Astron - ATR: A zircon player in Aus and China

[Damo79]

If I've got this right, threads started over 2 years ago haven't been carried over to the new forum...?

So I thought I'd start a new thread for Astron since I hold. If the old thread turns up, we'll just ignore this shall we.

So for anyone that hasn't heard of Astron (which is probably most people given the illiquidity of the stock), the are a zircon materials company that operates mostly in China, but is listed in Australia. They import zircon raw materials to their Chinese factories (which are of course low cost by world standards) and do various value adding things (it's complicated) to the zircon flour and sell numerous downstream products.

They have a strong revenue that is roughly equal to their market cap at the moment which has been growing continously for many years. Their NTA are also pretty close to market cap. NPAT was growing strongly but stalled a little over the last year. However, they have quite a large capacity expansion coming online for high value fused zirconia products that is expected to increase revenue and profit in the near future.

They are also developing the Donald Mineral Sands mine in Aus, which, if it gets up and running (i think they're a year or two away from that) will make them a vertically integrated zircon producer/supplier.

They have paid a divident of 10c for the last two years, expect NPAT to be around $20 million, and at the current price of $2.35, that gives them a market cap of $140 mil and P/E of about 7.

Anyway, only wanted to find this thread to point out that there were 270k shares traded today. Now that isn't a lot by any standard, but as I pointed out before, the biggest problem with this company is liquidity (i think the top 20 shareholders own something like 80% of the company), and that's the most shares traded in a day in over 2 years! Also, they've had a couple of dodgy disclosure issues in the past, so though something might be up.

Cheers

Damo

[thereslifeafter87]

Where do you get NPAT of $20 Mill from?

The latest guidance (released in November) was for $18mill.

[Damo79]

Was writing from memory TLA87. I stand corrected :)

[thereslifeafter87]

Sweet :-)

They haven't announced a change to that guidance, so here's hoping they hit it. Looking very cheap if they do.

[Damo79]

Yup, definately hope so. I put the money I made from selling half my shares in ADY into Astron, making it my single biggest holding right now.

Wonder what happened concerning that possible 'transaction' (takeover?) mentioned a few months back?

[stephen]

Whoah! See this morning's announcement?

Surprised the bid is still only $2.50...

[thereslifeafter87]

Whoah! See this morning's announcement?

Surprised the bid is still only $2.50...


Why would you post that before open?

Retard.

[clearasmud]

Well sellers are currently cleaned out.
Look to me that the shares are worth something north of $4.50.

[thereslifeafter87]

After the sale they will have $3.85 a share in cash backing.

I would say it is worth anywhere between $3.60 and $4.50 depending on the value the market gives to the Donald project and the earnout component of the purchase price (could be worth another $50mill cash), less the capital costs of establishing the mining operations and the titanium processing plant.

[OneUp]

Amazing stuff.

Well done to the patient shareholders who held on!

[stephen]

"Retard"

Geez, that's a bit harsh.

[Damo79]

Ahem... Firstly - Woohoo! :)
Have increased my holding twice in the last 3 weeks. Something (blind luck perhaps) told me something could be up.
I wonder what this'll trade up to today. Given the cash position will be $3.85 a share, and that they still have a substantial busines in the the DMS and Gambia, I'm surprised it didn't open up near $4. I think I'll hold until it gets up to about that level at the very least.
Well done holders!

[thereslifeafter87]

Damo,

Most of that cash is earmarked for investment in capital spending on Donald and the TiO2 venture, so there is likely to be a discount built in to the sp.

[thereslifeafter87]

"Retard"

Geez, that's a bit harsh.


I was annoyed at the time because my leading bid for 10k shares at 2.80 on open got overtaken by bids for 60k or so of shares 1 minuted before trading started.

[drworm]

One thing I'm not too sure about is how much tax they'd have to pay on the sale of the plants. And whether it's under Chinese or Australian corporate jurisdiction. Management should have made some sort of indication.

[stephen]

So the first rule of Sharetrader is - don't say anything until it's too late. I will curb my impulses in future.

[thereslifeafter87]

One thing I'm not too sure about is how much tax they'd have to pay on the sale of the plants. And whether it's under Chinese or Australian corporate jurisdiction. Management should have made some sort of indication.

