Chariot Resources (CHD.to): Last minute nerves?

On May 31th, just ten days from now, the Special Meeting of Chariot Resources (CHD.to) shareholders takes place to approve the sale of the company to China Sci-Tech. The price of the sale is $0.67 per share and under normal circumstances of a buyout, the arbitrage between the open market price of the company to be taken over and the sale price closes as the big day approaches. Indeed, in recent weeks CHD.to stock has traded at a solid 65c, with 66c shown on occasion, too.

So why, all of a sudden, is CHD trading weak?

The current 63c provides a decent 6.35% arbitrage upside (pre-commish, of course) to the nominal 67c sale price to China Sci-Tech. It's kinda strange to see it go weak this late in the day, isn't it? What's that old one about brides and altars they use in the bizworld again.....?

Chariot Resources (CHD.to): the latest copper buyout

the five year chart

Here's the link, here's how the NR starts:

TORONTO, ONTARIO--(Marketwire - March 1, 2010) - Chariot Resources Limited (TSX:CHDNews; "Chariot") announced today that it has entered into an arrangement agreement (the "Arrangement Agreement") with China Sci-Tech Holdings Limited (HKSE:985) ("China Sci-Tech") pursuant to which China Sci-Tech has agreed to acquire through an indirect, wholly owned subsidiary, by way of a court-approved plan of arrangement (the "Arrangement"), all of the issued and outstanding common shares of Chariot at a price of $0.67 in cash per common share (the "Consideration").
continues here

So much for my thoughts in IKN43 about this one possibly dragging on (but I did get the buyer nationality right....that was easy, though). The announcement also coincides with the first day of activity of the new Free Trade Agreement between Peru and China....nothing like a bit of symbolism, is there?

The deal values CHD.to at a touch under $245m mkt cap. Lukas Lundin will be glad to see the back of this one.

Chariot (CHD.to): Trying to tell us something, Lukas?

B-b-b-b-but, wasn't this the same guy that said Chariot was cheap at these prices? If it's cheap why sell it? I just don't understand........ :-)

Chariot Resources Limited (CHD)						As of September 8th, 2009
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
Sep 08/09	Sep 04/09	Lundin, Lukas Henrik	Direct Ownership	Common Shares	10 - Disposition in the public market	-500,000	$0.370

Only another 50m or so to dump, Lukas.........

Chariot Resources (CHD.to): Lukas's bathtime

Splat!

The Lundin dissident slate was today rejected and the current board keeps its jobs. Here's Reuters:

TORONTO, Sept 4 (Reuters) - Shareholders of Chariot Resources Ltd (CHD.TO) on Friday, reelected the incumbent board of directors, rejecting a slate nominated by Lundin Mining (LUN.TO) Chairman Lukas Lundin.

The shareholders also shot down a motion proposed by the dissident slate to adjourn the shareholder meeting.

Chariot had accused the Lundin nominees of attempting to seize control of Chariot without paying a control premium.

Speculation that Lundin Mining could try to acquire Chariot or its Mina Justa copper project in Peru has intensified since the proxy fight -- led by Lukas Lundin and Lundin Mining Director Brian Edgar -- was revealed last month.

Lundin Mining owns more than 18 percent of Chariot Resources.

Lundin Mining has stated that it does not plan to acquire Chariot Resources, or its key project in Peru. The company said it was not directly involved in the proxy fight led by its chairman to remove Chariot's board.

However, Lundin Chief Executive Phil Wright had said the company would support the alternative slate of directors.

At the beginning of the shareholder meeting, the dissident slate moved to adjourn the meeting, alleging that yada yada continues here

Chart of the day is....

...Chariot Resources, (CHD.to), three month chart.

The IKN Weekly bought this stock at 20c a few weeks ago and sold this week at $0.415. Yes we have 100%+ winners and yes we take profit without later regrets, but now things are getting political. We bought as a value play, looks like Lundin are doing so too...but on a much grander scale. Here's Mineweb with the story: the PPS could now go much higher:

Lundin Mining Chairman Lukas Lundin is heading a proxy battle for control of Chariot Resources (TSX: CHD) and has proposed a new board of directors-all of whom have ties to the Lundin group of companies.

