Origo Partners Share Discussion Threads

[shroder] 24/6/2010 15:39

Lot's to digest from yesterdays announcements but at first glance the results look very solid, Gobi valuation upgrade caught my eye.

"Three of our portfolio companies have had significant movements in their fair
values during the year. Firstly, after careful consideration, the Directors have
decided to write up the value of our newly acquired interest in Gobi to US$2 per
share (acquisition cost of US$1.1 per share), reflecting third party valuations
of this particular company and a growing demand for similar assets."

[shroder] 18/6/2010 12:16

Worth reading for an overview of the area (long download)



Hunnu share price

[shroder] 18/6/2010 12:06

Hunnu Coal to further expand South Gobi Coal Province

Wednesday, June 02, 2010

Hunnu Coal (ASX: HUN) has acquired a 60% interest in the Tsohio Coal Project, which is located approximately 40km south of the company's Khuree-2 coal project in the Umnugobi Province of Mongolia.

The company is currently undertaking a mapping and geophysics exploration programme at the project which is located between the Giant Tavan Tolgoi Coking Coal Field and South Gobi Energy Resources Coal Field, 60 km north of Mongolian-Chinese border.

The Tsohio Coal project is highly prospective for both coking and thermal coals and Hunnu was granted an Exploration License with an area of 38,600Ha.
Proactiveinvestors recommends

The project has had limited past exploration. Hunni said it has discovered an outcropping coal seam that is approximately 3km in strike length. This coal seam has also been intersected in a single trench with a thickness of approximately 5 metres.

The Tsohio Coal Project has an exploration target of 50Mt to 75Mt and the company is currently planning an aggressive exploration programme and drilling programme commencing in July 2010.

At the Tenuun-2 Coal Project, located eighty kilometres north of the Tsohio Coal Project the company is also conducting a mapping and geophysics programme.

A single vertical drill hole completed at Tenuun-2 by the company intersected three coal seams with combined true thickness of 12m.

Hunnu said the average results of the core analysis showed Ash (dry basis) = 15.8%, Volatile matter = 27.81%, Sulfur = 0.49%, Q(dry basis) = 5,445 kCal/kg, and Q(dry, ash free) = 7,071 kCal/kg.

George Tumur, managing director, said "the company is very encouraged by these results and further drilling is planned at Tenuun-2 in June 2010."

An independent geologist has commenced the process of calculating a JORC compliant resource statement for historical work completed at the Tenuun 2 Coal Project with results available in the coming weeks.

The company said mapping in the north west of the Tenuun-2 license has also identified extensive coal outcrop that has never been drill tested. Further work will be completed on this zone prior to drill testing this year.

Hunnu will be undertaking detailed exploration on the Tsohio, Khuree-2 and Tenuun-2 Coal Projects in the coming months as part of its coking and thermal coal exploration strategy in the South Gobi Province.

Hunnu Coal is aiming to become a major force in the exploration and development of coking and thermal coal deposits in the world class South Gobi coal province.

The company is currently assessing further acquisition opportunities in the South Gobi and would hope to be able to update shareholders on these potential acquisitions over the next month.

[mattjos] 18/6/2010 11:56

I see LIB are collecting and moved a ways off on the Offer

[mattjos] 18/6/2010 10:09

see how we go now

[shroder] 17/6/2010 09:26

Morning, it would be nice if it turned blue on that volume,

[mattjos] 17/6/2010 09:15

interesting trades just now

[shroder] 15/6/2010 09:23

Rimbo, this may also be of interest

Origo Partners have a 16% stake at present.

[rimbo] 15/6/2010 08:00

Im in as well - after reading FT article. Current shareholder in Petromatad based in Mongolia - hence why this caught my eye - ditto liked the coal potential.

[mattjos] 14/6/2010 14:55

thanks for that Shroder. i'm still digging but it was this that i trimmed some CMS for last week actually. Couldn't believe to see the FT article at the weekend so i imagine there will be a lot more eyes on this now.

