Carlton Res. Share Discussion Threads

[budevenwiser] 14/5/2008 11:31

imo roks volume has dropped considerably so mm's can play about with the price at will then get them down low enough for ubs to buy some more

[roks] 14/5/2008 11:25

All my gains are slowly disappearing........whats going on?

Why arent pple buying this, if its worth at least 55p?

[pbracken] 14/5/2008 11:18

Why, GB? CBM is going to motor on anyway - probably far exceeding CLN's potential. A No vote would see us back at 30p for a decent period - and no one wants that. It's a judgment call, I know, but I reckon CLN would struggle to get above 50p tout seule, whereas CBM is worth 260p given its investment in WTN alone.

We need a coup de grace - and quickly.

[gb904150] 14/5/2008 11:11

How about everyone just vote 'no' and we see how CLN are trading in 2-3 years time with the full effects of stronger coal prices being felt?

High coal prices aren't going to be a permanent phenomenon and perhaps we're benefiting from an strong oil-induced spike.....but demand is strong and new mines aren't created in a matter of months.

A number of reports suggest current coal prices may be sustained for the next 18 months.

I would certainly rather own appreciating coal in the ground than depreciating GBPs in the bank atm, whether it is extracted now, next year or in 5 years time.

[papillon] 14/5/2008 10:59

Hope I'm wrong but from the look of the chart and the current share price I think we will be very lucky to get 60p worth of CBM shares. Might have to settle for around 55p's worth. CBM are obviously waitng for their share price to rise further before making a concrete offer so they get CLN on the cheap.

[fidra] 14/5/2008 10:25

Thanks for the reply Volvo.

[blueblood] 14/5/2008 09:35

Why the delay just get it done ffs!!!

[volvo] 13/5/2008 14:59

Hello fidra this company could never be independant with CBM owning 35pc and options on another 7pc.It is the ownership of CBM already in all but name.

[fidra] 13/5/2008 12:59

I was moving to the thought that it would be better if we remained "independant".As new contracts are only really six or seven months away.These could see a marked change in the financial position of the company.

[dannyboy123] 13/5/2008 12:53

Probably not in any way at all reg but I am excited and have confidence in CLN. I agree CK, I don't mind waiting to get a fair price and the time frame you have mentioned seems sensible.

[reghollis] 13/5/2008 12:34

That was quick. Thanks.

[captain kurt] 13/5/2008 12:33

This week or next week at the latest imo

[reghollis] 13/5/2008 12:32

CK what time frame we looking at?

[captain kurt] 13/5/2008 10:47

Danny we have waited this long because CLN want a fair price for their shareholders. I think we will get it

[reghollis] 13/5/2008 10:24

how does that help me DB?

[spinnerparx] 13/5/2008 09:42

CK
After all your statements that CLn is dirt cheap, that it is a cheap way into CBm and that the best thing to do is switch CBM into CLn, have a look at the posts below from the CBM board that shows a logical reason why you may be barking (up the wrong tree).
Tamtoni - 13 May'08 - 01:26 - 6962 of 6966


Phil - your post 2388 got me thinking properly.

Originally I thought that CBM would sell off WTN to get their share price up as far as possible before taking over CLN in a share for share deal thereby getting it as cheaply as possible. However, your reminder that Nemi effectively owns a share of the Belcourt Saxon JV got me thinking that it will be CLN acquisition that is completed first (and not because they are doing a good job at keeping its share price down but because CBM can extract most value for its shareholders this way).

My thoughts run as follows:-

Anglo own 65.9% of Peace River Coal (which has 50% of the Belcourt Saxon JV for which estimates of its surface mineable resource based on old data is 280m tonnes). Anglo is the operator and manager of PRC, so effectively calls virtually all the shots. Hillsborough Resources own 14.1% of PRC and Nemi 12% (the last two equity positions being diluted from 20% each late 2007 after both decided not to contribute all their pro-rata share of the $198m 2008 expenditure budget – which I would presume is heavily influenced by Anglo!).

Doing the sums, Nemi's 12% share in PRC is worth $52.2m.

[Note: The Prefeasibility Report focusing on the Belcourt North & South blocks with annual production of 6m tones was due by end quarter 1 2008 – but it has not officially come out (is Anglo delaying it?).]

It is logiocal to think that Anglo wants to acquire as much of PRC as possible and then also probably WTN's 50% interest in Belcourt Saxon.

So, to give it leverage to get agreement from Nemi to sell to them the 12% in PRC, Anglo buys CLN's 20% in Nemi once CBM has taken CLN over. [Note Nemi is not flushed with cash so probably could not buy the 20% itself.]

