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Same here, # 58405Y104 Plus, 49,899.16% or Ten cents ?
To answer the other part of your question,
You wrote,
“Also,why wouldn't BAJFF not sell their 49% at a decent price to a 3rd party instead of accepting a measly 10% and a loss of almost all of management's personal investments in the company?”
No buyers. BAJFF would have been glad to do so, and was their first choice.
Next up, 17 interested financial institutes to loan money, not interested.
Borrowing against a mine that (A) you do not own 100%. (B) is not operational, and (C) you just screwed up the best chance to finish the mine you’ll ever have. Is not conducive with selling or borrowing. KC was an exception because they had such deep pockets. If it was not for KC, this would of gone bankrupt months ago.
KC had the advantage over BAJFF and took them to the cleaners.
Business is business, if any of us was put in the position of accepting the majority of the risk and finance, we would expect to be well paid for our effort. (My opinion)
The KC wanted to increase the senior debt to include the cost overages. They would of gladly accepted the larger loan amount and reduced BAJFF position by the same.
However, I know that senior debt lenders (8 banks) are not considering loaning more money. Approximately $500,000,000.00 remains to be drawn against the senior loan. The banks are requiring that 100% of the funds needed to complete the mine be available before they release the remaining $500,000,000.00 So the KC will need to have the $300,000,000.00 (approx.) additional overrun funds in place prior to the banks releasing $500M. If for some unknown reason, the short-fall increases to an amount larger than calculated, BAJFF is required to fund their 10% of said short-fall. If they cannot fund their portion of short-fall, KC will and reduce BAJFF’s 10% ownership to whatever that remaining % would calculate to.
If BAJFF falls to less than 8% ownership, they lose their last seat on the board.
On this note, the original loan included the Bi-metal extraction be in production. As of my last call, the extraction plan was still required and will be operational.
BAJFF appears to be reduced to 14% of the original ownership. 70% ownership to 10% If additional funds were found, BAJFF could buy additional percentage of the mine. (prior message)
If your questions are not answered, I suggest you give BAJFF a call.
The answer is rather simple. The KC takes the debt along with the assets. The Koreans will assume 90% of the debt and BAJFF will end up with 10%.
There is a scenario where BAJFF retains up to 39% of the mine however, they must have the cash to pay the KC. BAJFF does not have any cash to speak of, nothing like the hundreds of millions of dollars required to retain a higher percent than 10%.
The current management is functioning as temporary management while turning over the operation to the Koreans. It would appear this current team will stay in control until the end of this year. Then new majority owners and downsize the controlling staff of BAJFF.
BAJFF will become a shell of its former self, reviewing ledgers intent on displaying the amount of income earned by the mine.
BAJFF will calculate their 10 % and pass the earnings to te shareholders.
Value, It seems to me you are being generous. 10% is the contractual position BAJFF will land at. BAJFF would need to pay the KC for every percentage point above 10%. This cost would amount to about $110,000,000 per additional 10%. BAJFF’s position would not support loans for additional percent purchases. The stock price would not support dilution to raise funds. This leaves BAJFF in a difficult position.
On the plus side , CEO Tom Ogryzlo, is brilliant and on the side of the common shareholder. His idea as of late is to convert BAJFF into a “Royalty Trust”.
This would guarantee shareholders that any “net” profit would be paid out to the shareholders.
Latest DD seem to indicate that 10% ownership would pay between $.04 and $.09 per year, per share. So if this was to come together, the stock is at a real bargain at this price. However, this all depends on the KC and continuing forward with Phase II. That is the last step for finance.
There has been several discussions about BAJFF.
My search of contracts show a position that may not be generally known.
The Korean Consortium (KC) have paid $90 million in the past weeks to continue Baja mine to move forward.
KC are also responsible for 30% of the senior debt, as of this DD the total drawn is $600,000,000.00 X 30% = $180,000,000.
