Ferrex Share Discussion Threads

[clinton baptiste] 01/8/2014 08:31

From Wiki;
A term sheet is a bullet-point document outlining the material terms and conditions of a business agreement. After a term sheet has been "executed", it guides legal counsel in the preparation of a proposed "final agreement". It then guides, but is not necessarily binding, as the signatories negotiate, usually with legal counsel, the final terms of their agreement.
A term sheet implies the conditions of a business transaction, as proposed by a party. It may be either binding or non-binding.

Anyway, I'm labouring the point.

[clinton baptiste] 01/8/2014 08:23

Thanks guys, I stand corrected. Why then did the interim statement in June refer to the term sheet as binding if in fact it wasn't?

[gheebee] 01/8/2014 08:15

Crossed there! You can see I agree with you.

[gheebee] 01/8/2014 08:15

A Binding Term Sheet that has as it's final term that either Party's Board can say no on any grounds and without giving a reason is binding in name only. Still, it served to allow funds to be raised that will see them through the year.

[cyprussteve] 01/8/2014 08:11

Hi CB.
Not totally correct - the RNS actually stated -
"The Agreement is subject to final due diligence, completion of a detailed legal agreement, the approval of all parties' boards"
Thus there was always a way out for either party.
Ciao
Steve

[clinton baptiste] 01/8/2014 08:02

Not sure I believe anything they say after announcing in June that they had a binding term sheet with Anglo when clearly it appears they didn't

[gheebee] 01/8/2014 07:20

Thanks indeed. I'm now wondering if the complete absence of explanation from AA/K actually masks a corporate decision to make a bid instead.

GB

[alan@bj] 01/8/2014 06:42

Andy and Steve - thanks for your posts 4012 and 4014.

[cyprussteve] 01/8/2014 03:50

Hi baikinman,
I also blame nobody for making their own decisions as to whether they invest or not. That is totally their own right , and long may it be so.
To me, the issue is simple - either one has confidence in the BOD and the projects - in which case the current all time low share price due to the very factors you refer to - of "investor sentiment and willingness to give benefit of the doubt on their timescales and expectations" represents an outstanding investment proposition, OR - it indicates a share to avoid until tangible growth progress is announced, therfore de-risking it, but paying a higher price..
I am buying, and continue to do so at the current share price - time alone will tell if I am right or wrong.
If there was no margin for error - and never any different views - investing would be an easy game indeed - it is these very issues which make confidence - ( or lack of) - the crucial factor.
It is easy for all of us to be right in hindsight - the tricky part is getting it right in advance.
To quote Warren Buffett - "Be Fearful When Others Are Greedy and Greedy When Others Are Fearful" .
Then again, I am certain that he is not always right also.
Regards
Steve

[cyprussteve] 31/7/2014 23:56

Hi Guys,
Please see below received tonight from DR, and I post this with his explicit permission to do so for your information.
Please see total transcript below.
Regards
Steve
"
Apologies for the bulk email, I am very busy with potential funders to step in where Anglo stepped out (and a good day it has been as well from this perspective).
Please find attached the latest research from finncap with a target price of 8.3p (many multiples of where we are today).
First thing to remember, we were at 2p when we announced Anglo and due to time and now a no go, we are at 1p. What has changed? We have completed the drilling, we have undertaken more regional work that shows more DSO ore and we will soon release the logistics study that shows low opex. In other words, we have increased the project value. We will replace Anglo before the next dry (starts in late Dec) with a better deal at project level, this will be better for shareholders in the long term. The only reason I can think of the share price crashing is that people are concerned we will come to market for a large raising to fund this ourselves, this is not the case. We have set values above our current market cap for individual project participation.
Many are asking about timing on Togo. We will report to market as soon as we can, however things have progressed well in the last couple of weeks. Investor interest in this project is high as we close in on the permit and we are working hard in parallel to secure funding for this as well.
I have obviously the most to lose with the current share price and can assure you we will be undertaking no massive dilutionary raises anywhere near this price. Unfortunately we are in a closed period for Directors at the moment otherwise I would be filling my boots at this price!
Cheers
Dave"