At 18.3%, Toronto-based Lundin Mining is the largest shareholder of Chariot, which is developing the Mina Justa/Marcona copper deposit in Peru. Mina Justa could produce 2.38 billion pounds of copper, 16 million ounces of silver, plus a small amount of gold.

In a response aimed at Chariot shareholders, which was released early Friday morning, Chariot's Board of Directors called the action of the Lundin directors "an opportunistic attempt to steal control of your company through control of the board without paying a control premium to you for your shares."

However, Lukas Lundin and Brian Edgar, a director serving on both Lundin and Chariot boards, are calling on Chariot's shareholders to replace the current board, who they believe failed to progress Mina Justa/Marcona in Peru, "leading to a consistent undervaluation of Chariot by the market." CONTINUES HERE

Morning Mailbag: Apoquindo, Chariot and Doug Casey

"Well, call me crazy, but it is my philosophy that in
order to be successful one must project
an image of success at all times."
Buddy King, American Beauty (1999)

I haven't done one of these posts in a while, so as three worthy candidates have come my way in the last few hours here we go.

Apoquindo (AQM.v): After this post on Tuesday IKN received the following comment from the management at AQM.v yesterday via the comments section, so by way of 'right to reply' here it is in an open post so that more people see it. For the record I agree totally about Villarzú's integrity and his good standing in the copper industry. All I'm saying is that his price predictions on spot copper suck, the puff-piece interview with that copper-ignorant and backpocket-biased Andrew Mickey dude is way too suspect to be taken seriously and the IR company in the middle of the whole thing needs to take a long, hard look at how it's doing its job if it wants to build a worthy following instead of just court the fickle, popular vote. I mean, check the share price action:
So here's the reply from AQM.v. Fair dos to Ms. Ashton, she defends the company corner well.

I want to defend Juan Villarzu as a person with great integrity. You may disagree with his views, but they are genuinely held. I am a director of Apoquindo Minerals, Stephanie Ashton, and the title King of Copper was not made by Mr. Villarzu, he would not call himself that. Basically, to further explain his view, Mr. Villarzu believes that the current crisis is fundamentally a crisis in confidence, and that regaining confidence could change the economic situation very rapidly. He also says that the current crisis differs from other crisis in history, since never before has there been such a massive, concerted and rapid response by governments and central banks worldwide, and this will cause the recovery to be quicker. He believes in copper growth in China, and that alone will mean enough demand for copper, along with production cutbacks, that will result in a higher copper price. Yes Kin Communications is the IR company for Apoquindo, and I do not see what is the problem with the IR company doing its job. Most people disagree with Juan Villarzu´s opinion, as evidenced by the Cru conference presentations currently occurring in Santiago, but he is not alone in view, and it is genuinely held. He is a believer in the metal, as we all are here at Apoquindo.

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Chariot Resources (CHD.to): CHD.to has been a pain in the side of Tom Meyer, analyst at Raymond James, as he rode his pick down through 2008. However Meyer deserves credit for sticking to his guns (though lowering his prices target by an order of magnitude) because 1) Meyer is very good at working the numbers and seeing underlying value and 2) copper has been coming back some and there is light at the end of this tunnel. So with that context, here's Meyer's latest update on the company, out this morning.

Chariot Resources Ltd. CHD-TSX
8th Delay in the Feasibility Study - The End Must Be Near
Tom Meyer, CFA, P.Eng

RATING STRONG BUY 1
Target Price (6-12 mths) (C$) 0.50
Closing Price (C$) 0.24
Total Return to Target 108%

Event
Chariot announced, before market open on Mar-31-09, yet another delay in the release of the feasibility study on its 70%-owned Mina Justa Cu project in Peru. The study is now planned to be released on or before Apr-23-09 (prev. 1Q09).

Action
We reiterate our STRONG BUY rating and are increasing our target to C$0.50 (prev. C$0.40). In anticipation of the "almost done" feasibility study and our view of possible M&A activity as the miner's balance sheets improve with the rebound in commodity prices, we have increased our target P/NAV multiple to 0.30x (prev. 0.20x). This increase more than offsets our model adjustments to account for the added delay and capex and opex uncertainty (we biased our numbers slightly higher). All told, we have reduced our NAV estimate to C$1.65 (prev. C$1.81).

