Ivanhoe neighbours not fazed about being in the spotlightFrom...

Ivanhoe neighbours not fazed about being in the spotlight
From HighGrade.net by Michael Quinn, 18 August 2008

ROBERT Friedland with his new Australian scrip in hand and a smorgasbord of Australian companies suffering decimated share prices looks a recipe for M&A action. Two Cloncurry copper contenders stand out as possible target, though neither professes any great concern at the prospect.

Exco Resources and the controversial CuDeco are the two in question, with both holding advancing copper project’s not far up the road from Ivanhoe Australia’s large landholding in the region. Ivanhoe Australia is Exco’s major shareholder with a 19.99% stake, with the two also having an exploration joint venture covering ground contiguous with Ivanhoe’s existing projects around the Selwyn district south of Cloncurry. Exco is cashed up and busy adding to its resources near Xstrata’s depleting Ernest Henry operation, with a bankable feasibility study for a project yielding 25,000 tonnes per annum of copper in concentrate due to be completed early next year.

However, despite the advanced project, credible feasibility work and exploration results this month that the company indicated are among the most significant recorded to date, market traction in the current environment is proving difficult to achieve.

This week Exco appointed London-based Fox-Davies Capital as its “international capital markets advisor”, with a brief to increase interest in the budding copper miner currently capitalised at about $A75 million. Exco managing director Michael Anderson denied the company was concerned with Ivanhoe Australia’s emergence.

“It’s not a concern, we’ve always known that this was more than a possibility and rhetoric in the press suggests it’s not only a possibility but (Ivanhoe Australia’s) firm intention to use their scrip as currency,” Anderson told HighGrade. “Our only concern is the ratio that any bid gets struck at.

“We’re not concerned about getting involved [in takeover actions], everything is for sale at a price. But, looking at fundamentals we’re not alone in thinking we’re undervalued at the minute in this market. With the progress we’re making, with the money we’ve got in the bank and the news flow that lies ahead it’s up to us get that value back into the company.

“But if a (bid) process starts now chances are we could get taken out for what we’d all consider to be an opportunistic price. That’s our only concern.

“Because it’s where you start these processes that are perhaps the most definitive aspect of any deal. If a bid gets launched with your share price say at A30c, which we are today, somebody can kid you on that 45c is a 50% premium. But six months ago we were trading at 45c with a lot less information and a lot less substance about the company you could argue than we have now.”