Circle Property Share Discussion Threads

[simon54] 10/4/2006 10:58

Ash - what a brazen hypocrite you are! You remove anybody from your thread who questions anything, talk pompously about threads being 'only for information' (selected by you, of course), then come on here with ill-researched deramping motivated by pique.

You are a despicable hypocrite and you're losing credibility with a whole new generation of investors.

Simon.

[pinhead3] 10/4/2006 10:52

Cheers wdurham, good to have a second view point that supports my valuation.

[nikesh2] 10/4/2006 08:20

can only buy 2.5k online!!!!!how the tide turned!!!!

[wdurham] 10/4/2006 08:10

pinhead -

I have researched the Filipino tax regime thoroughly in respect of another investment. I've also been looking at CRC for several months and have read the documents to which you have referred me. My own NPV for Hinoba-an, which does take into account the various government taxes and royalties, is not far removed from the 1998 figures. A long-term price for copper of around $1.25, which is now looking relatively safe, improves the figures significantly. The great unknown is the rate at which construction finance will be repaid and the costs of servicing that finance. This will become clearer at the end of this year.

Ash -

Not so. Read a bit about the Philippines and their approach to mining projects. A company with a marginal project might struggle to make a decent return for shareholders, but no marginal projects are permitted in the first place.

[nikesh2] 10/4/2006 08:08

pinhead seller has cleared, surprisingly but may come back- im guessing more institutional build up at these levels because level 2 looking very strong and can hardly buy anything online!!!!!!!

[pinhead3] 10/4/2006 08:06

10k/5k seller is still feeding the market, more sideways trading today by the look of it.

[mr ashley james] 10/4/2006 04:28

Wendy,

So FA Chance of a Mining Co making a Profit, I retain my AVOID Philipinnes stance then.

Cheers

Ash:)

[pinhead3] 09/4/2006 21:25

LGB was a learning experience for me so I don't feel that it was a complete waste, even though the money I lost would be better in a home like CRC!

Fortunately I've already made back my LGB losses on VOG, I hope CRC repays you in the way I expect.

[nikesh2] 09/4/2006 21:15

pinhead i must say that i only invest i stocks that i know inside out and without your help i wouldnt have been able to do this!!!!
i only wish our langbar funds could come back earlier so i could invest in this stock to recover my losses!!!!!!!!!!!!!!!!1

[pinhead3] 09/4/2006 20:38

Just wanted to add that on Hinoba-an the 1998 survey was based on a long term copper price of $1.00/lb compared to $1.25/lb for kinsenda & current price 2.63/lb. Plus CRC have already found 10% more copper resources part the way through their current survey. Both will significantly improve the NPV of the project.
My valuation is reduced by 3% royalty on all copper sold ($60m) & the 92.5% share that CRC holds.

The discounted valuation of 67p is based on a fully diluted valuation discounted by 50% to cover the unknown risks.
So even if CRC end up paying tax at rate of 35% taking into account the above a 67p valuation is still conservative.

By December we will have a bankable schedule which give a more accurate value on Hinoba-an.
Given that CRC's current share price is just below the value Kinsenda on it's own we have a long way to go to see the full value of CRC in the share price

[pinhead3] 09/4/2006 18:07

wdurham
The valuation of Hinoba-an is based upon CRC's 1998 scoping study which gives a NPV of $243m (IRR 28%).


Why not direct your question to CRC they are very helpful.
There is also extensive information on Hinoba-an in the AIM placement documentation on the CRC website which may shed some light on it (they do mention the 1995 act in it).


I'm bit tied up at the moment to trawl through it, however I do remember there is a structure in place to comply with Phillipine regulation regarding foreign investment.

[wdurham] 09/4/2006 17:44

Pinhead -

When valuing Hinoba-An, have you factored in the government take? It is the Filipino government's stated intention that around 50% of the benefit from any mining operation should go directly from the mining company to national, regional and local governments. (They expect a further 10% to filter down eventually, due to higher income tax and social security payments from workers, more employment, and other such internal items which would not have any direct inmpact on CRC.)