Good point.

They are Chinese companies that are being sold so no Australian CGT should be payable. The question would be whether there is capital gains tax on the sale of chinese shares...

[thereslifeafter87]

thought you may enjoy this read TILA87

http://www.asx.com.au/asxpdf/20070823/pdf/314416w8wf4l9x.pdf

Thanks, that was interesting.

ATR's report out today shows that we are lucky a sale agreement has been entered into.

It is difficult to understand why a revised forecast was not issued to the market. Surely they would have known that the company was going to miss its forecast by 20% !!!

[OneUp]

TLA

From memory you picked somewhere around $14m NPAT a long while back? That's been pretty accurate.

And I replied that if so I thought ATR was heading to $1.50.

I think if not for the sale agreement ATR might be trading at those levels today (where my buy order would be lurking!).

The missed profit forecast raises the question of how much you can trust this management team with large amounts of cash.

[clearasmud]

I think that as this management created the wealth in the first place they could be trusted in the future.

Clearasmud

[thereslifeafter87]

TLA

From memory you picked somewhere around $14m NPAT a long while back? That's been pretty accurate.

And I replied that if so I thought ATR was heading to $1.50.

I think if not for the sale agreement ATR might be trading at those levels today (where my buy order would be lurking!).

The missed profit forecast raises the question of how much you can trust this management team with large amounts of cash.

Yeah, It looks like the second half was an improvement over the first half as from memory some writebacks contributed to 1st half profit. Next year should see a large improvement in profit for the business as the effects of the massive increase in inventories (zircon stockpiles bought from MAL and CNM at discounted prices) are felt, although in the short term this has led to a large cash outflow.

I haven't really looked at the accounts too closely as they are pretty much irrelevant regarding the future of the stock due to the sale (except to the extent of the EBITDA earnout portion of the purchase price).

Management should be able to succeed in starting a new business again, but that's too much risk for me. Maybe I'll have another look in a few years.

I still think the factors impacting the business are largely short term - a result of ATR not having/wanting access to cheap Indonesian zircon due to its supply agreements elsewhere. Also, because those supplies have resulted in the zircon sand market in China being oversupplied.

When I first invested in ATR I did not fully appreciate how much money ATR made from merely importing raw zircon sand, and distributing it. The profits in 2004 and 2005 largely resulted from ATR buying cheap zircon concentrates from The Gambia, processing them, and selling the sand into the Chinese market. The high margins of those years were the result of those cheaper imports than buying sand direct from the miner/processors.

The following years were a return to normal (no more cheap concentrates from The Gambian gold mine tailings dump), plus the impact of other Chinese companies following ATR's lead and getting their own cheap tailings dump zircon from Indonesia. As a result ATR's margins suffered more pressure.

I think with new supply agreements with MAL and CNM, ATR's Chinese businesses' margins should improve next year, and with organic growth in revenues should deliver better profits.

The supply agreements haven't really had the opportunity to take effect yet, but should be felt next year.

[weasel]

Astron have a habit of waiting till the last day to post their financial results. This time it's 4 days overdue now... what's going on?... presumably the auditors are not happy about something.

[Damo79]

You're not kidding. It's a bit poor I think. What would happen if someone had desperately needed to sell their Astron shares in the last week to cover a purchase or something like that I wonder...

[bear]

You're not kidding. It's a bit poor I think. What would happen if someone had desperately needed to sell their Astron shares in the last week to cover a purchase or something like that I wonder...

one of the reasons i sold out of this potentially great company were management based and current situation repeatedly occurs time and time again.

If management are not up to it eventually the company will fail and while not pre-empting this ones fate the management are not working for the shareholders as they should be.

Bear

[winner69]

.... at least they apologise the shareholders for the delay .... good stuff eh

[Damo79]

Well the final accounts are now 10 days overdue, meaning 10 days of suspended trading!!! Has anyone seen this happen before?

[soulman]

Yes, it has happened before but usually for minnows that are reporting net losses. ATR are probably going to report profits so this is unusual. You can't really blame lack of time to audit. And rushing to complete this current result would be a negative. I feel for ATR holders but I wouldn't be suprise when ATR do report, their SP will not differentiate much either way.

