Oriel Resources Share Discussion Threads

[knackers] 03/11/2006 09:35

Anyone have an idea when trading will resume?

[kermit] 03/11/2006 07:50

Oriel Resources (ORL-TSX), Daily Chart, Semi-log Scale


GSW ORL.JPG



Editor's comments (November 1 2006, ORL-TSX last close $1.05): The share price has closed at its highest level of the last 18 months, closing at $1.05 after hitting a high of $1.08. This matches the high of $1.08 ($1.03 close) achieved on the volume spike of September 14, 2006, the day Bloomberg stated that Russia's wealthiest man wants to take a stake in Oriel (see below chronology of our comments, as marked on the chart above). We suspect that we are in the midst of a price trend that will continue on to new highs, in fits and starts, as the company progresses through development of its two projects, and becomes a cash cow that will rival Northern Orion and Wheaton River (now merged with Goldcorp). Long-time subscribers will recall that Endeavour Capital Group similarly sponsored those deals. We will continue to hold our shares through the inevitable corrections, to ensure that we are well represented when dividends are ultimately declared. You've been well briefed of what's going on (see below a chronology of my commentary).

Review of our recent comments:

Editor's comments (October 16 2006, ORL-TSX last close $0.85): Oriel is undergoing a three-way combination, transforming into a vertically integrated ferrochrome business with a strong financial footing and increased capacity to develop their world-class Shevchenko nickel project. Through this reverse takeover the new partners are investing $100-million (U.S.) in cash requiring shareholder approval within 23 days from posting of the admission document to Oriel shareholders.

Oriel will acquire an unlisted Dutch holding company constructing a ferrochrome smelter at Tikhvin near St. Petersburg, Russia. Oriel will acquire 100 per cent of the issued share capital of IPH in exchange for the issue of 248,971,014 ordinary shares. Oriel will also acquire an unlisted BVI company. On closing of the acquisitions, Croweley's only asset will be cash of $100-million (U.S.). Oriel will acquire 100 per cent of the issued share capital of Croweley in exchange for the issue of 102,880,584 ordinary shares. This acquisition implies a price of 51.81 pence per share, being a 38-per-cent premium to Oriel's closing price of 37.5p on 14 September 2006 when the ordinary shares were suspended on AIM.

As a result of these transactions existing Oriel shareholders will hold approximately 36.7 per cent of New Oriel, while the new shareholders will hold approximately 44.8 per cent and 18.5 per cent respectively. In effect, 63.3 per cent of the company has been exchanged for a ferrochrome smelter in an advanced stage of completion, and $100-million (U.S.) in cash, along with value-added management and sufficient resources to develop Shevchenko – a huge potential cash generator.

Editor's comments (September 14 2006, ORL-TSX last close $0.80): TodayBloomberg stating that Russia's wealthiest man wants to take a stake in Oriel. Abramovich lives in London, owns a soccor team there (Chelsea) and is likely the go-to man when it comes to Russia's resource wealth. We hear that Oriel is essentially his target for a reverse takeover (RTO) whereby he funds the company to fast-track it's project development, adds more potential properties to Oriel's already large holdings, and takes back shares to become Oriel's largest shareholder.

Editor's comments (July 16, 2006, ORL-TSX last close $0.68): On June 6th Oriel announced the outcome of their SRK Feasibility Study. The study's outcome is leading the company to "fast-track development of the Voskhod Project". Oriel purchased the Voskhod chrome mine in northwestern Kazakhstan in February of 2005 for $15 million. The SRK study estimates operation cash flow for the life of the mine to be $1.2 billion with average annual cash flow of $85 million. The company is sitting on over US$30 million in cash and has just over 200 million shares outstanding. With capital costs estimated at $131 million, this alone provides an exceptional return:

Pretax Posttax
NPV US$472 million US$320 million
IRR 50% 41%


The most notable highlight of the SRK study is the potential for significant production increases, which could make Oriel Resources one of the three top chrome suppliers in the world. And then there's their massive Schevchenko project ... (see report for more).

Editor's comments (June 5, 2006, ORL-TSX last close $0.61): With just over 200 million shares issued and an indicated NPV of US$472 million (pre-tax) and US$320 million (post tax), this is a significantly undervalued opportunity. Endeavour Financial is leading advanced negotiations with a number of leading international players on debt financing options. Endeavour is confident that the project economics is sufficiently robust to support over $100-million (U.S.) of debt which, in addition to over $30-million (U.S.) of Oriel's cash reserves, provides the security the project financing requires.

