Maybe OZ Minerals will look to sell their stake - or take over BDR either way given there new model would think something will happen to the long held shares in BDR.
They just sold down & out of Sandfire Cu mine in WA but are saying they wish to grow by acquisitions expect will hear shortly if they are sellers or buyers of BDR as seems a large holding sitting on the books doing nothing since they bought in.
Cheers
Hot legs
Article from AFR streettalk I pay for the subscription
APRIL 21, 2015
ARTICLE 12 OF 12 OZ Minerals seeks growth beyond core
MICHAEL SMITH
It is back to the future for OZ Minerals which is throwing out the rule book when it comes to acquisitions and looks at growth outside its core copper operations.
New boss Andrew Cole, the first chief executive in decades (centuries?) to relocate a company from Melbourne to Adelaide, will not rule out buying new gold and base metals assets as part of his strategy unveiled Monday.
This would hark back to the company's former incarnation when Oxiana and Zinifex merged in 2008 as a "diversified base and precious metals mining company" that became known as OZ Minerals.
But the company had to sell most of its assets, except for the Prominent Hill copper and gold mine in South Australia, to China Minmetals a year later. That was part of alife-saving recapitalisation which saw a change in strategy to focus on copper.
But Cole is now signalling that thinking will change as he scours the globe for other assets which might complement copper.
He has removed the caveats that targets must be primarily copper and have the capability to produce at least 50,000 tonnes per annum. While it is unlikely he will go after iron ore assets, nothing else appears to be off limits as long as they are good value.
But there is a sense of deja vu as OZ Minerals prepares to go shopping again. Cole's predecessor Terry Burgess had around $1 billion to spend when he took the helm in 2009. That has now dwindled down to a fifth of that amount and there is little to show for it.
With a cash balance of $219 million but no debt on Dec. 31, the company has less firepower this time round. By removing the 50,000 per tonne limit, it seems logical that Cole will look at a range of smaller deals rather than anything transformational.
Geographical restrictions removed
Cole, who started in the top job in December, says he is also removing geographical restrictions on potential investments thatwill be based on value and risk. By releasing the country criteria, OZ Minerals is free to look at deals in riskier places like Africa.
"As far as I'm concerned, the globe is open to us. There are caveats. We are not going to put people at risk," he told investors on Monday. This type of risk includes things like its workers potentially being shot at. He says the company will also not go anywhere if it has to work unethically. Value will be primarily assessed on net present value (NPV).
Cole is seeking to twin this expansion strategy with a commitment to pay shareholders dividends if there is nothing around to buy. In other words, the company is promising to return net cash to shareholders, but only if it cannot find investment opportunities.
The idea is not to build a warchest, but there could also be years when shareholders do not receive a cash return if it is has enough solid activity. A new dividend policy, announced Monday, promises to return 20 per cent of net cash generation to shareholders. The caveat being that this does not include needs for acquisitions or to pay down future debt.
There are lessons for Cole around dividends from OZ Mineral's past performance. Burgess was generous with shareholder returns – paying out more than $1 billion in dividends, capital returns and a buyback – from 2009 to 2013.
The strategy announcement did not set the market on fire and does not resolve many of the problems Cole has inherited, such as planning for life after Prominent Hills is exhausted and finding an investor for Carrapateena.
OZMinerals shares fell 2 per cent in early trade but made up most of the losses to trade down around 1 cent at $3.90 by late afternoon. The stock is in better shape than the start of December when it touched a low of $2.99.
BDR Price at posting:
23.5¢ Sentiment: None Disclosure: Not Held