[clearasmud]

Remember they are receiving $3.80 a share for the non mining business.
Almost in the bag right?
Clearasmud

[weasel]

They announce they are getting 3.80 a share for the non mining business. Then the next week they announce their profit is less than they had indicated it would be to the market (and to the buyer maybe!?). Now the auditor sees something fishy in the books, perhaps insider trading (which has happended before with this company), and the buyer has every reason to be allowed to pull out. (??)

[soulman]

Wow, this is a delay. A rejection to buy their non-core business would be a price moving news. Since, there was one rejection to a purchase last week on a coy asset due to the increasing AUD (a small iron-ore coy I think), then this could be the same. Foreign currency issues could be the key.

[Damo79]

Wow, this is a delay. A rejection to buy their non-core business would be a price moving news. Since, there was one rejection to a purchase last week on a coy asset due to the increasing AUD (a small iron-ore coy I think), then this could be the same. Foreign currency issues could be the key.

I don't think that should be an issue since the purchase price is in Chinese RMB. The only downside is that it's less for us at this end as the AUD$ goes up.

[weasel]

Hi ATR'ers
Has anyone emailed ALex Brown about what the f**k is going on with this co?

[soulman]

Are you holding this Weasel? I would just assume what an incompetent management this is. When this stock does get re-instated, it could well be $1.50 or less. People will be selling because I just can't see any reason for such a delay in reporting. Maybe unless they are just doing their accounting right now instead of doing them day to day.

Shareholders will want to sell down as quickly as possible because they don't want to hang their hat on a company that can't even report on time and if they do, always at the last minute. Hence, ATR has been saving quite a lot of dough on accountant and auditor.

Not a shareholder in this company but I find this very strange indeed. I feel for all current shareholders that can trade ATR and a nervous wait when the report do come out.

[Damo79]

Hi ATR'ers
Has anyone emailed ALex Brown about what the f**k is going on with this co?

No, but I'm going to now. This is ridiculous!!! I was holding mainly because I expected the gap between the share price and the $3.85 cash per share value would close somewhat. But at the moment, I'd just be happy to have my money back.

Edit: Ok, have asked. Will let you know if I get a reply :/

[weasel]

Hi guys, yes I hold ATR. Should have sold when the 3.85 was announced, but as you say, 3.85 seemed to good to be true... maybe it was. Thanks for emailing Alex, Damo.

[soulman]

Damo, if you don't get a reply within 48 hrs, I would assume Alex Brown has left the country living in Ethiopia, hiding from the ASX regulators. The head office has shut and no secretary to answer your question. Alex Brown has substantial holding in the coy, doesn't he. So, he want the company to be successful, doesn't he and then he go and do something like this. Can't they just copy last years report and change a few things.

Either way, ATR has all but ruin it's image as a listed coy.

[herbert240]

This is a bit worrying....was wondering if Dimebag or Cantab have a view?

[clearasmud]

i,m not worried.
we should still get our $3.80.

[Dimebag]

I think its fair to say that overall Astron has been nothing short of a huge disappointment to shareholders over the past three years. I've personally learnt a few valuable lessons about 'falling in love' with a stock with this one, and letting your past success with a stock colour your views about the future. You can't ever take a stock's success for granted, or let the kindness the stock has shown you in the past numb the critical faculties. Overall ATR has been a big success for me but over the past three years its been a significant drag on my portfolio's performance in an unbelievable bull market.

I still have a reasonable size shareholding at the moment (about 10% of the portfolio) but have been progressively reducing for some time, and will look to continue to do so. Management quality is a real issue for me, evidenced again with the inordinate delay in getting the annual report together. While it is sort of understandable that ATR was tied up with the sale process etc, a delay of this magnitude is unprofessional in my view, and irritating for shareholders who have their holdings locked up with the trading suspension in a bull market offering significant opportunities elsewhere.

During the past two years ATR have produced a glossy annual report with a lot of detail, and they seem to be using it as its primary vehicle for shareholder communication, so it is possible that parts of it are being re-written and/or were on hold until the outcome of the sales process was confirmed. And I think it is unlikely a hold-up with the auditing process is the main cause of the delay. Still, I find a delay of this magnitude unacceptable.