When i was last in Shanghai i was surprised at just how many water industry engineers there were from UK & USA seemingly permanently ensconced in the hotel i was in ... China seems to be bringing in resources from all over to get a grip with it's predicted water shortages & quality problems. India's issues in this area are pretty well known too.
I've been looking around since for an investment with exposure to this and was immediately interested here when i saw Halosource & Aqualyng. The coal asset seems to have great potential.
They have assembled a tremendous set of small businesses here, each with significant growth potential, imo. that chart says it all too :-)

[mattjos] 14/6/2010 09:58

just when i thought i'd got one all to myself the bloody FT covers it and now everyone will be on it.
Yes, I'm following it Shroder .. looks nicely set at the moment. It was the water desalination that first caught my eye and caused me to check it. The portfolio looks v interesting

[shroder] 14/6/2010 09:25

Volume slowly picking up, anyone else following this?

[shroder] 13/6/2010 16:10

From the FT weekend money supplement,


Chinese small caps still come with big risks

By David Stevenson

If you read last week's column about my trip to China, you might think that I'm enormously bearish about Chinese stocks. And, to be fair, I'm not entirely convinced. In my view, a small single-digit allocation to Chinese equities will probably suffice – and you need to be careful how exactly you structure that investment. I suspect you need exposure to large caps through a cheap tracker fund, plus stockpicking funds operating in the consumer, clean tech and services sectors.

But I have now found a London-listed fund that invests in smaller, even earlier stage companies plus private equity deals in China and the rest of Asia.

It's called Origo Partners and has just announced a fundraising through the placing of new ordinary shares that will aim to raise $30m (£20.7m) to put into "well advanced investment opportunities".

It's managed by Chris Rynning – a veteran China hand – and its approach is fairly unusual: private equity deals focused on small, private clean energy and resources companies that might move to an initial public offering (IPO), with some heavy bets on the frontier market of Mongolia. It sounds very risky but with the shares trading at a hefty discount to net asset value (NAV), a cash pile equivalent to a quarter of that NAV, and the likelihood of two big IPOs in the next 12 to 18 months, I think there is a decent margin of safety.

Most importantly, I like its boss's cautious approach. "I maintain a healthy scepticism regarding Chinese small caps and their founders," says Rynning. "Unless you have a team of loyal accountants and lawyers on the ground performing due diligence and constantly monitoring the companies, small cap investing in China is an extreme sport that I would not recommend to the inexperienced. If you can master it, however, opportunities abound."

This is exactly the attitude I would expect from sensible foreign- backed equity managers based in China. Corporate governance is still dreadful and one leading analyst I talked to said it was getting worse as more money flows in. Another fund manager told me that his desk drawer contains undated letters of resignation signed by the CEO and CFO of a Chinese company he invests in – in case it all goes pear-shaped and he has to grab control of his investment!

Even so, there's still lots of money to be made in China, mainly because the local banks won't lend properly to private small cap businesses in China – a hideous inefficiency that must be fixed in the long term. Also, the Chinese equity market is still growing at an extra-ordinary rate in volume terms and, on some measures, isn't hideously expensive. According to aggregate data from French bank Société Générale, the Chinese equity market trades at 11.9 times 2010 estimates for earnings, falling to 10.1 for 2011, with earnings per share growth of 29 per cent in 2010 and 17.9 per cent in 2011.

I have a strong sense that most growth will come through the small cap sector – and Origo's focus on clean tech companies, plus its growing stable of yuan-denominated venture capital funds, should be able to capture much of that upside.

Of course, all the talk of opportunity and geo-political potential must not blind UK investors to the risks of investing in small caps shares in some of the riskiest markets on earth. But I do find some re-assurance in Origo's near 40 per cent discount to NAV. A report in April by analysts at Liberum put the NAV at around 37p, with $24m or 7.5p in cash on the balance sheet, versus a current share price of 27p. Liberum, perhaps optimistically, reckons that Origo's stake in one company – Gobi – could even be worth 27p on its own if it lists this year or next.

Add in a likely IPO from an Australian farmland investment – RM Williams Agricultural Holdings – plus the possibility of more renminbi-denominated local equity funds in the pipeline (managed by Origo Partners for a fee), and I think there's some safety in the numbers.

[e-mail]

[moormoney] 11/6/2010 20:55

They are certainly busy and the share price seems to have been held back by this fund raising--all positive though and ready for lift off!

