. His valuations would correspond to a share price of 2,6p if valued like Caledonian and 13,6p if valued like Zimplant

[trevorm2] 05/9/2019 11:05

Bnc snapped up by zim mining company,probably for peanuts.

[silenzi01] 04/9/2019 15:12

Any chance our amazing administrator, who have already been paid millions, might be talking to PAF??

[parkhurst484] 04/9/2019 12:22

Today it might be worthwhile to look at how ASA’s Zim ops – so just FRM and BNC – under normal circumstances would have been performing at current market prices of the metals. I know the mines, have visited them both and have been a shareholder since 2011. Measured against the detailed financial picture I had, being relatively close to the board, in December 2017 following performance would now have been realistic:
FRM (at only 65k ounces production)would produce net after tax profits of US $ 14.6m (for ASA’s 85%)
BNC (at 6500 tons output) yielding net after tax profits of US $ 14.2m (for ASA’S 74%), latter without benefit of the nearly ready smelter.
That would amount to total annual after tax profits of nearly US $ 29m, in a prudent assessment.
If you apply to that the P/E ratios of other ZIM mining companies you arrive at substantial valuations for ASA:
Caledonian Mining’s P/E of only 1.9 would value ASA's Zim ops at 55 $ million, Zimplats’ P/E of 9.8 would put it at 284 $ million. So arguably ASA's Zim ops must at least be worth over a 100 $ million. It might prove worthwhile for RSA-based Pan African (itself on a P/E of 21)to take another look at ASA's Zim ops.

[petefurlepa] 01/9/2019 04:54

I think the $6000 is a typo. In their annual reports I think the company mentioned $70,000 a tonne.
In the past under MWA, they wanted to develop Hunters Road, the refinery and build a power plant (another big current problem possibly causing the price drop Friday). No idea what this would cost and for most of us just live in hope of getting anything back.