Do not sell your shares - we as shareholders need to stand together and ensure that we retain the minimum 10% holding to prevent us from being robbed blind. Please take the time to read the info below. Analysis of the results over the past 24 months confirm that the company's profits and hence also it's share price, has been depressed by the copper sales price hedges, which they have had to provide "forward" for in each set of results, for the future differences between the hedge contracts and the spot price of copper, at the end of each financial reporting period. We all know that these hedges were taken at between 3000 and 4000 USD/T, whereas current spot pricing is hovering at 9500. These hedges expire mid 2011 - all results for 2011 will already be at a minimum selling price of R9,500, taking into account the release of previous financial year hedge provisions. Future results will be at spot copper prices. We also know that there is an existing shortfall of 400,000 Tons of copper global production versus annual demand. China alone is planning to urbanise 60% of their population over the next two decades - this amounts to rebuilding the equivalent of whole of current Europe. Never mind about growth in India and other developing countries. At current forecasts, at EPS of R1.50 to R2.12 per share, the R7.35 offer is ridiculous. At a realistic EPS of R2.00 per share going forward from 2012 onwards, and a low (realistic) P/E ratio of 10, the Metorex share price should be at R20 in two to three years' time. A major SA institutional representative (on Summit program on DSTV channel 412) put Metorex forward as their share ***** on the JSE for return over 24 month period, with a target price of R15 in two years' time, +- 5 months ago. One has to question the motives of why the Board would be supporting this offer, thereby taking away the opportunity of long-term Metorex shareholders, who have suffered the losses and share devaluations over the years, from recovering their money and making their rightful returns. Perhaps the Financial Services Board should look into the hundreds of millions of shares which are now being mentioned as held by associates and which will be sold to Vale in support of their offer. When were these shares bought and at what prices? Also at the timing of the disposal of millions of shares on Friday afternoon.
Ja, I am also not happy with the bid, but it is better than a kick in the goolies. The hedge structure falls away, but by my calculations, based on their own forcasts, MTX will have to trade at a PE of above 10 to maintain a stock price above R7. And there lies the problem - they do not have 10 years life of mine in their current operations. They are going to need significant more capital to further develop their assets. And given their recent track record, and the stability of the environment they work in, that capital is going to come at a price. Vale will be much better suited to inject further capital into the project. It is a real pity, because it leaves us South African investors with no more pure copper players (other than Palamin, which is doing great - but too mature for a long term play)
At earnings of between R1 and R2 per share annually, and with their loans paid off, Metorex will generate cash of between 1 and 2 billion rand per annum - why would they need financial funding from vale to support development?
So all you greedy chops - What is Metorex worth ? This price is 40% above the average shareprice over the last six months and currently @ a PE of 20 assets in the DRC (read high risk)is only worth so much. I think it's a fair offer.
Re:Re:Re:Sens announcement - R7.35 per share buy-o...
and future earnings are dependent on the life left in their assets. If they don't bring their next projects on line (read large scale capital injection), then by their own forecasts, their assets are only good for the next 7 years.
Re:Re:Re:Re:Sens announcement - R7.35 per share bu...
Mr bandito - If you cut through all the noise around this share R7.35 is a fair offer. The "what if" scenario's doesn't cut it when it comes to aquisitions. Metorex remains high risk and that calls for a discount to whatever might or might not happen to future earnings. The Metorex board I think is just to happy to get a partner like Vale to finance future expansion, seeing that the rights offers and debt they had to incur in the last few years was quite hard to swallow for investors - hence a R7,35 price (and offer) and not R28 like in the hey days.