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  1. #1

    Default WMR - Will it rise today?

    I watched the Business News on Fox Channel last night and saw the CEO interviewed about its results. Its profits are five times what they were last year and it has declared a 17c dividend (6c last time). What I can't understand is that I watched this stock yesterday afternoon and saw it fall quickly (probably after the results had been delivered). If it has such meteoric profits, why did everyone suddenly dump the shares late yesterday? I am inclined to buy some this morning on open but will decide when I see the opening price.

  2. #2

    Default Re: WMR - Will it rise today?

    I took a punt and bought 5,000 @ 4.98. I only ever buy 1,000 at a time so this is a real gamble. They occasionally fall as low as 4.66 so I hope this is not one of those times.

  3. #3
    Pigs In Space GreatPig's Avatar
    Join Date
    Jul 2004

    Default Re: WMR - Will it rise today?

    Here's their chart.

    Current price according to yahoo is $4.93.

    Attached Images

  4. #4

    Default Re: WMR - Will it rise today?

    Thanks for the chart. Yes it does seem to be following the fall as shown in the chart. I like to trade WMR because it has a fairly predictable trading range. I just thought that the good profit announcement would throw predictability out the window but it does still to be following its normal trading patterns. If I end up having to hold it for a while I will console myself with the dividend.

  5. #5

    Default Re: WMR - Will it rise today?

    could be intersting in the next day or two fcn falcon minerals in a trading halt. wmr have an interest in the collorubbie exploration mine out of kalgoorlie. good nickle sulphide results to date with the big one still to come. this could be it who knows.
    suggest all to read the last few reports of fcn imo theres a quid to be made here.

    regards croc

  6. #6
    JetDollars's Avatar
    Join Date
    Jul 2004
    Sunset Beach, Sydney, Australia

    Default WMR - WMC Resources

    Dear All,

    Do you guys believe RIO will try to takeover WMR? if that's the case then WMR will heading north again.

    RIO been cash up for a while now....

    Where will WMR go from here?

    Your comments please.
    Warm Regards

    [If you think my post is for recommendations then you are kidding yourself]

  7. #7

    Default WMR announcement of profit upgrade today

    Here is a part of the public announcement today:

    "WMC Resources Ltd (“WMC”) intends to return up to $1 billion of cash to
    shareholders for 2004 through its ordinary dividend program and additional
    capital management initiatives announced today.
    The announcement coincides with the upgrade of 2004 earnings outlook to
    around $1.3 billion, materially above current analyst consensus estimates of
    around $1.1 billion."

    They have already paid a 17c dividend for the first half and say that the expected second half dividend will be 20c. In addition, they are returning 30c capital (which will be debt funded). By my calculations, the 50c to be paid during the next six months equates to a 7% return at the current price of $7.04. I haven't heard any analyst's comments yet on the announcement. But I can't understand why the price hasn't risen on the news. Substantial volumes are going through but the price isn't going anywhere. I have bought 6,000 this morning based solely that I think 7% return is a high yield. Do you think that the price hasn't done anything because analysts haven't digested the report yet or is there something negative happening that I don't know about?

  8. #8
    Pigs In Space GreatPig's Avatar
    Join Date
    Jul 2004

    Default Re: WMR announcement of profit upgrade today

    I think they're trying to shake off the takeover offer by reducing the value of the company below the offer price. I gather they're not happy with the offer.

    Generally I think share prices wouldn't increase for high dividend yields because after the dividends the company will be worth that much less, and the share price theoretically would drop by the amount of the dividends. So in that sense there's nothing to be gained from a dividend. It's primarily just realising some of the capital growth as income.


  9. #9

    Post WMC $13.50?

    An exiting week(s) ahead of us....BHP running with the ball with 2 beefy forwards (Xstrata/Rio) about to bury it's face in the quagmire....We are lead to believe it's all over bar the shouting.........What board of directors with an open cheque book would let the prize of the millenium escape from their grasp?.......Not to mention the fence sitters France,China,Canada,India !!!!
    I mean...Roxby Downs with 30% of the worlds known uranium, Huge gold stocks, the fourth largest copper miner.(not forgetting huge nickel & zinc assets.
    My friends this is "blue manna crab and cold chardonay".
    I bought in @ $6.84 and had a dream it went to $13.50
    "There comes a tide in the affairs of men which when taken at the flood leads on to fortune"..........