I'm with Clearsmud in that I don't think there is much downside from $2.80ish. The $3.80 in disposal proceeds is not going away (although A$ strength will have wiped a little bit off this), and the stock is already trading at a pretty significant discount to cash backing. Still, I do think a pretty significant discount is warranted, given the lack of visibility on the potential for the Donald and titantium projects, to which all of the cash will be committed. Clearly they are very confident in the prospects for these operations to have proceeded with the sales process, but there is a long way to go before the market will be convinced that they should pay book value for them.

The Donald project is potentially still quite a large and lucrative project, but the project is well behind schedule and has run into some technical issues with water procurement and the associated infrastructure. The ESS is still well behind schedule. And in the meantime, mining costs have gone through the roof (making anything close to the original capex estimate of $125m seem unlikely) and the zircon market is progressively becoming better balanced and zircon price strength is dissipating and could reverse.

The titanium project is the wildcard. Clearly they have spent a lot of time on engineering designs etc, but ATR have no experience in this area and there is absolutely no information about the prospects for this project. Hopefully the annual report and/or the appraisal reports that are being prepared will offer some further insight.

In the meantime, $2.80 is probably about a fair price. Unless there is some pretty clear and upbeat communications about the potential for these projects, I would bet that there is a high likelihood that the stock will continue to perform poorly. ATR has basically transformed itself from a stock with a growing, profitable operating business into a well capitalised company with a couple of big, speculative, and long lead time development projects, that will take several years to contribute any earnings. Barring any upbeat commentary I'll probably look to continue lightening in the near future.

Cheers,
Dimebag

[herbert240]

Thanks Dimebag for your excellent observations/appraisal...much appreciated

[soulman]

Any news on the e-mail and telephone calls? It seems to be dragging on forever. I feel for all you shareholders and just hope none of the coy I have does this immoral and unethical act.

[Damo79]

Any news on the e-mail and telephone calls? It seems to be dragging on forever. I feel for all you shareholders and just hope none of the coy I have does this immoral and unethical act.

My email seems to have been duly ignored I'm afraid. I'm amazed there's been no further announcement. Surely people with a much greater interest than my $5k's worth must be kicking up a fuss...

[Damo79]

Hmmmm... anouncement out. Very worrying! Could see a big drop in share price I think :-(

Summary: Annual accounts have been released along with a number of excuses. New accounting system etc etc. And the reported NPAT is now about $11m rather than the $14m reported in the appendix 4E. And... this has resulted in a condition for the sale to Imerys NOT being met. And I'll point out that the sale being conditional on a net profit amount was NOT released to the market.

This is dodgy!!! I'm p!ssed!

What can ya do :(

[thereslifeafter87]

Add on to that the fact that there was no disclosure from the company that it would not be achieving the $18million profit guidance and you have one big giant mess.

[Damo79]

Hehe, I've changed my mind about wanting the suspension to be lifted. I'm now quiet happy for ATR to remain suspended, because then I can at least pretend that my shares are worth $2.85 still :p

[Damo79]

Hate to keep replying to myself, but I've just been trying to work out how bad this could be.

The announcement says that the sale to Imerys of their chinese operations (which as far as I'm concerned would prop up the SP) was conditional on a EBITDA of 130m RMB. I make that about AU$18.9m, so am trying to work out how close ATR are, but the financial report is a little beyond me. The best I can find is the that NPBT is AU$13.9m, with the interest portion neglible ($130k). As for amortisation, well the "finance costs" are $1.2m, so at best if you add that all back (???) you get about AU$15m.

Any help from someone who's good with reports...

Sounds like the Imerys sale will be "re-negotiated" based on the worse result. If i can get out at anything around the current SP I will I think...

This really looks like the directors were caught out by auditors while trying to fudge up there accounts to reach a set EBITDA amount for the purpose of the sale.

[Damo79]

Ok, found it in the report. EBITDA of AU$17.2m so about 10% below the condition for the sale.

[weasel]

Hi Damo,

thanks for all your comments. Agree with you that it looks like they got caught out by the Auditors. Not really surprised.... very dodgy management this co. See what happens tomorrow..............