[strangebudgie] 31/7/2014 20:06

Thanks for sharing Andy. I still rate DR and I trust when he says this came out of the blue. AA are divesting assets left right and centre so perhaps this was just a last minute corporate decision. Nevertheless, although I will probably be buying back here, I will wait for either Gabon or Togo to partially de-risk (ie: Permit at Nayega or finance sorted for Gabon). I may pay more for the privilege but that better suits my risk profile. It doesn't help that most of my other holdings have performed badly this year. With the shining exception of OEX I am a fair few percent down. :-(

[andylee3] 31/7/2014 18:31

This is from DR and it confirms they were completely unaware this was going to fall through until the last minute. In fact they'd agreed on a drill company just two weeks ago. He also confirms they have no intention in dilution in order to raise funds. This is his statement word for word :-

Attached is an announcement just put out. We are obviously very unhappy with Anglo to have gone this far and decide at board level to not undertake the investment. Only 2 weeks ago we agreed a drill company with them to use on site so to say this is unexpected is an understatement. We believe it is to do with Anglos new strategy that is basically abandon exploration and focus on what they have to get better returns.

We will obviously take some short term pain as people digest this. I would like to remind people that the ore is still there and we honestly believe we will get a better deal now as we have completed drilling, mapping and almost there on a logistics study which is all value add since the term sheet was signed. Add this to the iron ridge investment (also one for genmin iron in gabon) and the fact that we have kept other interest parties fully informed our target is to have this refunded at project level by another to allow drilling for the next dry season. We will not be coming to market for a raise for this.

Every cloud has its silver lining, although I would have preferred not to have a cloud in the first place.

Feel free to pass this on.

Regards

Dave

[baht] 31/7/2014 18:07

Last week AA RNS reported profits down. Today RNS Number : 9343N

Anglo American PLC

31 July 2014

Anglo American plc (the "Company")

Registered office: 20 Carlton House Terrace, London, SW1Y 5AN

Registered number: 3564138

DIRECTOR'S / PDMR's INTERESTS

The Company announces that Mr Peter Whitcutt, a PDMR, has today sold 73,419 ordinary shares at a price of GBP16.205 per share.

The notification of these transactions is to satisfy the Company's obligations under the Financial Conduct Authority Disclosure and Transparency Rules 3.1.2 to 3.1.4.

Nicholas Jordan

Company Secretary

31 July 2014


A PDMR (Person Discharging Managerial Responsibilities) is defined in section 96B of the Financial Services and Markets Act 2000 as either a Director of an issuer, or a senior executive of an issuer who has regular access to inside information relating, directly or indirectly, to the issuer; and has power to make managerial decisions affecting the future development and business prospects of the issuer.

This guy I think sold about £120,000 earlier in the year now almost a further £1.2 Million!!!

From what's going on in the wider world looks to me as though AA have the problems not FRX. I would think any other small explorer/miner will think twice before considering a deal, wasting funds on Due Dil etc, with AA as a partner.

I wonder if FRX will seek compensation from AA for wasting FRX's time and money?

Only good thing I can see at present is that if you think the FRX proposition has merit now is the time to pick up some shares at a bargain discount price and average down your share price costs.

I just hope this isn't a crafty way of dropping FRX's share price to enable them/someone to buy a larger stake on the cheap. I don't think so but you never know.

Baht

[bad robbot] 31/7/2014 16:45

Another dung day

[paleje] 31/7/2014 16:37

Aside from the disappointment, has underlying value changed? Only to become clearer I'd say.

DR has 117m shares that's plenty of skin in the game, next serious director (non exec) holding is Roy Pitchford with 76m, neither of them will be willing to see their holdings diminished for long so expect some lifting news in the not too distant future imo. If these 2 weren't so committed I'd have been out and taken the loss.

The AA withdrawal, which I didn't see coming, should probably have been tied up better with conditions for this kind of eventuality but hindsight's never there at the time. Moritz's long experience should have guided them more astutely.