The headline tax rates are 35% corporation tax, and 2% excise duty off the top on sales revenue. There is likely to be a good tax break for the first 5 years (or until capex finance is repaid, whichever comes first) but the excise duty is non-negotiable. In addition to this headline take, there are numerous other levies, particularly environmental/social funds which have to be set up at local level, 2% community tax, and a wide range of smaller taxes on occupation of land and property values.

There's a lengthy discussion here, which spells out most of the ways in which the government will extract value for Filipinos from any "foreign investor"!



It's worth reading the entire document, but to summarise:

Payments to National Government

· 35% Corporate Income Tax

· 2% Excise Tax on actual value of minerals produced

· Custom duties and fees under the Customs and Tariff Code

· 10% Value Added Tax on imported equipment, goods and services

· 5% of the actual market value of the minerals produced as Royalty, in case of mineral reservations.

· Documentary Stamp tax depending on the nature of transaction

· Capital Gains Tax equivalent to 10 – 20% of the gain

· 15% Tax on interest payments to foreign loans

· 15% Tax on foreign stockholders dividends

Payments to Local Governments

· Local Business Tax at a maximum of 2% of the gross sales

- Real Property tax equivalent to 2% of fair market value of property based on an assessment level (plus 1% special education levy)

- Registration Fees

- Occupation Fees equivalent to 50 pesos per hectare per year

- Community Tax - 10,500 pesos maximum per year

- Other Local taxes, the rate and type depend on the local government concerned.

Payments to Other Filipinos

- Special allowance as defined by the Mining Act and its IRR; and

· Royalties to indigenous cultural communities, if any.

[pinhead3] 09/4/2006 12:32

I found this interesting link on Haib from 2004, before CRC bought in.



This section in particular.

'The Haib copper project contains a large porphyry copper-molybdenum
deposit hosted within quartz-felspar porphyry dating back to the Archean
age (approximately 2 billion years). The technical report confirms that
the historic indicated resource in the high grade section of the deposit
totals 292 million tonnes at 0.46% Cu, which is in excess of 2.9 billion
pounds of copper in situ.'

This is interesting as on the CRC website they are quoting an earlier (1996) survey that showed 2.0 billion pounds of copper. With a 60% share in Haib the higher figure would add another 33p to the fully diluted share price or 39p undiluted.

Obviously this is important for the upcoming METS survey in May & a potential (45%) upgrade in the company Haib resources. Certainly are reason to Hold if not accumulate further.

The actual survey.
www.afri-can.com/files/Haib%20Final%2043-101.pdf

[pinhead3] 09/4/2006 11:47

Nikesh
It depends on how much longer the holders from the placement continue to feed the market & take profits.
I'm not sure Friday is the end of it even though the turnaround was a good sign.
It could well be that they have a set price of 95p+ to take profits & the MM pulled up the price to encourage the PIs to buy.I suspect we could therefore trade in the range of 90-100 for another week or so, only time will tell.

I did expect CRC to fall throught the 90p mark after such a steep rise, before climbing again.

However once the profit takers are gone then I agree 120+ is on the cards & probably by the end of April.
Depending on the Haib METS survey we could see 130+ by the middle/end of May.

The high price of copper & commodities in general is putting a strong focus on mining stocks. Once the big boys of BHP, Xstrata,Rio Tinto, etc start to look at full value the focus will inevitably shift to the undervalued smaller players like CRC.

[nikesh2] 09/4/2006 11:12

pinhead what are your predictions nxt week
i thought the price would have drifted to the 80p mark, but the turnaround on friday was massive. im going for 120p within next 2 weeks

[pinhead3] 08/4/2006 16:05

This is taken from the AIM rules July 2005 which basically says the same thing fbrj. I agree there may well have not been any changes to qualify or there may well have been & the company was not notified.

Rule 17
An AIM company must issue notification without delay of:
-any relevant changes to any significant shareholders, disclosing insofar as it has such information, the information specified by Schedule 5.

Relevant change = Changes to holding of a significant shareholder above 3% which increase or decrease such holding through a single percentage.

Significant shareholder = A shareholder 3% or more of any class of security

Schedule 5
- Identity of shareholder
- Date disclosure was made
- Date on which the deal or relevant change to the holding was effected
- The price, amount & class of the AIM security concerned.
- The nature of the transaction
- The nature & extent of the significant shareholders interest in the transaction.