It then does a deal with the buyer of WTN for the other 50% of Belcourt Saxon, thereby reducing the acquirer's cost of acquisition whilst still leaving it a sizeable coal mining business that is planned to double production over the next 3 years.

If Anglo do not think that they can do a deal with the preferred bidder for WTN then they will just step in at the 11th hour and over-bid. After all, they probably have both the best idea of what WTN is worth and the greatest amount of synergies to extract and so can justify offering the highest price.

So in conclusion, it looks to me like the better place to be is CBM rather than CLN as CBM will realise greater value after the takeover – even now after the respective price moves in the two shares over the past few days.

Sorry if this does not fit with everyone's wishes, but it does seem to fit the facts as I see them.



phil0001 - 13 May'08 - 07:21 - 6964 of 6966


Tam, I've always thought CBM was a better place to be than CLN but that's just my opinion. I don't agree that CBM is doing a good job of keeping the CLN price down. I think it's actually inflated the CLN share price because of the bid speculation, because I think CLN are struggling to make any profits this year due to long term fixed contract prices at lower rates. Namely about $60 for thermal and about $80 for Met. And they also need a fresh cash injection. If it wasn't for the bid I don't think the price would be as high as it is. Remembering that CLN was around 16p and trending down when the bid possibility came to light and they have about tripled from there.

With the Belcourt/Saxon deal it is possible we (WTN) could sell our half to Anglo and have a very healthy input of cash. Or we could buy them, or mine it together, we just don't know that right now. The delay is more likely to be from the upgrading of reserve estimates as more coal becomes cost effective to mine with the higher expectations for coal price going forward.

P1


Tamtoni - 13 May'08 - 09:23 - 6965 of 6966


Good Points Phil.

For WTN my money is on the company being sold as this is the best way short-term to maximize the value of CBM's shareholding (plus of course Audley would probably like to crystalise some profits after all their hard work).

Re their development of Belcourt Saxon and the other properties in their stable, it depends on the timing of the cashflow from production, as it is quite constrained at the moment (note the loan a couple of weeks ago) and the aims of the Morgan Stanley preferred bidder.

The Anglo question revolves around who the bidder is and whether they agree at the same time to sell on Belcourt Saxon to Anglo.

If, as I expect, the bidder is an Indian or Chinese consumer then my money would be on Anglo over bidding .

Anyway, it looks like it is onward and upwards this week (hopefully my comment is not a commentator's jinx!).

Good luck.

[papillon] 13/5/2008 08:57

Cheers VOLVO.

[volvo] 13/5/2008 07:50

pap fwiw I talked to the sole adviser to the independant director,Cenkos,and asked how determined was Randy Eppler to get a fair deal from CBM.He said they recognised the value within CLN and were putting the case for fair value robustly.I got the "wait and see" statement also.

[papillon] 12/5/2008 22:10

Capt Kurt. You seem very confident that a good deal awaits us and it is better than 4 to 1. How can you be so confident? Do you trust your source of information? How soon is "soon"? This week, next week? Is the Independent Directors diligence and determination to extract the best possible terms from CBM in the circumstances the reason for the delay in the issue of the terms of the offer?

[captain kurt] 12/5/2008 20:26

ALL,

I am led to believe that our independent director has done a good deal...a little more patience...we will find out very soon...it is not 4:1 !

advfn reports after hours a 100k buy at 8.17am

[eastwind] 12/5/2008 20:18

I will also say no if the conversion is worse than 3 for 1.

[lefrene] 12/5/2008 20:01

Thanks VOLVO, thats about the most informative thing I have read about this CBM/CLN situation. If there are any original investors out there they will be looking at 3 for 1 as an absolute minimum.

[volvo] 12/5/2008 18:11

From Minesite 5 weeks old but the last paragraph is coming true and fwiw I think we will get 4 for 1 when CBM is 220p ish.