I'm underwater, was 1.55 now 1.25 and waiting for recovery.

[strangebudgie] 31/7/2014 15:36

I may buy my 75% back if either Gabon gets funded or Togo license gets sorted, but for now I decided that I didn't want to risk most of the capital that I had left here in a potential further drip down without positive news and a potential cash call on the cards. Like you Steve I also still like the bigger picture: China/India and the world economy in general looks to be bouncing back and I can see demand for IO prices recovering strongly in the medium term. AA clearly also saw potential, but management needs to show something concrete to me to prove that others also rate these assets and are willing to put in funding.

[novicetrade68] 31/7/2014 14:53

If you look yesterday, down nearly 25% and today nearly 10% I would nearly have thought FRX to be an oil exploration play who just reported a duster.

But the asset is still there and perhaps even in better shape than Dec 2013. If I recall correctly there were many expressions of interest from others to participate in the Gabon project (didn't DR mention 30 or so ?), so perhaps there are some other rabbits left in the head before their asset is becoming a liability.

I read elsewhere that during the last AGM ( didn't attend) DR said that they had cash till Q1 2015 to carry out further work streams including Malelane. If cash were to become an issue I would hope they'd defer some spending on Malelane whilst getting a deal done on Gabon and/or Togo as then at least they don't have to go cap in hand to the market again at the worst possible time.

Finally, I genuinely think that this cancelled term sheet with AA was to an extend in the price if you look at the drop from say beginning of June. But we PI's are always last to find out, but I have a suspicion that any insiders here already had a much sooner grasp that the deal wasn't going to happen...

Well done however to the people on here who highlighted on this thread weeks ago that there may not be a deal after all.

Although I didn't see yesterdays' news coming myself, it is a good reason to keep this thread as much unmoderated as possible :-)

[bad robbot] 31/7/2014 14:47

Cyprus Steve leave it, let it go, this is dung and now you know it, you were hopeful before but now it's dead. Best let it go mate.....let it die gently

[cyprussteve] 31/7/2014 14:32

I understand - and share - the frustration - of all the above posts.
As you know, I have bought previously at a far higher price - so it hurts.
However, the projects are still excellent, the track record of the Management is superb, and despite AA changing their mind - it is my belief that FRX will get funded elsewhere without going to market.
I have been buying today at this price - of course, I could be totally wrong - but, despite this setback and the affect it has clearly had on market confidence, the reasons I originally bought in remain unchanged, and that Manganese and DSO Iron Ore is still there.
Buying ANY share is about confidence - backed up by the progress the Company has made, and the top grade pedigree of their BOD.
It is clear from the postings above thatmany others do not agree with me - and that's fine - we are all entitled to our views, and make our own decisions regards buying or selling shares accordingly.
I remain confident - and see this as a buying opportunity - others don't - none of us will know who is right or wrong until we either get taken over - or not - as the case may be.
Regards to all,
Steve

[granykity] 31/7/2014 12:27

I sold out completely, took my loss while I could! Just hoped to warn others to the misgivings I could see here, after that placing and the way things were structured - it looked odd to say the least! Now the tide is totally against west Africa & (Iron ore) never mind a tiny company about to run out of cash! I'll be interested to see how it plays out, but wouldn't be holding breath to see them still here next year, personally - take what's left if your money whilst you can! IMO

[strangebudgie] 31/7/2014 11:22

I also have lost much faith in management. The YAGM deal seemed fishy at the time given cash was supposed to be on the way from AA but I was willing to give them the benefit of the doubt. After some soul searching I sold 75% yesterday at an average of 1.04. My buying average was 1.59. I have put the remaining 25% in my bottom drawer. If they hit 5p one day I make my money back. Better luck to all.

[clinton baptiste] 31/7/2014 11:10

From the interims 2 June 2014:

" Binding Term Sheet with Anglo American Plc ('Anglo American') and Kumba Iron Ore
(Pty) Limited ('Kumba'), signed in December 2013, to fund exploration including a
scoping study"