[ead83]

Hi guys,

I'm not really sure where you get your conditional EBITDA figure for the deal. I've read through the announcements and can't find any indication of the deal hinging on the EBITDA figure for ATR's operations.

Would appreciate anyone pointing me in the right direction

[Damo79]

Hi guys,

I'm not really sure where you get your conditional EBITDA figure for the deal. I've read through the announcements and can't find any indication of the deal hinging on the EBITDA figure for ATR's operations.

Would appreciate anyone pointing me in the right direction

Hi ead83

From this announcement:

http://www.asx.com.au/asxpdf/20071030/pdf/315gf5cvqt828g.pdf

Implications for Imerys sale transaction of the amended profit result
a. The share sale agreement entered into between Imerys and Astron contains a
condition precedent to the completion of the transaction that for the year ended 30th
June 2007 the Earnings Before Interest, Tax, Depreciation and Amortization
(“EBITDA”) of the Astron businesses that are the subject of the sale to Imerys be no
less than Rmb 130 million.

Cheers

[drworm]

Damo79, the EBITDA figure you took - is that the figure for the entire Astron business or just the Chinese manufacturing component. If it is the entire business, the component for the manufacturing business is probably higher than this due to the exploration and corporate costs the parent business has to endure. Perhaps you can get some hints if they mention exploration costs somewhere. I think the sale would logically hang on the performance of the manufacturing business.

Don't own any myself but once did and lost money. Disclosure is appalling with this company.

[Damo79]

Good point drworm.

You're probably right that the EBITDA for the businesses for sale would be a bit higher. However, they do go on to say in that announcement that they haven't met the condition, so I guess that's the important issue.

However, dissapointingly I just jumped ship at $2.60 (my average buy price was $2.63, so i wasn't too burnt). There was (is) so much potential for this company, but I just can't trust the management. Such a shame as I've held this for a while, and was planning to hold long term. The last month was the last straw however.

Good luck anyone continuing to hold.

[ead83]

Thanks for that Damo. If thats the case, the deal may be dead in the water. 130 milllion RMB is equal to around AUD$19 million, so they're a fair way short either way.

Might be a good one to pick up under $2 just for the 20c dividend!

[soulman]

Yes, management has all but ruined it's reputation. Whatever the profit result, ATR cannot be trusted anymore. Suprise to see $2.60. I though low $2's. It seems there are some buyers who believe the best are yet to come, where they should be selling and breath a sigh of relieve.

[weasel]

Thanks for that Damo. If thats the case, the deal may be dead in the water. 130 milllion RMB is equal to around AUD$19 million, so they're a fair way short either way.

Might be a good one to pick up under $2 just for the 20c dividend!

Well it is approaching the two dollar mark - sellers at 2.39. chance for a juicy dividend if anyone can trust these turkeys!

[The Big Ease]

the previous thread on this stock was perhaps one of the best discussions on any stock i have read anywhere. it brought the best out of everyone as this stock really challenged those with different investment preferences.

in the end, i think the argument has been had on this one and the verdict is in. the management had a 2 year period of market momentum, which increased their SP by 10+ fold. what did they do with this vote of confidence? exactly.

it may well be that management are right and the market is wrong. but they given us very little to hold onto. if all you have left on the positive ledger is the yield, youve got to ask yourself why? on the other hand, if you believe theyre good managers with the right strategy, good luck!

i remember a member on this board once said something to the effect of "with a once in a generation mining boom happening all around you, is this where you want to allocate your money in the resources industry?"

answer: probably not.

[weasel]

Well I've had a look at the announcements, and a quick calculation says that the previous value of $3.80 per share, is now somewhere between $2.97 and $3.24 a share, depending on how much DRP, and this might still be "less completion adjustments".
wease

[Damo79]

Not sure if i've got this wrong, but didn't ATR just go ex-dividend (20c). And yet it actually opened a few cents higher. Must still be some people out there who haven't been scared off by the dodgy management.

[soulman]

Don't know about you holders but ATR goes ex-div 20 cents 26th Nov. I think Weasel got it wrong when he said sellers at $2.39 and time for a juicy dividend. It drop 15 cents that day but did open up 1 cents on low volume of course.

