Kalahari Minerals Share Discussion Threads

[beefeater25] 21/10/2011 13:47

...in a totally fictional world it could be that someone knows that a bid is days away and they would like to send the share price down to 225p so they can say "a bid of 270p which is 20% higher than the price at close of business on xxxx"...

Things like manipulation dont happen though in the stock market so its probably just someone who just needs the cash...

[wanttowin] 21/10/2011 13:25

250,000 sell at 230, someone know something?

[beefeater25] 20/10/2011 22:32

Would Rio really trust the Chinese? Im still convinced Rio would prefer to own this themselves with customers that would be queuing up and the infrastructure already in place. I still dont think the directors here would sell themselves short if they thought 270p would be the final and only offer...

[wanttowin] 20/10/2011 21:21

Totally agree 270p,is a really poor price and certainly not value for what we have. After all this waiting I hope a chummy pact is not on the cards, please can we have aggressive bidding war !!

[eddie catflap] 20/10/2011 16:11

Similar article..



As has been stated on this bb before, 270p is a poor price to sell out at.

[gero67] 20/10/2011 15:40

Extract still an option for Rio Tinto

The Australian Financial Review
PRINT EDITION: 21 Oct 2011
Street Talk
Edited by Sarah Thompson, Christine Lacy and Stephen Shore

Rio Tinto's Doug Ritchie has certainly been busy since becoming group executive in charge of energy but few foresaw yesterday's $555 million bid for Canadian uranium explorer Hathor Exploration.

Eyes had been firmly fixed on Namibia, where Rio was expected to somehow get into the mix in China Guangdong Nuclear Power's $1.1 billion tilt at Extract Resources shareholder, Kalahari Minerals.

But those believing that the Canadian play might rule out a move by Rio to participate in Extract's Husab uranium project, which lies neatly adjacent to Rio's under-utilised Rossing mine, should think again.

With China Guangdong having been locked in talks with Kalahari over the past few weeks and no sign yet of a deal, there's still a lot to play for.

Rio's bid for Hathor implies a value of about $9.90 per pound of uranium resources, topping Cameco's $8.70 per pound offer.

But it is more than double the $4.70 per pound valuation implied in China Guangdong Nuclear Power Corporation's offer for Kalahari, assuming the Chinese come back at the earlier proposed price of 270 pence per share.

Russia's ARMZ paid $9.80 per pound for Mantra back in March, even after Fukushima, so the Chinese mooted offer leaves some room for manoeuvre.

Not that a counter-bid is what Rio necessarily has in mind, some seeing a much more chummy outcome involving Rio, China Guangdong and Extract all working alongside at Husab.

It all ties up with a renewed push into energy, not just by Rio but, of course, by BHP Billiton, which has spent almost $US20 billion on US shale gas acquisitions this year, while a go-ahead for the circa $30 billion expansion of Olympic Dam - the world's biggest uranium resource - is firmly on the table for mid-2012.

[beefeater25] 19/10/2011 13:31

Could this be a drive down before the bid? 225p anybody?

[nohopeatall] 19/10/2011 09:20

KAH has never really been followed by PI's hence no rampers de-rampers. Makes quite a pleasant change!

[wanttowin] 18/10/2011 11:29

Or fallen asleep with boredom !

[zangdook] 18/10/2011 11:18

I think we're a bit numb, sparty.

[sparty1] 18/10/2011 10:00

I`m amazed how little board activity theres is re KAH and the takeover. The same on iii and lse ... apathy reigns.. :(

[beefeater25] 14/10/2011 11:04

I wonder if we will hear anything next week?

[sparty1] 14/10/2011 10:44

rossing up the road is making a loss at the minute.. sth rossing easier to mine I think.I`m still waiting to see what becomes of NRRP ? Great prospects.

[kinbasket] 13/10/2011 10:19

It might leave them exposed but they are still in the box seat. They already have Rossing up the road. Development costs for Rio would be considerably less than for CGNPC if they went it alone. I'm also not sure that CGNPC want to go into the Mining business in a big way. It's easier for them to have an offtake agreement and let someone else do the work. Same as Itochu although they are the ones without any real bargaining power.

[nielsc] 13/10/2011 10:11

kinbasket,

Would that mean Rio would have to have a JV agreement in place before CGNPC took control of EXT?
Otherwise wouldn't it leave Rio a bit exposed.

It sounds like the most probable course of events.

Cheers,
Niels

[kinbasket] 13/10/2011 09:52

Rio can come in after the sale with a JV agreement on the development. Buying Ext is only half the battle for CGNPC. Once they have it they need to develop it. They can go 50/50 with Rio and Rio pay all the development costs.