[shroder] 11/6/2010 15:23

I did say say didn't hang about;

Further to the earlier announcement by Origo today, the Company announces that
it has raised approximately US$30 million, before commissions and expenses, by
way of the placing (the "Placing") of 82,200,000 new ordinary shares of
GBP0.0001 each in the capital of the Company (the "Shares").

The Shares were placed with investors at a price of 25 pence per Share. Liberum Capital Limited acted as broker to the Placing.

[shroder] 11/6/2010 07:13

These guys don't let the grass grow under their feet, £25m of the £30 already placed.

_____________________________________________________________________

Use of Proceeds

The net proceeds of the Placing are intended to be used, in conjunction with the
Company's existing cash resources, to fund investment opportunities amounting to
approximately US$50 million, which are anticipated to be comprised as follows:

- seed investment of approximately US$10 million in the Origo China Sustainable
Development Fund, the launch of which was announced on 23 April 2010;
- Mongolian mineral resource investment opportunities amounting to
approximately US$ 20 million; and
- investment opportunities in the Chinese clean-tech and agriculture sectors
amounting to approximately US$20 million.

Origo has already identified and progressed to an advanced stage a number of new
investment opportunities. In addition to the intended investment in the Origo
China Sustainable Development Fund, the Company has short listed 6 investment
opportunities, the intended investment allocation to which totals US$40 million,
each of which are either subject to conditional purchase agreements or
term-sheets.

[shroder] 10/6/2010 07:10

Knocked analysts for six,

China Exports Jump 48.5% as Europe Crisis Yet to Bite (Update2)

June 10 (Bloomberg) -- China's exports jumped 48.5 percent in May from a year earlier, the biggest gain in more than six years, indicating that Europe's sovereign-debt crisis has yet to pose a restraint on the world's fastest-growing major economy.

The increase, announced on the customs bureau's website today, surpassed all 32 estimates in a Bloomberg News survey of economists. Imports rose 48.3 percent, leaving a trade surplus of $19.53 billion.

[shroder] 09/6/2010 20:46

It's very interesting some of the stats coming out of China, incredible when you think about it.

VW to Add Chinese Plant, Double Capacity on Demand (Update1)

By Chad Thomas

June 9 (Bloomberg) -- Volkswagen AG, Europe's largest carmaker, will spend 520 million euros ($622 million) to add a 10th plant in China as the country's car demand booms.

The new factory in Foshan, Guangdong province, will assemble 300,000 vehicles annually and open in 2013, Wolfsburg, Germany-based VW said in a statement today.

The plant is part of VW's plan to double production capacity in China to 3 million vehicles within four years as the carmaker invests 6 billion euros in the country. Automakers are expanding in China, which surpassed the U.S. as the largest auto market last year, as demand soars.

[shroder] 06/6/2010 14:45

India's Hunger for Coal Sending it on a Worldwide Search

Written by Michael Economides

Thursday, 06 May 2010 16:12

India is hungry for coal and domestically there is neither the quantity nor the quality to feed the country's needs. The situation is exacerbated because coal consumption has soared in the construction (steel, cement) and power generation sectors. Given ongoing high demand, the problem is expected to become even more pressing.

Following China's example, India is seeking new and distant coal locations in the US, Colombia and Russia to add to supplies from Indonesia, Australia and South Africa, the usual sources of the recent past. It is expected that American and Colombian coal will be shipped to India before the end of the year. China, paving the way, has imported several million tons of coal from Colombia this year. The Chinese generally blaze the coal import trail for India to follow. This is a routine that is already happening in South Africa. India imported 1.4 million metric tons (Mt) from South Africa in February, double the January figure of over 720,000 Mt.

India and China, the two fastest growing large coal-consuming countries, are looking for high-energy content coal at a low average cost that would justify the long-distance shipment. "It's good to know that India is a market into which we can sell our coal, even if it's not our first choice," a Colombian supplier said.

Industry sources say that over the last few months many global coal producers and traders have been assessing the prospects of the Indian market. These include Colombia's Cerrejon, conglomerates Vale, Xstrata, Rio Tinto, BHP Billiton, Anglo Coal, and Mechel from Russia. In addition Europe is close to shipping surplus coal for the first time from Netherlands to India. In the export hubs of Amsterdam, Rotterdam and Antwerp, coal stockpiles are reportedly over 7 million metric tons (Mt) out of a total capacity of around 9 million Mt.