It is surprising to see people still in this. The AGM must be positive then.

[weasel]

Don't know about you holders but ATR goes ex-div 20 cents 26th Nov. I think Weasel got it wrong when he said sellers at $2.39 and time for a juicy dividend. It drop 15 cents that day but did open up 1 cents on low volume of course.

It is surprising to see people still in this. The AGM must be positive then.

Yes, weasel got it very wrong cause he forgot that the ex-dividend date is 4 days before the record date. I hope no one bought expecting the div. If they did, I am sorry.

[pijo]

I see the Astron share price has dropped by a dollar from the peak it hit when the sale of its zirconium chemicals business was announced. Following this drop of a third, the share price is now lower than before the sale was announced. Is this a sign that there are problems with the Imerys sale?

The sale had to be re-negotiated when the EBITDA was found to have been wrongly stated by Astron. Have Imerys found another problem? I am hearing rumours that there are problems with stock.

Today is the day of the EGM to approve the sale. There is no doubt that the EGM will approve the sale as Astron Managing Director Alex Brown owns a majority of the shares. But will it be approved by Imerys? I trust Mr Brown will give an explanation to the meeting as to the poor performance of the share price and if the poor performance is caused by problems raised by the due diligence process.

[alexroseinnes]

From the EGM this am - money expected in the bank around the 25th of this month. Over $3.00 per share!

[weasel]

From the EGM this am - money expected in the bank around the 25th of this month. Over $3.00 per share!

But the shareholders will not get one cent, and will rely on this company's management using it prudently. Not convinced based on their recent track record.

Also see that mining in Gambia has been suspended - could be a technicality, but still not good news.

Wease

[pijo]

From the EGM this am - money expected in the bank around the 25th of this month. Over $3.00 per share!

I am a fairly simple sort of person and I am not afraid of asking dumb questions.

If over $3.00 per share is going into the company on Jan 25 why is the current share price $2.15. Does that mean the companies residual activities will have a negative value of about -$1.00

[alexroseinnes]

Good question, and the answer as to why the sp is low is because they sold their cash generating assets. They are now like an IPO with money. Have to prove that they can make cash going forward and will invest the millions prudently.

[pijo]

Metal Pages is a well respected internet subscription magazine. On January 31 it carried the following story.


Astron to invest in Liaoning for Ti & Zr plant
BEIJING 31-Jan-08. Australian zirconium chemical and rare earth producer Astron will invest $1 billion to build a major plant for titanium and zirconium products in China's Liaoning province.
The plant, which is located in the Coastal Industrial Base of Yingkou, Liaoning province, is designed to produce 400,000 tpy of titanium dioxide, 60,000 tpy of zirconium oxychloride, 10,000 tpy of titanium alloys, and 10,000 tpy of zirconium metal.
The first phase of the project, with $120 million of investment, is expected to come on stream by the end of 2009.
Astron was established in Australia in 1984 and has set up several subsidiaries in China's Liaoning and Shandong province.


Astron has just sold its Zirconium Chemicals business of which zirconium oxychloride is an important part to Imerys for A$ 194 million.

As part of the Imerys deal for the next two years Managing Director Alex Brown is supposed work 50% of his time for Imerys and his wife and Executive Director is supposed to work for Imerys 100% of her time

This leads to the following Questions

1) Are Imerys happy that having bought Brown’s zirconium chemicals business he is setting himself up manufacturing a major zirconium chemical.

2) How can he and his wife develop a major zirconium chemicals facility while at the same time work for what will be a competitor, Imerys on their zirconium chemicals.

3) Investing US 1 billion is extremely price sensitive information but Brown has not announced it to the stock market. He does appear to have announced it to the press though. Will the authorities take action over what appears to be a serious breach of its listing rules.

He did have the perfect opportunity to make the announcement. On the date of the report in Metal Pages he published a "quarterly activities report" classed as "price sensitive" on the stock market. This report made no mention whatever of his proposed investment.