Win win for both parties. In return Rio agree not to get involved in a bidding war.

[nielsc] 13/10/2011 09:40

zangdook,

Thanks for that. One player that won't figure then.

So if/when CGNPC make an offer on extract they will have to make an offer on EXT.
How will Rio negotiate that scenario?

Cheers,
Niels

[zangdook] 13/10/2011 01:55

nielsc
With Itochu and APAC that is a 27.2% blocking vote.

APAC want the cash - see posts 7006-8. Of course they might still try to push up the offer.

[nielsc] 12/10/2011 22:42

This saying pops sums up how I feel regarding the current situation

"If, after the first twenty minutes, you don't know who the sucker at the table is, it's you"
;-)

Cheers,
Niels

[nielsc] 12/10/2011 22:39

kinbasket,

A very good point regarding the size of the Extract. Does limit the pool of potential bidders.

I would be surprised if Rio is not involved in some way as their presence in the very close vicinity provides infrastructure and know how regarding mining Extracts uranium.

I for one will still be holding after a 270p bid is announced. Nothing to lose really for being patient for another month or two.

Cheers,
Niels

[kinbasket] 12/10/2011 17:19

Since the initial bid, Extract have added 37% to the resource for Husab. Now 500mlb. Also, Cameco is engaged in a hostile bid for Hathor at a price of about $9lb. An equivalent price for Extract is nearer to $18 that the $9.50 quoted above. Or somewhere around 550p for KAH.

Interestingly Hathor is trading at $4 with the bid from Cameco at $3.75 as investors hope for a white knight. However, there looks to be no competing bidder and they may get it at that price.

I fear the same situation here. There are good reasons why Hathor is a better target than Extract, not least the geo-political so we should expect a discount to the price indicated above. I also think there are few companies with the money to get involved in a bidding war. It's China and who else ???. Who has more than $3bn laying around to buy Extract and the near $2bn required to build it out ? I think Extracts shear size is a problem. It's too big for most buyers. For that reason I think the parties involved will have got together and worked out a deal between them. Rio, Itochu and CGNPC (and others probably) have had the summer to "talk" and we're likely to get taken out at a relatively low valuation.

I still expect it to be at least 270p ($9.50 for EXT). Not enough, but we're unlikely to find a better bidder in this situation.

[nielsc] 12/10/2011 16:55

"Japanese trading house Itochu also owns stakes in both Extract and Kalahari and is expected to want a share of output from the mine."

Now CGNPC and Rio (12.5% of KAH) may have a plan together, but I am hoping Itochu (15% of KAH) might shake things up a bit and you have APAC (12.2%) as well. With Itochu and APAC that is a 27.2% blocking vote. If Rio doesn't want to play ball then that is a near 40% blocking vote.

If CGNPC get control of Kalahari then they have a huge 42% vote to accept their own offer for EXT. Rio has a 14.7% stake in EXT.

Found this article


I think this summarises the current position quite well

"Take-over premium vanished due to concentration in shareholdings?

With the recent share purchases, more than 75% of Extract's shares are now held (in-)directly by three strategic investors (Kalahari 42%+, Rio Tinto direct 15 per cent (indirect approx 20%) and Itochu direct 10 per cent (indirect approx 16%).

With this highly concentrated equity ownership of Extract Resources, the likelyhood for a takeover of Extract with a substantial market premium appears to be greatly diminished. "

It's not over until it is over though.

Cheers,
Niels

[extrader] 12/10/2011 16:40

Hi BeefEater25,

....."why would the board suggest 270p is a good offer?".....

Because it will be, once it's been made....there being no other. The BoD can always hope that any offer made flushes out another, but if it doesn't, they're faced with the prospect of developing the mine themselves.

This would offer a much higher return, but (a) several years down the road (b) lots of execution risk (c) not a favourable fund-raising environment at present/for the foreseeable, even/especially project finance in a market as opaque as uranium.

On the flip-side, with so many beaten down resource stocks, the BoD might fancy their chances (post sale) of picking up other assets on the cheap that might get to the overall 350-400p that people have been talking about.

Meanwhile, salaries and expenses get paid.

Nice work, if you can get it !

ATB

[krakow] 12/10/2011 16:35

Brown envelopes I suspect.

Edit. A good offer would be 500p-600p. A poor offer would be anything below 350p.

[beefeater25] 12/10/2011 16:14

In which case why would the board suggest 270p is a good offer?