  10. #10

    Default Re: WMC $13.50 ?

    In mid 2004, after reading about the outlook for Uranium and the Kyoto Protocol, I bought shares in WMR at average prices under $5.

    At the time, some brokers were recommending sell WMR. I ignored them.

    I considered WMR a takeover target.

    Soon, further uranium ore discovery at the mine in South Aust. raised WMR's known uranium reserves to 40% of global reserves. All in the same mine. Think of the economies of scale.

    Xstrata made the opening move.

    I read the information provided in the independent valuation and decided to buy more at $7.11, just before Xstrata increased the bid price.

    Then BHP joined the fray, as I had hoped.

    Last week, I saw a few trades at $7.83. Must have been forced selling. It did not occur to me that people would sell at $7.83 and $7.84 but some did. I should have placed a standing buy order at $7.83 as it would be like a risk free option to sell to BHP at $7.85 or even better hope for another bidder.

    In the past few days, there has been speculation that Rio would enter the bidding. Today, this rumour gained momentum.

    I reckon BHP buying at $7.85 would be a bargain, as spot prices for uranium are already at the top range of the independent valuation (based on DCF methods).

    If Rio does enter the fray, another significant rise in the bid price would be a fait accompli.

    As Chip Goodyear stated: "It ain't over until it is over."

    However, I hold BHP, RIO and WMR. A bit of left pocket, right pocket and back pocket!

    Still, better than Xstrata walking away with the prize, IMO.

    Hope this end game plays for a few more months, due to reduced CGT, after 12 months.

  11. #11
    PlanYourTrade > TradeYourPlan RichKid's Avatar
    Join Date
    Jun 2004

    Default Re: WMC $13.50 ?

    So what's the rumour with WMC- that Rio will jump in this week? I missed the rumblings but whoever has so much Uranium under their belt will reap some big rewards. Watch for BHP to go south if they are trumped, even if temporarily, they are awfully close to the recent trend line so I'm cautious and investors appear to be a bit weary of 'The China story' and the resources 'supercycle' atm.

    Here's the chart showing the story. Closed today at 8.13
    Attached Images
    Last edited by RichKid; 26th-April-2005 at 10:27 PM.

    My posts are not recommendations (even when I rave about something). Always rely on your own research & judgement.

  12. #12

    Default Re: WMC $13.50 ?

    In an article on the kitcometals website, comes the following:

    "Prospects for South Australia to play a much larger role in servicing the excess world demand for uranium are likely to dominate a two day review this week, which will look at the State’s mineral wealth and pace of development.

    The options to explore for, and potentially mine new uranium deposits have emerged at a time when South Australia is enjoying its most prolific mining exploration and development activity in nearly two decades.

    Prospects will come under the spotlight today and Tuesday when a record 260 delegates and 35 exhibitors attend the South Australia Resources and Energy Investment Conference.

    “The uranium debate is heading for a meltdown at political, industrial, mining and investment levels,” Conference organiser, Mr Bill Repard, said.

    “This is being fed by massive international investment, particularly in China, in new nuclear power plants, and, a growing recognition to ‘re-debate’ uranium as a future fuel, given the more public acceptance now of the negative environmental impacts of continued fossil fuel reliance.

    “Simply put, the planet’s power demands are outstripping its resources. Many see nuclear power, derived from the precious yellow cake, as the panacea to the problem.

    “South Australia occupies a unique position in this regard. The State hosts two operating uranium mines, with one single mining operation alone - Olympic Dam - home to more than a third of the world’s uranium resources.

    “In addition, there are other Australian targets which could take the country’s share of the world uranium resource, considerably higher.”

    Mr Repard said the greater public and investor support for uranium exploration was evident in the number of new mining companies that now counted uranium projects in South Australia among their key targets.

    The 2005 South Australian Resources and Energy Investment Conference commences at the Hilton Hotel early this morning.