The search for more coal is due to India's need for more electricity. The Eleventh Plan of India (ending March 2012) calls for the addition of more than 50 GW of new coal-fired generating capacity.

Coal accounts for over half of India's total energy consumption. About 70 percent of India's own coal production is already utilized for power generation while three quarters of India's electricity is generated from over 80 coal-fired thermal plants. India, the third biggest coal producer in the world, had reserves of 56,498 million Mt, or nearly 7 percent of the world total.

Yet, India's federal coal minister Sriprakash Jaiswal recently said coal imports are likely to rise 21 percent over the next year. The imports are needed because domestic output is not keeping pace with the demands of a fast-growing Indian economy. Jaiswal added that coal imports in 2010/11 are estimated to top 85 million Mt up from 70 million Mt in the current fiscal year. "Though local production has increased by about 8 percent, yet energy requirements have risen by 15 percent," Jaiswal said. The import figures represent almost 15 percent of India's coal consumption of over 600 million Mt.


________________________________________________________________________________

From the recent Liberum note

Gobi Coal & Energy (20.79% of 31/12/09 eNAV)

In November 2009, Origo paid $14.7m for a 20.8% stake in Gobi Coal and Energy,
or $1.10/share. Gobi has significant coal resources in Mongolia and is positioned to supply fast growing demand from clients in both western and north eastern China.

Origo's 20.8% stake gives it the largest single equity interest in Gobi and Origo has taken a seat on the board. The founding shareholder and chairman of Gobi, Mo
Munshi, is experienced in Mongolian mining having previously worked as executive
vice president for business and corporate development at Ivanhoe Mines.

Sorry, this was the best I could find regarding coal prices -

[shroder] 06/6/2010 14:29

China Joins US at Top of Clean Energy Investment Table

Written by Charlotte Dudley

Sunday, 06 June 2010 12:11

Massive investment in clean energy projects has propelled China to the number one spot in a report ranking the world's most attractive locations for renewable energy investment.

Ernst & Young's Renewable Energy Country Attractiveness Indices ranked China and the US in equal first position as the most attractive countries for renewables investment – with China climbing from second place.

The US retained its top spot despite jitters surrounding its proposed climate and clean energy bill.

China's catch up was driven by the $34.6 billion it spent on clean energy projects last year and its increasing commitment to wind energy. The report said Chinese investment in clean energy projects in 2009 was almost double that in the US.

Ernst & Young environment and energy infrastructure advisory leader, Ben Warren, said: "China's consistently strong performance underlines its determination to robustly align energy and industrial policy, as it seeks to build a dominant position in the global market for technology manufacture and supply."

In 2009, China increased its environmental protection spending by 20% and is poised to release a draft 10-year clean energy plan. The report said such developments signal its commitment to a low-carbon economy.

Corporate developments such as the $1.5 billion five year investment in Chinese renewables by Hong Kong-listed China Resources Power Holdings also served to boost China's rating.

[shroder] 03/6/2010 12:04

Good news for Gobi coal IPO;

Trade surplus due to strong coal, iron ore prices - Crean

* From: AAP
* June 03, 2010 3:51PM


AUSTRALIA'S first trade surplus in 13 months reflects the strong prices being paid for coal and iron ore, Trade Minister Simon Crean says.

The trade balance of goods and services was a $134 million surplus in April compared with a revised $2.04 billion trade deficit in March, Australian Bureau of Statistics data showed.

Exports jumped by 11 per cent in April.

"It reflects the very strong effect from resource exports and in turn that reflects the very high prices that are being paid for those," Mr Crean said.

The value of iron ore exports increased by 32 per cent in the month, even though the volume of ore exported increased by only 2 per cent.

"These figures demonstrate that the price is determined in the world market, that the miners are recording for the country the extraordinary growth in export prices for their resources."

Goods exports to China - Australia's largest trading partner - increased by 23 per cent in April, while goods exports to Japan, Australia's second-largest trading partner - increased by 17 per cent.

Goods exports to Korea rose by 9 per cent.

Mr Crean says exports to China will remain strong in an economy that is expected to grow 10 per cent this year.

"Obviously in terms of the other debate that is going on at the moment, the Government's tax for resource rent will ensure that Australians get a fair share from this growth."