[fbrj] 08/4/2006 14:11

Hope you don't mind me butting in and adding my tuppence worth....!!

The obligation under the AIM rules is when a substantial shareholder (ie holding over 3%) notifies company, the company must notify the market through an RNS. If the company is not notified then it is not under any obligation to make any announcement...although I have seen cases where companies have calculated a changed holding and subsequently had to release a correcting announcement when the right information has been supplied by the shareholder! In other words, the onus is on the shareholder to notify the company and has nothing to do with whether the co is uk registered or not. Foreign cos may have more overseas shareholders (who may not be familiar with the AIM rules or their disclosure obligations)...which is possibly why less disclosure may seem to be forthcoming in those cases

The other point to note is that notification is only required when a holding goes THROUGH a percentage point. ie a holding change from say 4.9% to 5.1% should be notified, whereas a change from 5.9% to 5.1% does not.

[jon389] 08/4/2006 13:46

Thanks Nikesh and Pinhead for your speedy replies

[pinhead3] 08/4/2006 13:36

Wdurham
There may not be a duty to inform if the shareholdings fall below 3% but it is good practice & I have seen it before (eg WGP this year).
I would be surprised if none of the previous holders took a position in the new placement, it would certainly be easier to convice them than completely new interested parties.

I think the main problem is the fact that as CRC is a non UK registered company holders don't imform the CRC as readily as they would for a UK company.

It's a shame that this information is not available as it would certainly give us an idea as to who was selling into the strength over the last couple of days.

[wdurham] 08/4/2006 13:20

Pinhead -

I'm not sure that major shareholders have a duty to inform the company if their holding is diluted below 3% as the result of a placing. The rules are formulated to keep shareholders informed of buying or selling, rather than passive dilution.

And it's quite possible that no-one DID take more than 1.65 million shares in the placing - only 8 million units were placed.

Still, finals are due within the next couple of months, and an updated list of major shareholders will almost certainly be included in the Annual Report.

[pinhead3] 08/4/2006 12:16

I've had a reply to my email regarding changes in shareholding of 3%+

'From : Jeanne Usonis
Reply-To :
Sent : 08 April 2006 09:07:41
To : X
Subject : RE: Update on major shareholders


X,

We will release a notice via RNS, anytime we are notified that a shareholder
has acquired stock that places them above the 3% level.

Best regards,

Jeanne

-----Original Message-----
From: X
Sent: Wednesday, April 05, 2006 9:21 PM
To: [e-mail]
Subject: Update on major shareholders

Jeanne

With the recent successful placement, are there any plans to update the
market with a list of the material (3%+) holders of CRC? Or is it possible
to add a section to the company website?

I understand that non UK registered companies on the AIM are not required to
reveal this information but as an investor knowing which companies /
individuals are buying / holding the shares gives a great deal of confidence

in the company.

As ever I appreciate your help & swift replies.

Best regards
X'

This is a strange response as they should have notified by now that the previous holders who had 3%, that didn't take place in the placement , no longer have 3% plus they should also have released anyone who took more than 1.65m shares in the placement.
I'll go back to CRC to ask for clarification, however CRC are dependant upon the holders notifiying them of their holdings before they can update the market.

[pinhead3] 08/4/2006 10:17

Jon389
The Haib METS feasibility study is due around the middle of May & the bankable schedule for Hinoba-an is due by December.
Haib study, if good should have a similiar effect on the share price as the Kinsenda study in February. Hinoba-an bankable schedule should have a much bigger impact.

Nikesh
The timing of the release of the news on Kinsenda was exactly timed with when the placed shares were available to be traded. You can make your own mind up whether that was a coincidence!
There was very strong buying the following day which must have been soaked up by profit taking from the placement otherwise the share price would have rocketed.

Friday was very encouraging with the turnaround in the share price in the afternoon.
Either the sell orders from the placement holders taking profits have dried up or the MM raised the price to encourage PI buying / stop them selling. After such a strong rise in the share price over the last week or so a period of consolidation in the price around the £1 level is not a bad thing.

[nikesh2] 08/4/2006 08:56

jon389
after the news came out on kinsenda upgrade the price didnt move up!!!
very shocking
but after the movement on fridays share price im guessing we have big buyers back in the market!!
we shall find out next week.