    - 02 May 2005 "

    BHP has extended the takeover offer to 3/6/05.

    Excellent. This saves me a chunk of CGT, by crossing the 12 months' holding period. Hope it plays out to after 30/6/05, to cross the next financial year. Can make more money from the "free float" of money for another year, before handing to ATO.

  13. #13

    Default Re: WMC $13.50 ?

    In recent weeks, I have read reports that suggest BHP could be paying too much for WMR. From my previous research into WMR and the global supply and demand equation for uranium, I still think $7.85 if achieved, is a bargain price for BHP.

    The following article that I stumbled across is indicative:

    Uranium is the hottest investment in the world, says James Dines

    By Stanlie Hunt November 2, 2004

    Mr. Dines has over the years picked major trend moves right at the beginning for his subscribers. He is now HOT on all metals and especially Uranium which he states is the hottest investment in the World, because of the supply and demand factor and that some utilities will be going dark because of it.

    Mr. Dines’ comments made me look even further and I was introduced to Australia Uranium company (Australia produces 40 percent of the World Uranium) so I asked the managing Director to explain to me where we were at this junction in the energy field. He stated we are at the beginning of a world crisis in energy. He reviewed the history of energy development from the year 1900 to 2004 and announced that North America has been in a huge growth curve since that time. He stated that Asia in comparison is where North America was in the year 1910. Other words we are in the start of the biggest energy crisis the world has ever seen. He fears that there is no way to keep up with the demand because it takes years and years of development to supply and meet such future demands. A bidding war could sky rocket Uranium towards $100.00.

    Mr. Dines has stated, that already he has made his followers lot of money in Uranium investments. If the energy crisis goes to the magnitude he predicts, all metals and energy companies will be continually be bid upwards.

    The Dines Letter is one of the oldest stock-market newsletters of its type in the world, offering advice on stocks and commodities.

    Note: Smartstox finds these comments to be very scary for the future but it seems that the future is already here and that the bidding of metals and energy is a given factor. My question - Where are the investors in the junior resource sector??? This sector carries the cradle of new discoveries and developments that will fuel the World thirst for resources. Wake up everyone. This resource and energy sector will explode when the mainstream investor does wake up.

  14. #14

    Default Re: WMC $13.50 ?

    I heard China and the US are going to build a large number of nuke plants.

  15. #15

    Default Re: WMC $13.50 ?

    Looking at these charts, if the WMR take over works out, the prices will go north, otherwise a loss of confidence will probably be reflected. Its already tending toward the oversold territory and there has to be a reason for that. Certainly poor commodity prices is an issue. At the moment, a highly speculative stock.
    This is merely my opinion and does not constitute financial advice. When considering your financial objectives, please consult a suitably qualified and licenced professional.

  16. #16

    Default Re: WMC $13.50 ?

    South Africa will draw up special rules for mining uranium and make the ore a protected resource to help support its burgeoning nuclear industry, the country's minerals minister said yesterday.

    South Africa has abundant reserves of uranium and plans to use this to source nuclear energy as it scrambles for new energy sources to meet rising demand for power.

    "South Africa is at the forefront of developing high temperature reactors in the form of the PBMR (pebble bed modular reactor) and we will for that reason declare uranium a protected mineral resource," Minerals and Energy Minister Phumzile Mlambo-Ngcuka said in a speech to parliament.

    "We will announce a special dispensation for licencing uranium exploration, prospecting and mining," she said.

    The government sees nuclear energy as crucial to its future needs and plans to build a multi-billion rand pebble bed reactor near Cape Town to add to its existing nuclear facility.

    The reactor is an advanced design that claims to dramatically enhance safety and efficiency, but which environmentalists say is unsafe.

    Mlambo-Ngcuka said South Africa was committed to nuclear power and would use its uranium resources to ensure security of energy supply.

    Nuclear energy from the Koeberg plant currently accounts for about 6% of South Africa's energy supply, with 88% sourced from coal.

  17. #17

    Default Re: WMC $13.50 ?

    BHP seeks closure. I now have some homework to do. My instincts tell me to hold, because the spot price of uranium has touched USD 29 per pound.

