Galahad Gold Share Discussion Threads

[buffin] 16/6/2007 11:33

Given that the French can match any offer that might deter some ... or encourage some to put in a very high offer ...

Hi Nil, nice to see you here too. Hope all is well.

Paladin trumped them for Australian company Summit Resources. So the market knows the French won't stump up silly money. (FWIW the Chinese didn't get into that one.)

tiltonboy -

The company made an announcement yesterday evening concerning the future, and are considering soft commodities.

That's what I meant. Sorry if I wasn't clear.

[lowersharpnose] 16/6/2007 11:08

...indicates that the market thinks a higher offer will be forthcoming. ...

Not necessarily.

Areva are offering the cash for UraMin's assets less their Niger JV, which is to be given to exisiting shareholders - either in shares in the new company or cash.



...Concurrently with the closing of the proposed offer, UraMin will declare a dividend payable in shares of the capital of Niger Uranium Limited held by UraMin (where permitted by law) or a cash equivalent of the value of such shares...

It was buried in the release, almost like small print. It should have been right at the top with the cash offer value.

What we are seeing now is the market trying to put a value on Niger plus any bidding war expectation.

Question is, what is the value of the Niger JV?

rgds
lowerSharpnose

[nil desperandum] 16/6/2007 10:56

Uramin closed at C$8.84=£4.19 up about 20p on the offer which adds about 0.5p onto GLA NAV ... and more importantly indicates that the market thinks a higher offer will be forthcoming.

Given that the French can match any offer that might deter some ... or encourage some to put in a very high offer ...

[altom] 16/6/2007 10:32

I would like to thank all the well informed posters from whom I am learning a lot. This is an excellent thread ; it sticks to the subject, does not descend into obscene personalities, and never mentions anything to do with football !!!
I am encouraged to learn that Nil Desperandum has bought 200k @ 16.5. I would also think that +20% or 20p by the end of the year is a possible and very nice target.
Keep up the flow of info. please.

[tiltonboy] 16/6/2007 09:49

Buffin,

The company made an announcement yesterday evening concerning the future, and are considering soft commodities.

tiltonboy

[nil desperandum] 16/6/2007 09:23

I joined the party a little late, yesterday picking up 200k @ 16.5p - I don't normally do mining plays, but this seems to be in an endgame with most of the assets in the bag.

I reckon min NAV to be 17p fully diluted (that allows for 5p per share for tax which is the biggest unknown on the downside I think)

So I hope that downside is pretty limited.
Upsides:
- final take out value of UMN ... I'm hoping that this could get tasty.
- Niger div value?
- extra from NDM?
- upside for QUA before selling in Nov?
- over-estimate of tax liability?

Have I missed anything?

I'm looking for 20% within 6 months ... or perhaps money back and an interesting investment in the new vehicle for free.

PS Nice to see you here Buffin.

[buffin] 15/6/2007 23:54

I've seen several suggestions that "soft commodities" might be the next big play, so I shouldn't have been surprised to see GLA considering them.

An interesting approach.

[sir josephs mate] 15/6/2007 20:45

5/8 = ?

no suprise there either then!!

[meadow50] 15/6/2007 20:40

sjm
umn is now worth nearly 63% of GLA's market value though...worth 10.3p to GLa at todays close.

[sir josephs mate] 15/6/2007 20:14

nf.

would you mind dropping me an email to [e-mail]? I would like to ask you something off thread!

[sir josephs mate] 15/6/2007 20:11

Why is it suprising?

The UMN share price rose by 8%

GLA rose by 5%

UNM is only 50% of GLAs value!


Its suprising it rose that much :)

[nfranks] 15/6/2007 20:00

Mid-Caps

Bid news also helped the shares of Uramin (UMN) 31p higher to 408p. The French state-owned nuclear reactor builder Areva said it had made a "friendly" approach, worth 775 cents per share for uranium miner. The group, whose operations are mostly focussed in Africa, said it intended to recommend the 2.5 billion dollar deal to shareholders. On the smaller company side of things, Galahad (GLA), which owns a significant declarable stake in Uramin, was surprisingly up by just 0.75p at 16.25p.

[nfranks] 15/6/2007 19:49

nickcduk - "They can also probably see no reason for the company to carry on now that they have no active investments left. Maybe they will push for a liquidation now."

what?

from todays RNS

5. Quadra Mining Ltd

Cumulative cash cost of investment is stated as market value of 2,978,558 shares of Quadra Mining Ltd as at 14 May 2007. Return on investment is stated at market value of 2,978,558 shares of Quadra Mining Ltd. Closing price of a share in Quadra Mining Ltd as at 14 June 2007 on the Toronto Stock Exchange was C$12.75.