Analysis
- Capex/Opex uncertainty. Similar to the explanation given for the previous delay, management indicated that it is currently in the process of estimating the most up-to-date capital and operating costs. We estimate an initial capital cost of US$490 mln and a life of mine average operating cost of US$0.77/lb [opex includes sulphide flotation mill (additional capex of US$135 mln) starting in year 3 of project life].

- Mine planning parameters. According to management, the feasibility study envisions processing 12 million tonnes per year with an average grade of 0.58% Cu through the vat leach plant to produce up to ~60,000 tonnes per year of cathode and processing 5 million tonnes per year with an average grade of 1.25% Cu through a concentrator to produce up to 56,000 tonnes per year of copper in concentrate. We estimate first production in 2H12.

- Liquidity. According to the press release, Chariot has ~C$19 million in cash and is responsible for funding 70% of the project's US$8 million budget in 2009.

Valuation
CHD shares trade at a P/NAV of 0.15x versus its peer group weighted average at 0.62x. Our target price is based on a 0.30x P/NAV multiple and is in-line with risk and liquidity-adjusted historic multiples for advanced projects

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Doug Casey: Following yesterday's TradingPost, here's a mail from a regular reader, initial "R". Good to see that the smarter among you consider him, at best, a stage along the way.

I've developed a real dislike for that guy (Casey). I hate to admit I was a subscriber for a while. His entire operation is one big marketing drive. You sign up for one service, they tout another. And another. And another. Too many layers, and way too much appeal to elitism. Way too little in the way of performance too. He buries you in more picks than you could ever afford, then selectively touts the winners while tap dancing the burning match routine when his losers blow up.

And what's with the Salta crap? Like I'm gonna sip wine and play polo all day with Mr. Risty while the rest of the world burns? **** that. I hope he gets overrun by Marxist guerillas.

The final straw was when he hired some so-called ex-CIA spooks to snoop for poop. As if. Show us your badges hosers. Don't got any? Thought so. Oh, and the hijacking of ERIS, as if he had clue one what Anton Wilson was about. That really irritates me. He and Tony Robbins should get together.

The NOBS report on Chariot Resources

It's done, it's dusted and the new NOBS report on Chariot Resources (CHD.to) has now been sent to all the pre-order clients. It's not too late to get yours, and in my personal I think you should send me ten dollars immediately....but then I would say that. However, if you do you'll knows all you need to know about CHD.to in order to trade / invest in it sucessfully, written as usual in true 'No B.S.' style-)

If you're interested and want to know a bit more about why I chose this stock to cover, here's the link to read which also explains how to pay...it's really easy...all you need is a PayPal account or to be a credit card holder.

Send me money; you know it makes sense :-)

Chariot Resources (CHD.to): A new NOBS report for sale

This is a pitch to try and sell you a copy of a new NOBS report that features Chariot Resources (CHD.to). However, to try and confuse you, we begin by mentioning a different company to the real main event.

I've been watching the progress made by Antares Minerals (ANM.v) recently. Today it's trading at $1.68, and with around 54m shares out that means it has a market cap of C$90m. That's pretty good. For sure it has cash at bank ($21m at Oct31 '08) and for sure the recent resource report makes for very prospective reading. It's in Peru, drilling great copper returns, it's got smart management, it's deserving of its success so far. All in all the company is doing well and I wish them good luck and godspeed.

But ANM.v also made reflect just how some stocks become fashionable and how others are somewhat forgotten, even ones in the same sector and in the same country that are much further along in the development track and offer real value. And so I'm writing up a NOBS reprot on Peruvian junior copper play Chariot Resources (CHD.to) that will be delivered to anyone who stumps up the royal booty of ten US dollars between now and the Sunday evening delivery date. It's the same system as in previous offers, folks. All you need to do is use your PayPal account to send U$10 to...

otto.rock1 (at) gmail.com

....(replacing the (at) with an @) and your copy gets sent in plenty of time before the bell on Monday morning. If you prefer, you can use this U$10 pre-set button below (that takes all the usual credit cards, too). And to make it as straight a deal as possible, once again I declare that I do not own CHD.to and will not buy into it until anyone who orders a copy of the report has their own opportunity to decide on the investment (i.e. I won't go near the thing until next Wednesday mimino).