April 07, 2008

Cambrian Mining Tries To Extricate Itself From Its Own Tangled Web... Yet Again


By Alastair Ford



It must have been more by accident than design that Mark Burridge, chief executive of Cambrian Mining, chose to release the results of his company's strategic review on the very day that the market learned that BHPBilliton and Rio Tinto are likely to raise the price they charge customers in the Far East for coking coal by 200 per cent. Cambrian has plenty of this high quality coal, also known as metallurgical coal, inside key strategic investment Western Canadian Coal. The Perry Creek and EB deposits on Western's Wolverine property in British Columbia hold a total of 26.7 million tonnes of saleable export metallurgical coal, according to a 43-101 report compiled in 2006. There's also metallurgical coal at two assets belonging to 34 per cent-owned Coal International in West Virginia.
So fair play to Cambrian - coal's a nice space to be in right now, as supply is tight and likely to stay that way, and that's something the founder directors have been banging on about for a few years now. Cambrian's certainly no Johnny-come-lately cashing in on the recent strength. It's ridden out highs and lows with Western Canadian and Coal International, and now looks set to reap the benefits. Except there's a catch, and there has been all along. Add the value of Cambrian's stake in Western to the value of its stake in Coal International and you get a back-of-the envelope 250p per share. Fine and dandy. Then consider that Cambrian's trading at a mere 156p, and it starts to look a little more complicated. Because aside from these two well-set, if historically troubled, companies, Cambrian also owns a gold mine in Australia, a sizeable stake in UK coal miner Energybuild, a future royalty on any production from Phulbari project in Bangladesh, and a stake in Xtract Energy, which owns oil and alternative power projects.

So is this an opportunity to second-guess the market, and buy into decent assets on the cheap? You might think so, but Cambrian's been trading with what Mr Burridge terms "the value traps" associated with "a holding company discount" for as long as anyone can remember. If nothing is done, that huge discount to net assets looks like staying around forever.

Something is being done, though, hence the strategic review disclosed to the market on 7th April. In simple terms the plan is for Cambrian to transform itself from a company caught at the centre of a tangled web of investments, into a straightforward mining company. One gets the feeling it will never be quite that simple, as there are little unquoted investments all over the place, but the basic premise is sound. According to Mr Burridge the plan is to end up with four mining assets – the two Coal International properties West Virginia, the Australian gold-antimony mine, and a consolidated fifty per cent stake in Energybuild, which operates in Wales. To get there Cambrian proposes to make an offer for 100 per cent of Coal International, and quite possibly to divest itself of Western Canadian entirely. That latter option is still under active consideration, but it is mooted, and according to Mr Burridge the decision as to what to do with Western will ultimately come down to "whatever generates the highest look-through value". In other words if Western's dividends look more valuable than any offer for the company, then there's no reason not to stick with it. But with coking coal rocketing up in price, and consolidation already a feature on the ground in the geographical area in which Western operates, someone's bound to express an interest. We'll have to see what comes on to the table, but despite the repeated bale-outs Cambrian seems to hold no sentimental attachment for the company.

That's a lot easier to say now, of course, since Western's shares have gone up more than fivefold over the past four months or so. Now at 246.5p Western's share price is beginning to hit the heights that all the London analysts who originally supported it back in 2005 said it would - just a few years too late. Still, for a while it wasn't clear whether Western would come good at all, and most of that original London support has long-since drifted away. For the last couple of years the interesting thing about Western Canadian has been how much of a drag it's been on Cambrian's share price, rather than how the company has been doing in its own right. One reason for that is that Western's hardly made an effort to look after its Aim-listing, whereas Mr Burridge, for all the woes he inherited from the previous Cambrian management, is at least pretty good at staying in touch.

So from the point of view of a London investor, selling Western Canadian, as long as the price is right, and taking Coal International back into the fold, makes good sense. It simplifies things, gives the company a focus, and more importantly gives it a solid basis on which it can be valued. Cambrian's shares have duly been on an upward trend, as the Western interests are slowly re-negotiated and rationalized. The proposed sale of Xtract makes sense too, as no-one's really sure what it does, and although the market can decide what it's worth simply by trading the shares, whether the long term potential is riches all round, or rescue fundraisings all round, is extremely hard to say.

The potential catch in this well-written, but yet to be realized plan, is that Coal International shareholders who bought in at the April 2005 listing price of 75p may demand that Cambrian's offer comes in at a similar or better level. After all, it was Cambrian that foisted Coal International on the market in the first place. The current Coal International share price – 40p at the time of writing – already has the potential Cambrian offer priced in, so it very much looks as though those original Coal International investors are going to lose their shirts. It remains to be seen whether they'll stomach that outcome because they buy Mr Burridge's argument that: "we're giving those shareholders a clear and more meaningful way to get value on the table, as opposed to trading out of a small illiquid Appalachian-focussed coal miner". Coal International certainly wasn't marketed in those terms when the Cambrian boys originally hawked it around town with certain Cenkos brokers in tow. Still, we are where we are, as they say, and Mr Burridge's arguments are not without merit. What Cambrian will look like this time next year – who can say? But at least now we know what it wants to look like – a real life mining company. And why not, in this boom?