de crespigny trying to get url for half its worth

Just a rehash of the BBY research report really, but in article form.

Feel free to call me a broken record again mickryan, really couldnt give a damn what you think.

Cdchi1

de Crespigny’s copper plan goes Universal
By: Peter Gonnella
Posted: '21-DEC-04 10:06' GMT © Mineweb 1997-2004

PERTH (Mineweb.com) -- Former Normandy Mining chief Robert Champion de Crespigny is trying to swallow fellow Aussie copper play Universal Resources [ASX:URL] for about half what it may be worth, say analysts, in his quest to build an emerging copper group.

Aussie junior CopperCo [ASX:CUO], which is 19.1 percent-owned by de Crespigny-chaired resources vehicle Buka Minerals [ASX:BKA] (post an equity raising – see below), has made an unsolicited all-scrip off-market takeover offer for Universal, priced at a significant discount to the target’s potential valuation, according to Aussie broking firm BBY Ltd.

At a closing share price today (Tuesday) of A$0.023, CopperCo’s six-for-one bid for Universal represents a see-through acquisition value of A$0.138 per Universal share or just over A$27 million, although CopperCo had already snapped up an 11.7 percent equity holding at A$0.12/share prior to launching the merger offer. Shares in the target ended the day at A$0.14. In other words, an initial premium of about 14 percent last week has been eroded.

Universal’s flagship asset is the possible A$65 million, 50,000 tonnes per annum low-grade Roseby copper project, which it now has full control of after buying out former joint venture partner Bolnisi Gold’s 50 percent stake and which can be developed uninhibited by the previous cumbersome JV structure (see related article). With Roseby and its nearby advancing Lady Annie project in the Mount Isa region, north west Queensland, CopperCo hopes to become a 65,000tpa copper producer in a couple of years.

Although a finished Roseby bankable feasibility study (BFS) is still around 12 months away, “Universal appears quite undervalued on an absolute and comparative valuation basis,” noted BBY analyst Ted Leschke. “We calculate a potential DCF valuation range for Universal at between A$0.29/share and A$0.34/share using a US$1.10 per pound and US$1.20/lb copper price (currently around US$1.39/lb) and based on an operation producing 48,000tpa copper and 19,000 ounces of gold over eight years.

“Given that a BFS is yet to be completed it could be argued that the correct DCF valuation should be discounted to some degree given the uncertainty over some operating parameters,” Leschke suggested. “However, this is offset by the current strong copper prices and the fact that no value is ascribed to a potential resource upgrade or any exploration potential outside the current drilling shell.

“In addition, Universal has an enterprise valuation of just A$31 per tonne of copper equivalent which is significantly less than all of its competitors who have undeveloped or developing copper projects.”

At the same time CopperCo has undertaken a share placement to institutions and sophisticated investors totalling 227.3 million shares at A$0.022 each raising A$5 million, to go towards both the purchase of existing and possible additional blocks of Universal stock. As a result of the issue CopperCo’s expanded issued capital has ballooned out to a whopping 1.6 billion shares, giving it a market capitalisation of about A$36.8 million.

The offer is not subject to any minimum acceptance condition. A bidder’s statement from CopperCo is expected to be sent out very soon and the company says it may acquire additional shares in Universal up to a 19.9 percent interest in the meantime.

This latest proposed deal, albeit smaller scale, once again underscores what a busy year of mining consolidation activity it has been in Australia, which has included LionOre Mining International and Oxiana’s (soon-to-be-stitched-up) friendly acquisitions of MPI Mines and Minotaur Resources respectively, as well as Xstrata’s hostile takeover bid for WMC Resources that's in progress and DRDGold’s unsuccessful tilt at 100 percent ownership of Emperor Mines.