Editor's comments (January 27, 2006, ORL-TSX last close $0.53): One of our most senior and undervalued holdings, Oriel should be a cash cow within 18 months. I met with management while they were visiting North America and reviewed their cash flow projections and the logistics involved. In a perfect world they will be able to proceed with both their projects without further dilution. This is very realistic. Cash flow in their first full year of production, pre-tax, is estimated at $0.42/share ... obviously the share price at yesterday's $0.53 close is very cheap on that basis. We are slowly adding to positions. Obviously, RAB Capital (see disclosure of increase in holdings) thinks it's cheap too - they do their buying on the London AIM market where Oriel trades better volume.

Editor's comments (June 15, 2005, ORL-TSX last close $0.68): Our sources have confirmed that almost 20 million shares were sold out of an investment fund, the result of a new investment manager coming in after the old one was fired. There was also a significant amount of 1pence "founder" shares (owned by an initial founder, not part of current management) that came free-trading, requiring placement with new investors. This process has now been completed, as can be seen from the volume spikes on the AIM market chart. North American investors who assume that Oriel is not liquid enough to enter and exit on the TSX should find greater liquidity going forward, with market-makers now willing to enhance TSX liquidity as a new up trend commences. And the AIM market has now turned, trades great volume every day, and has technically bottomed. The fact of life for Oriel is that with over 200 million shares issued and mostly held by UK investors, the Canadian market place remains reactive to UK interests rather than proactive, at least until an institutional and retail following is developed in North America. However, with a breakout commencing on the AIM market after a "V" bottom, the timing looks good.

Your Source for High-Potential Early-Stage Growth Stocks Since 1995

[2ar] 02/11/2006 07:50

Decent (ish) volume as well on TSX now 49p.

[fatfin] 01/11/2006 21:12

thanks Flagon. TSX it is flying tonight. up 20% at one point. I am also in Sibir that went into suspension for about a year which was not too good. At least this will be a quick one.

Fatfin

[amurt] 01/11/2006 19:28

Thanks for that Flagon, very informative. All looking good on the whole I would say.

[unionhall] 01/11/2006 17:37

Thank you for that flagon.

Sounds and looks extremely professional.

Cash flow starting Q1 2007 from the smelter is a plus I had not thought of.

Chrome off-take LOI's for double the anticipated production is a nice starting point 18 months before production start.

Just have to sit back and see how the market takes it now.

[flagon] 01/11/2006 17:07

Maybe they liked this story as well. Shares should resume trading within 1 week say Oriel.

Scroll down to 12:40 on Wednesday.







Good luck,


Flagon

[unionhall] 01/11/2006 16:16

Up to 50p equivalent in Canada today.

they must have liked the story...

[grgkecer] 01/11/2006 09:27

Oriel Restructures To Secure Development Funding For Its Two Projects

[2ar] 26/10/2006 08:11

TSX = 42p

27/10 - 44p

[2ar] 24/10/2006 08:59

Date: October 24, 2006

New Mines Are Coming – But Slowly

By Rob Davies

Trying to keep track of new mines being planned or developed is a full time job for a commodity analyst. Even then it is hard to keep track of changes and what they mean compared to the initial plan. On top of that some news is just about funding or ownership and it is not immediately clear what it means for the supply of new material. As the results of the summer drilling and exploration season come in the news flow has increased. On top of that promoters, executives and bankers have had the past six weeks or so since the holidays ended to construct and negotiate deals. The consequences of that were particularly obvious last week when a number of companies made announcements relating to mine developments and some were featured on Minesite. Looking at this news flow it is possible to construct a top down view of the way the industry is responding to high commodity prices. The urgency of the need to respond was made more obvious by zinc and nickel making new highs of $3,994 and $34,490 a tonne during the week.

The most significant announcement last week concerned the Oyu Tolgoi copper deposit in Mongolia. This behemoth is generally acknowledged to be the largest undeveloped copper deposit in the world but, like the cuckoo in the nest, is too big for its owner, Ivanhoe, to manage. The deal brings in Rio Tinto to help finance, build and operate the mine. But there are some significant hurdles to be surmounted before any copper leaves the site and the time scale outlined in the deal runs for five years. That's a long time to wait.