    The maximum value by Grant Samuel, the independent valuer, based on DCF, used USD 22 per pound.

    Copper and nickel outlook still looks reasonable.

    I can buy WMR at $7.83 at the moment. Interesting. Food for thought.

    May 26 (Bloomberg) -- BHP Billiton, the world's largest mining company, said it doesn't plan to extend its A$9.2 billion ($7 billion) takeover offer for WMC Resources Ltd. beyond June 3 as it tries to speed acceptances from WMC shareholders.

    The company has received acceptances from holders of 4.49 percent of Melbourne-based WMC for its A$7.85-a-share cash bid, BHP Billiton said in a statement to the Australian Stock Exchange. The offer would automatically be extended for two weeks if the Melbourne-based company reaches more than 50 percent.

    Shares of WMC, the world's fifth-biggest nickel metal producer, have traded above BHP Billiton's offer amid speculation of a rival bid from companies such as Rio Tinto Group. WMC said in a separate statement it hasn't had any other approaches since BHP Billiton's March 8 bid.

    ``WMC shareholders now need to make a decision,'' BHP Billiton Chief Executive Charles ``Chip'' Goodyear said in the statement. ``It is not in the interests of BHP Billiton or WMC shareholders to further extend the offer. Should the offer lapse, we will continue to follow our clearly set out strategy focusing on value-creating opportunities.''

    BHP Billiton also has an economic exposure to 4.3 percent of WMC's shares through derivatives contracts, it said.

    WMC shares yesterday fell 1 cent, or 0.1 percent, to A$7.90 on the exchange. BHP Billiton stock yesterday fell 5 cents, or 0.3 percent, to A$16.20.

    WMC shareholders ``should act swiftly,'' because WMC's stock price may fall below BHP Billiton's bid if the offer lapses, WMC said in a separate statement to the exchange.

    ``In the 11 weeks since the receipt of BHP Billiton's offer, your board has not had any other approaches,'' WMC said.

  18. #18

    Exclamation Re: WMC $13.50 ?

    Quote Originally Posted by Investor
    I can buy WMR at $7.83 at the moment. Interesting. Food for thought.
    I think the greed is going to prevail here. I will be interesting to see how this share falls once the offer close. I think if this scenario happens $7.83 is not near to be a good deal at all.

    Let's wait until 3 June.


  19. #19

    Default Re: WMC $13.50 ?

    Quote Originally Posted by mime
    I heard China and the US are going to build a large number of nuke plants.
    From WMR's Target Statement, in Annexure C, according to the World Nuclear Association, as of Oct. 03, there were 441 nuclear power plants in the world.

    From The Bulletin Magazine; "Global annual demand for uranium is about 77,000 tonnes but mines only produce about 36,000 tonnes. The difference is made up from stockpiles, which are rapidly depleting and from sources such as decommissioning of nuclear warheads.

    WMR and other miners believe they will have to step in and fill much of this gap before long, especially if demand for nuclear power expands.

    The Uranium Information Centre says China and India intend to quadruple their nuclear power generation capacity by 2020.

    There are 28 new nuclear reactors being built around the world, another 30 seeking finance and another 50 being proposed. If all get to fruition, it is a 25% increase in nuclear plants.

    Olympic Dam is well placed to cash in. It has the reserves and the government approvals. Any expansion by WMR will be cheaper than a new mine because much of the infrastructure is in place. Then there is the fact Olympic Dam's uranium ore is enriched with copper and gold. Capping all these is the premium price that Australian producers receive because they have a record of reliable supply."

    My comments:

    Clearly, demand for uranium will soar. The new plants are being built. When the construction is finished, the owners (mainly governments) will have to buy uranium (to state the obvious). The government buyers have deep pockets to spend. They must buy at whatever price they have to pay.

    South Africa's government has locked up their supply (national treasure). This reduces a huge supply source. This fact alone might have prompted BHP to get on with the bidding process of trying to lock up WMR.

    The spot price of uranium has continued its upward trend from USD 20 per pound (six months ago).

