today's trades, page-42

Apologies up-front as this will be a bit of a lengthy post. I might shut up for a while after this so as to stop annoying everyone.

First of all, I had a good conversation with MA today, the main points are:
- fundamentals haven't changed. SP weakness likely due to year end consolidation
- 100m of the 135m distribution intended to be fully-franked, with the remainder a tax-free capital return. The CCP sale should be finalized in the next few weeks. The ATO ruling can't be lodged until the sale is finalized, but they have indicated they can give the ruling within 2 months. Shareholders will need to approve the capital return, so that requires another month's notice. He still hopes to make the distribution before the end of October.
- drilling is underway and updates will start as soon as the sale is finalized. MA's view is that the market incorrectly things they have sold the farm, so the drilling results should start to change that perception. He is still very confident of replicating the CCP success
- copperchem mining has commenced and therefore so is our royalty entitlement. It is paid quarterly, so it won't show up in the June quarter. Currently negotiating similar royalty deals with Mt Colin and Pumpkin Gully deposits
- WD production for the June quarter was performing just as well as the last. Currently assessing the best way forward with the WD extension so as to keep production at current rates. Expect to hear about this soon.

Mattao, in relation to your question, firstly I totally agree there is a massive value proposition for tax exempts and super funds and hence why I have been buying up. In terms of the likely SP post distribution, I like to work backwards and start with the premise that EXS is going to have at least 18c of cash-backing after payment of taxes (per MA's comments in the Sydney presentation). To me, this has to put an absolute floor on the SP post-distribution, although I believe the SP will trade much higher than this as the value of it's other assets will be more evident when there is less cash in the company. To this extent, the additional 12c of cash from franking credit refunds for tax exempts and additional 6c for super funds is effectively a risk-free return and a no-brainer. As such, what is most likely to happen is what JPGM and Oze have stated a fair few times already in that we will see the SP trade up pre-distribution to somewhere in the 70s to take into account this benefit.