the kicker however is this:
NTA - 215cps ($2.15)
current price - $1.54
Why do i always put stocks on my watchlist that seem to head up, and buy the ones that go sideways
If only i knew...
In our assessment, the Cracow acquisition would confirm that Lion Selection is on the path to becoming a conventional mining company, with the value of production assets approaching the value of investments. We would expect that the market would move to value LST as such, rather than trading at a discount to NTA.
The life-of-mine plan is regularly reviewed and, with the inclusion of the Sovereign, the current mine planning inventory is 1.6 million tonnes containing approximately 446,000 ounces of gold. The remaining mine life is approximately five years. However, assessment of other shoots is expected to further extend mine life.
A recent search of Lion’s share registry has indicated a holding of approximately 5% of which Lion has concerns regarding the beneficial owner and correct disclosure. This has been noted to the ASX and ASIC in early January.
I'm pretty sure LST has been in trouble due to management concerns and exposure to non-performing juniors, view resources etc I believe. Though, the NTA does indeed exceed the price- have a look at the LPT sector, same story. It's simply a reflection of very bearish sentiment. This said Lion, unlike LPTs though can benefit from the likely increases in gold. Maybe a contrarian bet, but personally I'd want to see some sp proof sentiment has changed
Not a long term holder but have followed it closely.Very nearly bought in today but thought the better of it... will wait for evidence of a turn around. Any LST holders here just out of interest?
Indophil targeting Lion Selection
Wednesday March 19, 2008, 7:45 pm
The former major shareholder of takeover target Allegiance Mining NL has itself become corporate prey for an industry predator.
Indophil Resources NL has launched a two-tiered scrip takeover offer for Lion Selection Ltd, which values the target as much as $340 million.
Lion Selection, an investment firm focused on junior miners and a former shareholder in Allegiance Mining NL, holds a 30 per cent stake in Newcrest Mining Ltd's Cracow gold mine in Queensland.
Lion Selection has a pre-emptive right over Cracow, which enables it to match any accepted offer made for Newcrest's 70 per cent interest.
In a statement last week, Lion Selection said its vision was to transform from an investment company into a mining company.
Lion Selection sold its 5.01 per cent stake in the now Zinifex Ltd-controlled Allegiance last week, pocketing $48.5 million from the sale and giving it about $110 million cash in the bank after tax.
Melbourne-headquartered Indophil is focused on developing its 34 per cent-held Tampakan copper-gold project in the southern Philippines.
The base consideration of Indophil's offer is 2.5 of its shares for each Lion Selection share if the offer becomes, or is declared, unconditional.
The higher consideration is 2.7 Indophil shares for each Lion Selection share if the offer becomes or is declared unconditional, if Indophil acquires 90 per cent or more of its target and the Lion board unanimously recommends the offer and accepts it in respect of all Lion Selection shares owned by it and its associates.
Indophil's offer is conditional on a 50.1 per cent minimum acceptance level.
In a statement issued after the market closed on Wednesday, Indophil said there was "strong financial and strategic logic for combining the two companies, with potential for superior value creation for all shareholders through synergies focused on optimised project development".
"For some time, Indophil and Lion Selection have been exploring options for combining Lion's resources portfolio with Indophil's assets to build a significant mining company ... nothing concrete eventuated."
Shares in Indophil closed steady at 66 cents, while Lion Selection's shares finished 1.5 cents higher at $1.35.
Good on Indophil
Barry FitzGerald
March 24, 2008
Indophil
GOOD on Indophil Resources (IRN) for serving up a takeover bid for its 25.7% shareholder, Lion Selection (LST).
As analyst Chris Brown at ABN Amro Morgans observed, it is a case of the grossly undervalued (Indophil) bidding for the undervalued (Lion).
"I hope you own one or both of them, but I have no idea which one will perform better from here," Brown said in a note to clients last week. He was right.
Garimpeiro's interest is in the grossly undervalued Indophil. It closed at 61 ¢ a share last Thursday, giving it $230 million market capitalisation.
That's for a company holding $100 million cash and with a 37.5% stake in Tampakan, one of the world's biggest undeveloped copper/gold deposits. At last count, Indophil's share of the undeveloped $US115 billion ($A127.5 billion) resource - yep, that's right - was $US43 billion.
The Tampakan interest is at the heart of Indophil's hostile bid for Lion. Fearing that Lion could look to cash in its Indophil stake to fund its own ambition to switch from resources investor to miner, Indophil has set out to ensure it remains hitched to Tampakan, a joint venture with Xstrata. The prize of a Tampakan development is too big to let go.
Ever acquisitive Xstrata is working at having Tampakan in production by 2012 and if the Lion stake in Indophil were to shake loose, it would be sure to pounce. But should Indophil's bid for Lion succeed, Lion's shareholding in Indophil would be cancelled, allowing Indophil to slam the back door on a low-ball bid from Xstrata.
Just as important would be the additional $105 million that the Lion acquisition would tip into Indophil's coffers. Xstrata will be setting a cracking pace in the multibillion-dollar development of Tampakan, and Indophil will need to keep pace.
Lion Selection Limited (Lion) has received notification that Newcrest Mining Limited (Newcrest) has signed a conditional agreement to sell its 70% interest in the Cracow Gold Mine for A$200 million plus a cash royalty.
• Lion owns 30% of Cracow. The bid implies a value for Lion’s 30% interest of A$86 million or approximately 12cps above the value attributed to Cracow in Lion’s Net Tangible Assets (NTA). Lion’s most recently released NTA (as at 29 February 2008) was $1.82 per share. If the value implied by the bid were used to value Cracow, the NTA would have been $1.94 per share.
• Lion has a valuable pre‐emptive right to acquire Newcrest’s interest. Lion has 50 business days to make a decision once the pre‐emptive period starts. Lion is reviewing the terms and conditions of the purchase and sale agreement delivered by Newcrest today and will formulate its plans in respect of this high quality, low cost gold asset.
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