The KC have the financial ability to complete the mine. So, if the mine was to fail, they would be more than capable to pay back their portion of the loans. ($180M
If the KC decides not to go forward with Phase II finance, all of the money invested to date in credited towards the $180M they would owe.
So to think that the Koreans are shuffling additional funds into the mine is simply not true.
As long as the project is still viable, I believe the project will go forward.
Source, conversations with CEO Tom Ogryzlo at 604-685-2323
Let’s review, .30 by the close of today, buyout by the end of today, and now funding by tomorrow. You’re a busy dreamer…
He does not, he wants you to think there is.
Man, are you right on the money.
I know this news was nothing, just the Sheepeople wanting this to be great news, when it has been telegraphed by the CEO for weeks.
Not the time yet.
Dan, I thought it was $4. You might be right.
Carl
Baja has experienced some cost overages. Let’s take a closer look at just one of these numbers, and what it might mean.
BAJFF is comprised of 70% ownership in the Baja mine. They have developed this mine and preparing to start production. Firstly, the Korean conglomerate is responsible for 30% of every dollar associated with bring this mine on line, and operation afterwards. This includes this $246 million dollar expense. BAJFF is required to secure the 70% that amounts to $173.2 million dollars. The Korean conglomerate is responsible for the 30%. Yes, a sizeable amount however, only 15.2 % of BAJFF’s cost to bring the mine on line.
Let’s assume for the moment, BAJFF secures additional financing at the same rate as the original loan program. BAJFF has projected the expected Price Per Share Earnings (PPSE) will be $.80 to $1.00 per share including debt service on the original loans. This was calculated at $4 per pound for copper.
The debt service on this new $178.2 M would amount to $.05 to $.08 reduction in the PPSE. Yes, a nickel for the debt service.
The stock sells off 60%,
Carl
jrg, thanks for your time and energy. Very good work.
3,724,700 shares trades on BAJ.TO this morning ? The trade was up in stock price.
I am trying to understand how this happens?
Thank you Pro, it was....
Kellett v. Baja, no winner yet...
Let’s take some time and look at the Kellett/Baja dilemma.
There has been considerable discussion, let’s have some more.
The majority of stockholders voted to keep Baja management by a narrow margin. Not because they think Baja Management is honest and doing everything right, No.
Most of the large holders are functioning around the premise, “better the devil you know, than one you don’t”.
Baja management is interested in producing the highest possible stock price, in turn, they themselves will become wealthy. Upper management holds a large number of shares, and are not wealthy men and women. Baja worth $ 10 -15 would make them so, and many of us along with them.
Kellett has invested 80 million dollars securing control over almost 20 % of the outstanding shares of Baja Mining. Then lost the last proxy vote by 1 percent !
Here is the way this car goes off the track.
Kellett finds another interested mining party of make an offer to buy out Baja at say $3 per share. Baja is required to pose this offer to the shareholders. Shareholders, including Kellett only need to convince 1 % to switch their vote and adopt the buyout for Kellett’s “new” buyout. After all, we all make $ 2 + in the deal, right !
Kellett now takes Baja private. Kellett with its worldwide system of Goldman web, finds a copper mining company,( if this has not already been done), and sells the “worlds 5 th largest copper mine” to a third party for its “ true value” of $ 10. Per share.
Kellett sells the deal, pays 3$ to us, and sells Baja for $10.
Now some might argue we all made $2 + for our trouble, this is true. But Kellett made $7 and has not taken any risk at all. Myself and others here, have spent years doing research and considering possibilities of this company. We do have large share amounts however, we worked hard for the shares and don’t want to see it taken away.
I expect to see $10 per share before this is over.
I personally believe that we will see a buyout offer prior to production. From the new buyer’s point of view, the sooner the better. The closer to production, the higher the offer must be to interest the stockholders.
Baja needs to get the price of Baja up around $ 4-5, to secure the company from a takeover.
In this particular shareholder climate, I believe the stockholders would except a $3 offer, only need one more percent to go over to Kellett’s side.