Pijo

[pijo]

I am amazed. Astron put out an announcement on Feb 15 that

“Carnegie Minerals has advised Astron that they have received notification from the Government of the Republic of Gambia of the cancellation of the licence to mine heavy mineral sands in the Gambia

Negotiations are still underway with the government in Gambia to resolve outstanding issues aand resume the mining operations.”

Today the Sunday Feb 17 the Sunday Telegraph in London published a report saying.

The Gambian government has alleged that Carnegie minerals have been smuggling Uranium and Silicon out of Gambia. All Carnegie staff have been withdrawn. A Carnegie employee flew back in to negotiate and was promptly thrown in jail.

So it looks like Carnegie are not running their plant and relations with the government are such that it is unlikely to open in the future. I cannot see anyone from Carnegie going to Gambia to sort out the situation if they are likely to been thrown into jail the moment they lsnd

I do think that Astron should have advised us of this situation

Pijo

[cantab]

Goldman Sachs to buy 5.5m shares on market, could take a long time at this rate!

Not too many companies doing buybacks - are there any others? CBA cancelled theirs with $400m remaining.

[pijo]

I do not understand the logic behind the buy back. The directors control 76% of the shares. Are they going to sell their shares? There is no sign of them doing so. If the buy back only buys back the shares the directors do not hold, then as Cantab says it will take a long time. At least several years. If they achieve it the directors will control 84% of the shares. Which is virtually taking it private and using the shareholders money to do so! It is not that long ago that Brown was complaining about the lack of liquidity in the shares. The buy back will make liquidity much worse.

The only logic I can see to this deal is that the share price cannot fall. Every time there is a seller the company steps in and buys the shares. With the finance to buy 5.5 million shares the company is unlikely to run out of money. There was me thinking share support operations are illegal especially as Brown’s son has a conviction for manipulating the share price. Now Brown himself seems to have found a legal way of doing it.

[cantab]

A lot of companies would love to be in Astron's position of strength - $200m or thereabouts in the bank and undertaking a share buyback for 10% of the shares which at $2.00 will only cost $11m. Even if they don't get them all or it takes a while, every share that Astron snaffle at a low price will increase the NTA and EPS of the remaining shares. The directors of Astron should be congratulated on getting the company into such a strong postion.

Is Astron perhaps the only company on the ASX undertaking a share buyback at the present time?

[lakeys]

ADA are doing active long term large buy back at bargin basement prices.
where main shareholders are directers, smart move when forward contracts are all in place for this company. Should be taken over one day for a masive premium?

[weasel]

Well the buy back doesn't seem to be going too swimmingly.. share price is sliding away. Anyone have any thoughts on this company's direction?

[lakeys]

atr or ada?

[weasel]

astron..atr

[herbert240]

It would seem that the market was less than impressed by the profit guidance and business outlook released on July 14!!

[The Big Ease]

anyone still following this one?

[lakeys]

Yea, the buy back has been good

[herbert240]

Yes, still hanging in there waiting for something to happen....but when?!

[Damo79]

Wow! I surprise myself, over 2 and half years since my last post on this thread and I still hold. I hope this is an indication that I am finally becoming a patient investor rather than an impatient speculator :)

Believe it or not, I've actually increased my holding a couple of times, and once again ATR is my biggest investment. During the whole GFC, I shifted money into ATR as a defensive play due to it's cash backing. Of course I can't say it's paid off, although I think I'm about even based on the current price (ignoring inflation and 3 years of opportunity cost!).

Slow and boring as ATR is, I continue to view my holding comfortably (on the odd occasion when I think about it). Thought I'd check back in on the ol' ST to see if anyone had picked up on todays announcement. Some resource/reserve estimates are out that show some big numbers for recoverable valuable heavy metals at Donald. Does anybody out there know enough to do some math and put some dollar figures to the numbers?? The most important thing is that it's finally getting close to mining. The mining lease is advertised now and should be finalised in August. Of course there is still the Chinese based business that should be chugging along making a decent profit (based on the last report) as well.

At some point, this year, next or the year after, I'm convinced this will hit 5 bucks.

Patient and bored
Damo

[Damo79]

Update: Donald mineral sands license was granted today. Here's a post I put on the NTA thread, which should be copied on here -
Net asset value: 210 mil (327 cps)

- 166 mil cash (259 cps)
- receivables, inventory and investments of 4.5 mil (7 cps)
- total liabilities of 4.5 mil (7cps) of which only 1.6 mil are current

...so this leaves NTA of 259 using a very conservative definition of "tangible".

