Polo Res.(See LSE:POL) Share Discussion Threads

[gurp] 12/2/2010 10:06

I've held several U explorers for a while now, this point of building up of & securing sources for the future has been around a while but never really reflected in the U price, a couple of years ago the yanks suddenly dumped a load on the market.
the cf chart of ext & pdn mirrors that of gcl(a U Inv Trust)
The indicators on the latter chart are at rock bottom so hoping for a good turn-up in demand for suppliers & EXT/PRL sp's

[zangdook] 12/2/2010 08:18

Mark

It seems odd, though I suppose it couldn't be otherwise, that Mr Dattels has to step back from certain matters at Polo because of his directorship at Extract, when the only only reason he has that directorship is because of Polo's interest, ie he's Polo's man on the EXT board.

[azalea] 12/2/2010 08:04

Oh I agree absolutely, PRL is not going to let go of its stake at a give away price. This asset is not going to diminish in value, quite the opposite as global demand for uranium led by China increases. The big players have got their strategic hats on and are planning how best to capture a sizeable chunk of one of, if not the most important energy resource of the 21st century.

[marben100] 11/2/2010 20:48

My point is that I do not believe that Polo would sell its Extract stake simply to raise cash. It is only if they are offered "fair value" - which IMO is a price way above the current market price for Extract shares that Polo would sell.

Such an offer may or may not be forthcoming in the near term - but the odds are reasonable IMO.

[azalea] 11/2/2010 18:05

marben100
In essence I have no argument with your views. I am not concerned with the mechanical details of BMO methods and findings which automatically provides for a buffer between Dattles and other resposibilities and parties. I am merely focused on the end game which I judge to be PRL seeking to dispose of its Extract holding and achieving a price and conditions agreeable to all concerned.

[marben100] 11/2/2010 16:16

Aye, aye - Polo taking a bigger stake in Caledon:

"Caledon announces a private placement of £4.2 million nominal 8.5 per cent. unsecured convertible loan notes due 2013, each with a par value of £50,000 (the "Loan Notes") to certain existing shareholders and other investors ("Placing")...

...One of the principal investors in the Placing is Polo Resources Limited; which is an existing substantial shareholder of the Company and a related party for the purposes of the AIM Rules for Companies ("AIM Rules"). As a result of Polo's participation in the Placing (being the nominal amount of £2.5m), the Placing will be classed as a related party transaction under AIM Rule 13."

Cheers,

Mark

[marben100] 11/2/2010 16:10

azalea - strongly disagree. IMO the Extract stake most definitely IS strategic (considering Dattels & Mellon's substantial personal interest in companies with stakes in Kalahari).

The reason for the BMO announcement, IMO, was strictly regulatory. There may be offers for Extract under discussion. Extract has announced a deadline of 18th March for receipt of proposals from companies that "wish to partner with it" and has indicated that it has received strong interest. What the result of those proposals is remains to be seen. Because Dattels is a Director of Extract, Polo's actions must be seen to be independent of him, to avoid accusations of conflict. This allows a party that might be interested in "partnering with Extract" to approach Polo (via BMO) about Polo's Extract shares, without Dattels being conflicted in his role at Extract. Hence also the reason for the establishment of Polo's "Independent Investment Committee" (which Dattels is not a member of). Polo's management has confirmed to me that this was to avoid conflicts of interest.

I can only see Polo selling its Extract shares to a party that is also prepared to buy Kalahari (which implies a bid for the whole Extract), otherwise Dattels & his friends would risk losing out (as, IMO, would Polo).

Cheers,

Mark

[azalea] 11/2/2010 14:59

zandook
The source is the announcement by PRL that it has appointed BMO to advise on strategic options to "enhance shareholder value" with respect to its share holding in Extract. Whilst I said previously, the directors have no strategic option( as opposed to financial ones), its a question of interpretation of the word strategic. I consider the word strategic to mean long term/far reaching, as oppposed to the word strategy -ways and means of achieving an objective. That said, I think the indication of intent lies in the words to "enhance shareholder value". Even if it ended up in PRL swappping its stake in Exract for some other asset(which I think most unlikely) the directors will at the end of the day want to see a rise in PRL share price To that end I believe they want BMO to explore ways and means of selling Extract for the best price possible.

[zangdook] 11/2/2010 13:22

azalea - 11 Feb'10 - 08:01 - 6257 of 6261

The directors want to see a return on their very substantial investment in PRL whose interest in EXT is financial not strategic, so if the price is right they will sell. The whole purpose of hiring MBO is to find out the most rewarding way of selling the EXT stake.
------------

Do you have any source for what you say?