Carl
BAJFF starting to advertise....
I thought the 125k was only the first year, stockpiling now?
Thanks, Carl
I do not see how to distinguish shareholders rights from the “takeover” entity?
I am in favor 100%, just don't see how it works?
If Kellett purchased 19.9% of the company thru traditional stock transaction, they would be eligible for the stock offer as well. Very difficult to distinguish one stock holder from another, we purchased our shares, so did they.
If anyone could gain control over this company, with majority of the voting rights, they could offer more stock, accept a low bid from an outside buyer, change bi-laws to meet their own agenda. Very tricky pill for the courts to swallow, this poison one.
Kellett.
It appears that kellett has been buying stock, or better said, controlling a larger block than 10% without disclosing. Regulations require public disclosure of 10% or larger ownership. Kellett has disclosed 19.9 %. after the fact. “Gaining control without paying a premium” says to me, buying control at current stock prices does not represent “fair market value”. We have discussed “fair market value” and is important to recognize value. This is not a tactic to increase stock selling price, it for reasons like this, to know the value of BAJFF.
Hostile takeovers tend to buy shares on the open market until “control” over the company is obtained. Suppose a takeover company was to “offer” Baja Mining a price of $6.00 a share, for control of BAJFF, stock holders would vote, and may vote to sell at that price. This would be paying a “premium”, for the stock, a standard takeover.
BAJFF has an incentive for holding down the stock value, tax being just one. The problem with this practice, you invite a takeover. Stockholders knowledge of “fair market value”, for stock price, helps management maintain control over more shares. If we understand BAJFF’s value, we won’t sell our stock when copper price drops by $0.50, we will require buyers pay a premium. If BAJFF would start a campaign to show stock value more clearly, price would shoot up and there would be less opportunity for a takeover. Is truly a bitter/sweet decision.
If Kellett was to obtain control, their vote would have a great impact on BAJFF. Control is everything, and there are many ways for Kellett to transfer wealth from stockholders pocket, to their own. The “premium” could be paid to them, and them alone, for voting to sell.
The “upside” in this development is that someone is willing to try. Meaning, the value is seen by others, namely Kellett. Control is power, power in this case is money, just remember, it’s our money.
Regardless of the amount of stock you hold, VOTE. Call your broker and you will receive a “control” number. You can go on-line to proxyvote.com input your control number, and vote. The control number has the encrypted number of shares you hold, and your identification.
Carl
BAJFF Proxy contest, a must read.
http://bajamining.com/proxycontest
Dahlman lowered 2012 copper price forecasts from $4.75/lb to $4/lb, "and we are initiating a 2013 price estimate of $4.25." The analysts continue to believe that copper fundamentals remain strong as Chinese demand continues to be robust.
"We expect meaningful growth to continue in China, as well as other emerging nations, as electrical infrastructure buildouts continue amid the continuing trend towards increase urbanization," they predicted. "Importantly we believe the supply response will be slower than many anticipate. Both physical limitations, such as declining ore grades at existing mines, and structural limitations like work stoppages, increasing resource nationalization and taxation, a shortage of skilled labor, and other factors should continue to be supportive of prices."
http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=144201&sn=Detail&pid=67
The hedged collar, if in the form of an option, are selling for 0.50- 0.80 for copper, that would bring the breakeven cost from $3.00 on the low end to $4.50 on the high. Smooth move from BAJFF,
Ref. on post.
http://www.mineweb.com/mineweb/view/mineweb/en/page103118?oid=142456&sn=Detail&pid=102055
I corrected the numbers to 70% ownership, thanks Dan.
I looked at BAJFF copper production numbers for 2013.
BAJFF is expecting 125 million pounds of copper in production. (for 2013)
Rather than calculating the cost of Zinc, Cobalt and adding them to the mix, let’s just take the sales price and reduce the extraction cost of copper from the mine. Study shows the mining cost would be $-.29 (that is minus 29 cents.