A bit more rapid will be AIM Resources development of the Perkoa zinc deposit in Burkina Faso. Although this will now be developed more rapidly the first ore won't be available until March 2008. Even then annual production of 60,000 tonnes won't make a huge difference to an industry consuming 7.7 million tonnes a year. However, it only takes a quick look at the futures market to see why miners are so keen to bring production on so quickly. While the cash price of zinc is just under $4,000 a tonne the 27 month forward price is only $2,600 a tonne. That difference is equivalent to over $60 million of revenue, or roughly equal to AIM's current market capitalisation.

In a particularly complex deal announced last week Oriel Resources secured funding for its Voskhod chrome and Shevchenko nickel properties in Kazakhstan, but at the cost of ceding control. Even though the company now intends to fast track both projects the nickel one is still be many years from production. Unlike the chrome mine no work has started on it yet and it will need its own smelter, a large, complex and expensive piece of kit. The difference in spot and forward prices for nickel is even larger than for zinc. At $18,650 a tonne 27 month nickel is 46% lower than today's cash price implying an even greater loss of revenue.

All these mines are in countries that most of us struggle to find on a map. While bankers these days are more relaxed about funding operations in these places the basic difficulties of logistics in remote locations should not be underestimated. While Oriel's and AIM's sites are close to railway lines Oyu Tolgoi will almost certainly need its own line as well as power and other infrastructure. These recent news stories tell us that while the industry is doing its best to bring on production, physical constraints will be the limiting factor on the supply side for some time to come.

[cinoib] 23/10/2006 15:06

I take it oil has jumped in n.y. this aft, in order to account for the massive turnaround/ Down 18 when I left an hour ago now up7.Edit make that 10.

[majormike] 19/10/2006 16:17

Thanks Adam.

[adam] 19/10/2006 16:04

• Trading in Oriel's Ordinary Shares and Warrants on AIM is expected to
resume after posting an admission document to shareholders. This admission
document is currently being prepared and will be posted as soon as
reasonably practicable.

• The Acquisitions are subject to the approval of existing Oriel
shareholders at an extraordinary general meeting to be held as soon as
reasonably practicable, but no earlier than 23 days following the posting of the admission document.

[majormike] 19/10/2006 12:08

Thanks 2AR

[2ar] 19/10/2006 08:50

Trading will resume after the admission document is released, which could well be the same day we return (i.e. Admission document 7am, resume trading 8am).

[majormike] 19/10/2006 08:09

What notice do we get that the suspension will be lifted?

thanks

major

[grgkecer] 18/10/2006 09:53

Hidden value in chromite?

[2ar] 17/10/2006 11:10

So how much will Roman pay his mates then ?

[unionhall] 17/10/2006 10:07

Ownership

After completion of the transaction, IPH Polychrom Holding BV will receive 44.8% of the shares in 'New Oriel' and Croweley International Limited 18.5% - Oriel's current shareholders will retain 36.7%.

Alexander Nesis is the sole owner of Croweley International Limited. IPH is partly owned by Nesis' Polyprom Holdings B.V. and Mamut's A&NN Properties Limited, as well as Baran Group and the Rieger family. Nesis also beneficially owns 50% of the Tikhvin operations through his indirect shareholding in IPH.

After Oriel suspended shares on AIM last month, confirming talks over a "potential transaction," sources speculated that Chelsea's billionaire owner Roman Abramovich could be connected.

Abramovich acquired 41.3% of Evraz Group SA, Russia's biggest steelmaker on August 10, less than a year after selling oil company OAO Sibneft for $13.1 billion.

According to these sources, Nesis and Mamut had plans to sell part of the new entity to Abramovich after the deal went through.

An anonymous source previously told RI that Oriel Executive Chairman Sergey Kurzin is an acquaintance of Abramovich and the two have spoken in the past. Mamut is reportedly a close friend of Abramovich.

The company was not available for comment at time of publication.

[2ar] 17/10/2006 09:44

Closed at 45p on TSX last, CURRYPASTY (if your there ?) maybe you can put the TSX price in the header ??

[cinoib] 17/10/2006 09:20

Mike, don't get to carried away just yet, lets get back on London trading first and see how the market reacts. I'll be happy to see it above the 51p first.