    When the 28 new nuclear plants are completed, it is logical that the spot price of uranium will soar. How much? USD 35 per pound would not be unrealistic. USD 50 per pound would probably still be paid, if the buyers cannot get supply. In the former scenario, WMR's DCF could be worth $9 to $10 per share, provided copper and nickel prices hold.

    Looking at the supply and demand equation and the fact that most uranium buyers will be governments with buying power who must buy at whatever price they have to pay because they have already built the new plants, I would say that BHP is getting a bargain at $7.85 for WMR. Yet, the hedge funds will deliver WMR to BHP at this price and BHP will extend the bid by another 2 weeks, after passing the 50% holding mark on June 3, unless another bidder emerges at the 11th hour.

  20. #20

    Default Re: WMC $13.50 ?

    In The Australian today:

    May 27, 2005
    BHP has thrown down the gauntlet to Rio Tinto - put up or shut up.

    In the process, it will force Rio to publicly resolve its internal differences. But the BHP decision also exposes a deep strategic debate in BHP that seems to have been resolved in favour of removing WMC's top people at the Olympic Dam uranium/copper complex and replacing them with BHP talent.

    If that's what BHP does, its shareholders have every reason to be nervous, given the sensitive nature of uranium production and the major expansion that is planned.

    If BHP goes into uranium along a high-risk management path, then the board must accept the blame if anything goes wrong.

    I now think it is unlikely Rio will make a WMC bid. The hedge funds that effectively control the company cannot risk big losses, and so are likely to deliver control of WMC to BHP, just as the June 3 deadline approaches.

    It's clear a number of Rio directors, led by chairman Paul Skinner, were very tempted to make a WMC bid.

    BHP's bid price wasn't high and Rio's Ranger and Rossing uranium mines have limited lives, so Rio needs a company like WMC to be a long-term uranium player. Skinner believes in greenhouse and the role uranium will play in reducing carbon emissions.

    But his chief executive, Leigh Clifford, was very cautious about taking on BHP over WMC.

    Clifford has done a wonderful job for Rio but will probably retire in the next couple of years.

    Clifford and Skinner are nervous about the US economy and the possibility of a resources price correction, which might affect the worth of WMC.

    Moreover, as a uranium producer, Rio knows that WMC's Olympic Dam is a tricky management challenge. It was built to a price and, as a result, in the early years it was plagued with breakdowns.

    WMC's directors have invested in special expertise to make Olympic Dam reliable.

    Had all Rio directors determined last month that they did not want WMC at the BHP price, it would have been easy to claim that BHP had bid too much and withdraw. But instead, when asked if Rio would bid, Skinner said "no comment" at the annual meeting, indicating a WMC bid was still under consideration.

    And to underline this point, a few days earlier he told me: "It is never over until the ... lady sings."

    Given the difference in emphasis between CEO and chairman, Rio naturally hoped BHP's bid might fail. The odds are now that it will not fail -- unless Rio unifies behind a bid.

    If BHP gains 100 per cent of WMC then, like most successful bidders, its executives will want to replace the target's top people with their own. There is no doubt that if BHP uses the "conqueror" approach in WMC's head office, or in nickel, there is little risk because the bidder has the required talents.

    But, apart from the Magma exercise, BHP has limited experience in producing copper metal and none whatsoever in uranium.

    WMC's uranium/copper operation will report into BHP's copper division, which is based in Chile and under the control of that country's Diego Hernandez. He is a long way away and will need the right people on the ground.

    Many BHP copper executives believe Olympic Dam has not performed and needs a new approach. Others wanted to retain WMC's senior skills base at Olympic Dam until the company fully understood what was involved in making uranium - especially as it is uranium that makes the stock worth $7.85 a share.

    WMC engineers say the messages currently coming out of BHP are very similar to the noises that came out of the old Billiton: "We are the greatest."

    If the top couple of people at Olympic Dam are given the boot by the conquerors then, given the global shortage of talent, key parts of the uranium skills base may go out the door.

    Nevertheless, it is possible BHP will transform the profitability of Olympic Dam. But if they get it wrong and there is another major breakdown it will invigorate anti-uranium forces and delay expansion.

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