[azalea] 11/2/2010 11:53

dbno
There are 'people' better placed and equipped to deal with such matters, leaving the directors to get on with the projects in hand.

[brian1944] 11/2/2010 10:30

Coal India Chairman: May Invest $2 Billion To Buy Stakes In Overseas Assets

[dbno] 11/2/2010 10:27

Couldn't they work that out for themselves?

[azalea] 11/2/2010 08:01

The directors want to see a return on their very substantial investment in PRL whose interest in EXT is financial not strategic, so if the price is right they will sell. The whole purpose of hiring MBO is to find out the most rewarding way of selling the EXT stake.

[kerrie3] 11/2/2010 07:46

cheap as chips imo and as someone recently posted the Directors are gonna want a lot more value than this given they are paid in shares and have also been buying shares at a lot higher price.

[alex_raga] 10/2/2010 23:02

GCM paid 3.7 thats not far away. Do they still own the 74.8mill

[marben100] 10/2/2010 21:01

If a bid were launched for Extract at a price that Polo's directors felt represented fair value, then I expect they'd be happy to sell. I can't see them selling simply to raise cash, for the reasons I explained in my earlier post.

[2bozmo] 10/2/2010 17:51

Mark,

Given that Extact is the jewel in Polo's portfoio, why would they be considering off loading now? There's been some chat that Polo selling Extract to take-over GCM? Any thoughts here? Know you've not always been a believer in the whole GCM/Phulbari project in the past but would value your opinion here?

[barryrog] 10/2/2010 17:32

forget the current share price of Extract Resources - thats just a reflection of punting by small traders.
it's what it's likely to be worth as the full story unfolds and how much the Big Boys will be prepared to pay for a sizeable slice of the action thats the key.
read the latest release last Friday, there is obviously no shortage of interested parties.

[marben100] 10/2/2010 17:31

Aughton - try this:

[azalea] 10/2/2010 16:35

In due course BMO should be reporting back to PRL on the options for realising the best value for its EXT stake, until that happens I do not expect to see PRL making any decisions.

[aughton 3] 10/2/2010 16:21

marben what was the other site you post on can you remind me

[marben100] 10/2/2010 16:09

...and for those that can't be bothered to DTOR... if Polo's EXT stake went for A$15, as I've postulated, that would yield over 8p/share of cash in Polo's coffers + 2.3p of other assets (mainly Caledon, GCM and Berkeley shares) at their current market value.... and Mongolian JV in for free (all figures undiluted).

At current market values, the assets (excluding the Mongolian JV) are worth 6.1p/share undiluted; 5.7p/share fully diluted.

Of course, my figures could be totally wrong, so you're strongly advised to DYOR!

[marben100] 10/2/2010 15:58

FWIW - I don't believe for a moment that Polo would sell its stake in EXT at anything like its current price. Polo's directors are not stupid and, unless I'm reading this wrong, the current market price for EXT is a very poor reflection of its true value.

Secondly, Polo's principals, Stephen Dattels and Jim Mellon, have big personal stakes in Regent Pacific, EML and Brazilian Gold Corp (as well as in Polo and Extract directly). These other companies, in turn, have major investments in Kalahari. Divesting Polo's EXT stake would weaken Kalahari's control over Extract and would likely depress the SPs of both companies and the value of Dattels & Mellon's holdings.

As I see it, there are two possible routes forward:

1. Accept a reasonable bid for the whole shebang (Kalahari + Extract) in the relatively near term (i.e. by the end of 2010). I would agree that this is likely to be the preferred route - but I doubt they'd be happy with a price equivalent to much less than A$15 per EXT share (being 600Mlb @ A$6/lb).

2. If such a bid is not forthcoming, D&M could become major players in the U market in their own right, by effectively controlling 10-20% of the world's annual production (which is what I believe Extract could deliver). They could squash competition by flooding the market with cheap uranium (IMO Rossing South will have one of the world's lowest operating costs/lb) - and then squeeze consumers as demand climbs, without corresponding production increases.

Considering that 2. is foreseeable by the likes of China, paying A$3.6bn+ now seems like a pretty sensible option for a big future consumer - so my betting is on option 1. ;0)

Cheers,

Mark

[peterboroughmatt] 10/2/2010 15:56

talk about not dyor ,lol