That's an active investment isn't it or am I missing something????

[cagr] 15/6/2007 17:49

Very nice indeed:

AREVA's offer values Galahad's holding at GBP81.5m,

[swalker] 15/6/2007 17:45

Galahad Gold Plc
15 June 2007

Galahad Gold plc
(Galahad)

Cash offer for UraMin Inc


Galahad announces that AREVA and UraMin Inc (UraMin) today entered into an agreement in respect of a friendly cash offer for 100% of the share capital of UraMin. Galahad is the largest shareholder in UraMin with a holding of 7.3% (6.4% fully diluted). UraMin shareholders are to be offered US$7.75 per share, a premium of 21% over UraMin's 20-day weighted average trading price ending on June 8, 2007. Concurrently with the closing of the proposed offer UraMin expects to declare a dividend payable in shares of the capital of Niger Uranium Limited held by UraMin (where permitted by law) or a cash equivalent of the value of such shares. AREVA's offer will be made through its wholly-owned subsidiary CFMM Developpement. The offer is conditional upon tendering of a minimum of 75% of the outstanding UraMin shares on a fully diluted basis, including the 5.5% shares held by AREVA.

Ian Watson, the Chairman of Galahad, commented: "UraMin has made incredible progress during the last two years. Galahad invested 3.7m in UraMin in June
2005 shortly after UraMin's inception. AREVA's offer values Galahad's holding at GBP81.5m, giving an internal rate of return of 172% per annum on its investment,
22 times the money Galahad invested only two years ago."

UraMin is an international mining company founded in February 2005 to acquire and develop uranium properties throughout the world. Its shares are traded on the AIM market of the London Stock Exchange and the Toronto Stock Exchange under the symbol "UMN".

Galahad acquired 20,266,666 shares in UraMin in June 2005 for US$5m (GBP3.7m).
Galahad is also a beneficial owner of an option to acquire 500,000 UraMin shares exercisable at an average price of US$0.52 per share. In the event of the AREVA's offer for UraMin becoming unconditional, Galahad would receive a cash consideration of US$160.7m (GBP81.5m) and would realise a pre-tax profit of
US$155.7 (GBP77.8m). Tax will be payable on the profits.

Acceptance of the offer by Galahad will be subject to shareholder approval. Upon the receipt of AREVA's offer, a circular and notice convening an EGM will be dispatched to shareholders.

The Board of Galahad will consider the use of proceeds in due course. The directors are currently reviewing the optimum way of returning cash to shareholders and anticipate completing this review and announcing a significant capital return before the end of 2007. The directors are also researching new investment opportunities including diversification into soft commodities.

The macro-economic indicators for the market in soft commodities, including grain and corn, are similar to those of gold and copper when Galahad first invested in mining in 2003. Grain stocks are at an historic low, while the world population is continuing to grow. The demand for better quality food is being fuelled by strong economic growth in many countries, particularly China and India. There is also additional pressure on supply as food resources are being diverted towards ethanol production. Investing in farmland could be an attractive way to take advantage of the expected increase in the price of soft commodities. Farmland that can be developed efficiently is a scarce resource and prices are expected to continue to rise over a period of several years. Galahad is carrying out research and due diligence to evaluate the investment case for soft commodities and the optimum way of participating. When and if suitable investment opportunities are found, the new investment strategy will be presented to the shareholders in a General Meeting and Galahad will take such additional actions as required by the relevant AIM Rules.


For further information please contact:

GALAHAD GOLD PLC [phone]
Ian Watson

DRESDNER KLEINWORT [phone]
Chris Treneman

PARKGREEN COMMUNICATIONS [phone]
Simon Robinson


NOTES TO THE EDITORS:

Galahad acquired shares in UraMin Inc two years ago in June 2005 for GBP3.7m, AREVA's offer values Galahad' holding at GBP81.5m before accounting for the value Niger Uranium Limited shares to be distributed as dividend in specie.

Galahad is UraMin's largest shareholder. At the time of the acquisition in June
2005 Galahad's holding was equivalent to a 26% shareholding in the company.
Since inception in February 2005, UraMin raised approximately US$396m. As a result Galahad's holding was diluted down to 7.3% (6.4% fully diluted).

Galahad Group's investment performance beginning with the acquisitions made by Shambhala Gold Limited (SGL) in June 2003 and continuing with investments by Galahad following the reverse takeover of SGL in December 2003, averages an internal rate of return of 70.9% per annum.