Assuming the world estimate for copper price will be correct for 2012, I used the same for 2013, estimated at $3.50 USD
We can now add to the world price, the 29 cents. $3.50 + .29 = $3.79 per pound of copper.
$3.79 X 125,000,000 pounds of copper (for 2013) = 473,750,000
With a PE of 5 X $473,750,,000. = $2368,750,000 USD divided by, 338,800,000 outstanding shares in BAJFF = $6.99 US per share.
X .70 (amount of mine owned by BAJFF) = $4.89
To consider the sale of Manganese, I looked at the present value of 1 Billion US Dollars on today’s market. I used only 50% of the value and paid off all existing debt. This would change the PE ratio from a multiple of 5, to a multiple of 10. ( the range is actually 10 to 16)
Doing the same calculation as above, the share price of BAJFF arrives at $9.78 USD
Carl
Good point, is the remaining 30 % not in shares ?
I looked at BAJFF copper production numbers for 2013.
BAJFF is expecting 84 million pounds of copper in production for 23 years. (starting in 2013)
Rather than calculating the cost of Zinc, Cobalt and adding them to the mix, let’s just take the sales price and reduce the extraction cost of copper from the mine. Study shows the mining cost would be $-.29 (that is minus 29 cents.
Assuming the world estimate for copper price will be correct for 2012, I used the same for 2013, estimated at $3.50 USD
We can now add to the world price, the 29 cents. $3.50 + .29 = $3.79 per pound of copper.
$3.79 X 84,000,000 pounds of copper (annual BAJFF production) = $318,360,000
With a PE of 5 X $318,360,000. = $1,591,800,000 US divided by, 338,800,000 outstanding shares in BAJFF = $4.69 US per share.
To consider the sale of Manganese, I looked at the present value of 1 Billion US Dollars on today’s market. I used only 50% of the value and paid off all existing debt. This would change the PE ratio from a multiple of 5, to a multiple of 10. ( the range is actually 10 to 16)
Doing the same calculation as above, the share price of BAJFF arrives at $9.38 USD
Carl
Baja Mining eyes $1bn manganese upside at Boleo
http://www.mineweb.com/mineweb/view/mine...
I know many of you have read this however, use your calulator and imput some numbers to BAJFF production mining. Amazing dollar amounts.
Timothy,
I think your questions are exactly on target. The problem is that BAJFF is a “startup” company leaving us with no history to compare happenings of the past. The only way I felt comfortable, was to find other similar copper companies, then compare their history to BAJFF. Not the most comfortable comparison I have done. I will say first, I believe in BAJFF and find they have taken every turn correctly in building this company. Top managers and CEO, to using local labor for daily operations. Funding is of top notch banking institutions with the support of many Canadian and USA Funds purchasing positions.
When I look at the possibilities of any company I try and take the most conservative approach that is not laughable. When I looked at BAJFF for 2013 Q1, I looked at what I expect the fair market stock value should be. BAJFF seems to be flying so far under the radar that a share price of $.90 makes no sense. Most investors are very pleased to have an annual return in the 30% range. BAJFF will need to do 400- 600% to hit my conservative estimate.
You are correct in saying that other companies PE range in the 16-24 times. I would not be surprised if BAJFF went to $4-6 in the course of one week. BAJFF is listed on the Toronto Exchange, not the New York Ex. If it was on the NYE, I believe the climb in price would of already been completed, and we would be looking at what amount of annual return BAJFF is anticipating and when a dividend could be paid.
I have labored over this stock for years, and have found no reason why this is selling at such a cheap stock price. Some investors quote the amount of debt however, that is already calculated into the stock price. With BAJFF’s cost of copper production being less than zero, -.29 cents to be exact, and the original “break even” amount calculated at $1.25 a pound copper price, the payoff of debt will move quickly. With the geographical location, shipping to the USA market will be one of the lowest.