Then on the less tangible side:
- 10 mil land use rights (16 cps)
- 33 mil invested in the Donald Mineral Sands (DMS) project (52 cps)

... giving the total of 327 cps

Apart from the DMS project, they had revenue this year of 15 mil for a small profit of 1.2 mil and a positive cashflow of 3.5 mil.

Regarding the DMS project - mining license expected to be granted this month. From the feasibility study, the initial project area will generate 130 mil EBITDA, and the net present value of the DMS at a base case is 646 mil (compare this to the 33 mil on their balance sheet).

Current share price is 180, for a market capitalisation of 115 mil.

[Damo79]

Posting to myself here, but here goes. There was what I thought was a strange announcement made to the ASX yesterday concerning Astrons "share trading policy" - ie. concerning what constitutes insider trading. This was released on the day ATR has hit an 18 month high. A little suspicious I think, and am hoping to see some slightly leaky good announcement come out in the near future.

BTW, up 30% since my previous post, and still below cash backing. Given that this is very much the basket with all my eggs in, I'm pretty happy. If (when) funding is secured for the Donald mine, I should be happier still, and possibly driving a ferrari :)

[Bouncerdog]

Damo79

Just thought I'd let you know that someone is reading your posts. Thanks for your input.

I hold these boring old things and continue to ignore them as they steadily grow. Actually, they are performing a lot better than my "safe" investments in utility funds (CIF TSI)

Dull, but long term profitable....... hopefully.

[lakeys]

and yes i am not selling mine yet either

[Lizard]

They are on my experimental "net-net" portfolio (in the investment threads)...

[Damo79]

Noticed the Donald Mineral Sands newsletter from February today. A month old now, but I missed it until now. Found here: http://www.donaldmineralsands.com.au/

Definitive engineering study and plant design is completed, and the bankable feasibility study is due in April for "review by investors". I'm going to assume the BFS (assuming it's positive, and I have no reason to doubt this) will lead to a funding committment of some sort. Perhaps ATR will get some notice once they are actually financially committed to building the Donald mine, which should produce 130m p.a. EBITDA going by the last solid information I read.

Will try to add some at this price but am already pretty overloaded with ATR shares (and happy about it).

[ynot]

Only light volume but ATR is moving up.

[Damo79]

My guess would be that the recent prices achieved by iluka for their mineral sands products has spread some attention to ATRs donald project. I decreased my holding after they released the announcement that the POSCO MOU had run out, but still have a position in ATR sitting on a 68% profit. It's not as great a buy now as it was at the $2 level of course, but still potential to fly once the DMS funding is sorted out.

[ynot]

Not sure what if any effect but new CEO appointment. Alex Brown Deceased.

[wizAlvin]

only 30 + hours to get your 2020 picks in .... about ONE DAY

[ynot]

Held a few ATR for years.
Up from $0.20 to $0.50 this year.

[younga]

Got $1000 at 36 cents last month....wish I bought more. Cheap

[ynot]

Got $1000 at 36 cents last month....wish I bought more. Cheap
Talk on Hot Copper is predicting 10 bagger potential here but I take that with a grain of salt. Not an uncommon comment on HC small cap listings.
Income showing some good gains lately.
Also, from memory 94% of atr is held by top 20 holders.

[winner69]

Talk on Hot Copper is predicting 10 bagger potential here but I take that with a grain of salt. Not an uncommon comment on HC small cap listings.
Income showing some good gains lately.
Also, from memory 94% of atr is held by top 20 holders.

I have fond memories of when ATR was a 10 bagger (or close to it) earlier this century

History might be repeating itself

Hope so if you are having a punt

[ynot]

cheers Winner, yes I'm in. Been in the bottom draw for 10 years.

[herbert240]

Any takers for the Security Purchase Plan? Am interested in what other Astron shareholders are thinking.

[herbert240]

Any takers for the Security Purchase Plan? Am interested in what other Astron shareholders are thinking.

Ho hum...not much I guess.