Galahad Group Investment Return as at 15 June 2007

Company Cumulative Cash Return on Annualised Net Cash
Investment investment Return Return
To Date (GBP million) % %
(GBP million)

1 Northern Dynasty Minerals Ltd 16.9 87.1 64.5% 416.6%
2 Skaergaard Minerals Corporation 6.1 - n/a (100.0%)
3 International Molybdenum plc 2.0 17.1 128.4% 764.2%
4 UraMin Inc 3.7 81.5 172.2% 2083.2%
5 Quadra Mining Ltd 17.1 18.0 n/a 5.6%
6 Overheads 5.9
Galahad Overall Return 51.7 203.7 70.9% 294.6%


Notes to Galahad Group Investment Return:


General:

Annual return is calculated as Internal Rate of Return depending on the timing of the respective cash outflows of which 1 and 2 were originated by Shambhala Gold Ltd and which exclude any fair value adjustments resulting from the reverse take-over of Shambhala Gold Ltd by Galahad Capital plc in December 2003. All amounts are stated gross of income and capital gains tax.

Group investment return is calculated by Galahad. BDO Stoy Hayward LLP have reviewed the compilation of financial information included in the calculation of annualised Internal Rate of Return as at 23 March 2007 and confirmed that the methodology used in the calculation is appropriate and in accordance with standard definitions.


1. Northern Dynasty Minerals

Cumulative cash cost of investment is stated as total cash invested by individual subsidiaries within the Galahad Group and excludes any fair value adjustment resulting from the reverse takeover of Shambhala Gold Limited by Galahad Capital plc in December 2003. Return on investments is shown as total of cash received on disposal net of transaction costs.


2. Skaergaard Minerals Corporation

Cumulative cash cost of investment is stated as the total of cash invested by individual companies within the Galahad Group and excludes any fair value adjustment resulting from the reverse takeover of Shambhala Gold Limited by Galahad Capital plc in December 2003.


3. International Molybdenum plc

Cumulative cash cost of investment is stated as cash invested net of proceeds of the sale by Galahad Gold plc of the Malmbjerg and Flammefjeld licences in December 2004 to International Molybdenum plc. Return on investment is stated at market value of 2,978,558 shares of Quadra Mining Ltd as at 14 May 2007.


4. UraMin Inc

Return on investment is based on the value of AREVA's offer for UraMin Inc excluding proposed dividend.


5. Quadra Mining Ltd

Cumulative cash cost of investment is stated as market value of 2,978,558 shares of Quadra Mining Ltd as at 14 May 2007. Return on investment is stated at market value of 2,978,558 shares of Quadra Mining Ltd. Closing price of a share in Quadra Mining Ltd as at 14 June 2007 on the Toronto Stock Exchange was C$12.75.


6. Overheads

Overheads are stated on a cash basis exclusive of interest paid and received, costs of equity and debt financing, realised and unrealised exchange gains and losses, and income tax paid.


This information is provided by RNS
The company news service from the London Stock Exchange
END

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(MORE

[tonytravel] 15/6/2007 16:38

What is the likely impact for shareholders if GLA liquidate ?

[alanji] 15/6/2007 16:32

Tilton,

Figures based on the current issued share capital of 773.9m. There were 128.4m dilutitive options and warrants at 31/12/05 with 58.2m priced at 4p and less and the balance at 10.25p to 14.5p. By my totting up 38.7m have been exercised since but the prices are not stated.
As stated at the bottom of my last post, I would guestimate dilution at 0.5p

Alan

[sir josephs mate] 15/6/2007 16:08

who have no active investments?

[nickcduk] 15/6/2007 16:00

The big job for GLA is to now think of a cunning plan to reduce their tax liabilities. I would imagine a few hedge fund managers are jumping on board today to play out the arb opportunities with UMN. They can also probably see no reason for the company to carry on now that they have no active investments left. Maybe they will push for a liquidation now.

[pomp circumstance] 15/6/2007 15:53

i thought NAV was over 20p!

[tiltonboy] 15/6/2007 15:37

Alan,

Are those figures fully diluted for the outstanding options?

tiltonboy

[alanji] 15/6/2007 15:34

Figures at 392p (current value of UMN offer)

UMN 10.3
QUA 2.4
Cash 10.4

Total 23.1

Tax:
NDM -2.7
UMN -2.9
QUA -0.7

Total -6.3

Net 16.8

Plus(?):
Shambahla tax loss 2.2
A'ddl net NDM 0.8
Niger Uranium ??
Dilution from warrants & options -0.5

[nickcduk] 15/6/2007 15:04

Tiltonboy

Thanks for reply.