I purchased more BAJFF this past week, and will keep on buying it. It is by far my largest holding. I am considering flying to Vancouver for the meeting, just to see if more information would be forth coming?
Best of luck,
Carl
I would like to start a discussion on the anticipated value of BAJFF after 2013 Q1 results.
*BAJFF cost of copper per lb. is $.29- (other minerals mined will off set the cost to the negative number.)
*5 th largest copper mine in the world.
*Stock piling surface copper now to sell.
*Other mines comparable company’s used, HGZ11, CUN.TO, NCU.TO Seem to be trading at about 5 times earnings.
My largest holding is BAJFF, started accumulating in 2007. My estimate is $4.00 - $6.00
Clear "buy" signal on Thinkorswim today. Oversold and all the news is in line.
Have owned for the last two years and still buying when the price drops.
5th largest copper mine in the world. Should be fun.
Rivercol, disagree. Your comparison may be true however, the constant degrading of this stock is equally wrong. Posters here own millions of shares of this company, we did our DD and now feel wronged. Posting the obvious is not the solution either. I will never buy another stock that has taken away my voting rights as MCLN has. We are on this ship together, if MCLN is reading these posts, we are better advised to reinforce the good decisions they have made, and there are several. If you have complaints, send them to MCLN in an email. TX may be wrong, he may be right, we wait, we send our emails and we work to help this company.
Luna2,
Thanks for your DD, I first read the filing and thought of the 400,000,000 as a very bad sign. Guess I, and others, are used to being negative about MCLN.
Thanks for your thoughts. Very good.
I do have a lot of faith in this company. The men running this copany have received much criticism, for what I believe is an brilliant market approach to this business. I expect this company to arrive at a $30,000,000 market cap, and fill a needed business shortfall in today's market.
Trapped in this position, hardly. the problem is the same for most. We just don't know when the large contract will be signed. Tomorrow or next year? Technical's simply don't work with a business that operates at these levels. Any significant contract is a complete game changer. You buy a position, set your sell price, and wait. This is a very well thought out strategy for penetrating an extremely profitable business, IMO
I'm hoping that another scenario is the result of the run?
Someone wanted a rather large position, maybe 100,000,000 shares. They instructed their broker, paid the least possible on every transaction, bought what they wanted, now is waiting with the rest of us.
Why? most would think that they expect the price to increase and wanted to have a large position.
To think that several shareholders connected with the intention of illegally manipulating the price sounds a little far fetched.
MM, might be involved however, manipulation is illegal and to risk ones entire career for a few, or even several thousand dollars, not likely to me.
Discloser, 11,000,000 shares today
Wondering if this is a "odd time" for them to sell. The daily short sales must be reconciled each day. The MM must borrow/buy to cover? large holder, how many do we know? Daily. 50, 60 77 % sold short.
Yes, I have it. Better.
It may be that "amount" of time is allocated to "cover" ? With the speed available today, 11 pm might be the time designated "to be completed by", and 3 minutes is download time? JMG.
It's all early for me, living in Alaska, NY Market closes here at "noon", lots of time to examine evening data.
Thanks C.
RegSHO.com shows that MCLN has been “off” the naked short list for 53 consecutive days or more.
So that tells me that there if there are shorts, they are not having any problem finding shares to borrow. That also tells me that there is no eminent short squeeze conspiring.
http://regsho.com/tools/short_list.php?ssd=20100923
You must be right, I have not either?
That's a good reason...Thanks
I will look to be sure.
It would seem prudent to organize a shareholders group?
We could proxy our shares to an individual, (board) and have a "voice" at the annual meeting.
I would be willing to proxy my voting interest, if the majority here could find the right person?
Sure we could organize a sizeable block of voting shares?
I am sure you read it last Q when posted, Steven Hicks, Southridge.
mercurial has it, (yes I read last Q).
Have requested from Mr. L terms, waiting, has anyone seen anything?
Have you read "S D Financing" and "Hicks" ?