Again our Chairman tries to reduce what has been shaping up as a first class tragi-comedy into a farce. Given that when the final curtain falls, I will have paid a seven figure sum for my ticket to this show, I am disappointed with the performance of the key players.
Recent twists in the plot, such as the overseas roadshow and delays to asset sales (perhaps a higher bid?), have given me a glimmer of hope that the Board and management retain some vestiges of Machiavellian cunning and corporate nous and might be treading a thin wire to secure the company in the interests of existing and not future shareholders. Our Chairman, who obviously has no sense of theatre, ruthlessly destroys these delusions.
Where to from here?
From WA News (apologies if already contributed)
"Olympic Dam is probably going to slip by at least two years in its timetable, if not longer," Mr Grigor told reporters in Adelaide. Mr Grigor suggested BHP Billiton may be better off making acquisitions rather than expanding the mine in the current economic climate. "We really don't know where the end of the tunnel is in terms of this economic crisis and it would be very brave of BHP to be throwing a lot of money at that when they can buy so many other bargain-basement assets around and extend their power that way," Mr Grigor added. The world's biggest mining company was aiming to have the first stage of its five-phase Olympic Dam expansion in production by 2013, according to a BHP Billiton presentation released in October. This phase was to optimise the existing underground operation and increase production capacity to 200,000 tonnes of copper, 4,500 tonnes of uranium and 120,000 ounces of gold. A BHP Billiton spokeswoman said on Monday the "company hadn't updated the timetable" since the October presentation. But activity at the project had been scaled back, she said.
A very close contact whom I trust ( ex merchant banker who was involved directly with the old OXR), but nobody else should, advised me very late Feb that the banks would roll over for another month, but the fireworks would begin in March sometime when BHP made a counter offer. Great news I thought until he further advised that the bid might be less than the cash equiv offered by MM. Anyway, does tie in to Mr Grigors ( as well as many others, I know) hypothesis. PH at 120000t/yr as well as Sepon @ 60000t is pretty close to proposed 200000t OD expansion which will cost $$$$$
Why is OZL doing a road show to convince OS shareholders the MM offer is the best deal since sliced cheese? And now the Chairman asks us to be thankful for the MM deal. I know it’s a stretch, but perhaps they are concerned Aust Share holders would prefer to accept a slightly inferior offer from BHP. Firstly you might convince yourself that you might eventually redeem some of the loss by investing in BHP that now own PH and other OZL assets. Secondly you might deny our Chairman, Board members and senior management any lucrative contracts with MM - do not totally dismiss revenge in a situation such as this. Of course news of FIRB decision and definite asset sales will keep us glued to our seats. I remain hopeful the very recent strength in metal and equity markets might help us, but the reality is, I know, that tragi-commedies end tragically (being an eternal optimist maybe the required tragic ending will see the Board and not shareholders suffer the ire of the Gods)
ML
OZL Price at posting:
$6.10 Sentiment: Hold Disclosure: Held