Your humble correspondent believes that CHD.to offers good value right now if (and I repeat "if") you think that copper is looking strong and will stay that way. The point here is the relative value of a market laggard compared to peer stocks grabbing the limelight. If ANM.v isn't a flash in the pan and the whole sector is about to enjoy a decent rebound, then companies such as CHD.to are the place to look, methinks.

So order your copy of this NOBS report on CHD.to today and be wise about the company for next week. To wrap up, here's a comparative chart of CHD and ANM to point the way.

Microcap copper junior update

Hey I'm no TA junkie or pusher, but check out Chariot Resources (CHD.to) today.

This is the copper junior explorer with the large 'Marcona' property on the South coast of Peru that it majority owns (with a Korean consortium heavily involved) and that IKN mentioned recently. With copper showing continued strength (topped $1.80/lb today), people seem to be revisiting this beaten down junior. As for the wider sector, the upmove is true of more than just CHD.to, of course. Here are a few examples of LatAm copper junior charts. Featured are Baja Mining (BAJ.to), Inca Pacific (IPR.v) and Candente (DNT.to).

There's no reco in this post. DYODD, dude. There are also plenty more stocks displaying short-term pops on the recent copper moves and it's not confined to the non-producing explorers with large copper prospects in LatAm. Call this post a small headsup and let's see what Dr. Copper does next.

Chariot Resources (CHD.to): A bit of unfounded gossip

Get a haircut, scruffy

After the bell yesterday we had this press release from Chariot Resources (CHD.to) (owners of the advanced exploration-stage Marcona copper project on the coast of Peru next to the big Shougang ironworks) that stated the company was adopting a shareholder rights plan. Pretty standard stuff for two reasons:

1) The plan is designed to protect sharehodler in the event of a takeover bid by some third party.

2) It's an easy way to get a company a bit of publicity and start people thinking about possible takeovers.

The "we have adopted a rights plan" PR is trotted out by junior mining companies all over the place so this one from CHD.to, being of the totally standard cookiecutter variety, would normally have passed through my eyes and out the back of my head without registering much. After all, I don't hold the stock (though I know a guy who does and that's the disclosure, so DYODD dude).

But it reminded me about a rumour I heard a few weeks ago about the normally gold-only California scientology promo tagteam (and that's putting it as nicely as I possibly can) of Ken Gerbino and Michael Baybak. The ottobird heard some word from a normally solid and reliable source that Baybak was suddenly very interested in the Marcona district of Peru. This was kind of strange because, as noted above, these dudes have only really ever operated in the world of gold miners (as Mark Twain would have note, gold mines suit them perfectly). Because it wasn't "their metal" I kind of forgot about it after a time, though it was interesting for sure.

So maybe Baybak has his sights set on Shougang's overly cheap neighbour CHD.to, the one with a whole heap of copper? Maybe, and maybe CHD.to has got wind of whispers of the type that passed this desk back in January (I think it was). Be clear, this post is based strictly on unconfirmable rumour and should be taken as such...just passing on a bit of gossip.

DYODD, dudettes and dudes, but FWIW I do think Chariot is a smartly-run company with a very nice and undervalued copper asset. If Cu goes above $2/lb it will suddenly become an object of conversation in polite circles again. That's solid opinion, not scuttlebutt. I'll leave you with the CHD.to 12 month price chart; just another story of junior copper ouchness.

Mining market thoughts

Dorato Resources (DRI.v) saw more insider selling last week. Today somebody somewhere sold 350,000 shares at $0.57. That's a long way off the $0.80 that Bedoya sold his second lot of 35k for last week. Last one to leave turn the lights out, please.

Interesting action in Chariot Resources (CHD.to), up 10% to $0.17 on high volumes. Last week the President of Shougang Mining met with Twobreakfasts and assured him and the rest of Peru that Shougang was pressing ahead with its $1Bn expansion project. The thing is that Shougang's mine is right slap bang next door to CHD.to's Marcona project; in fact CHD.to bought the land from Shougang in the first place. So why the sudden interest in Chariot today? I dunno, but the pieces fit a larger puzzle.

Frontera Copper (FCC.to) is now the centre of a bidding war, which can only be good for those holding (e.g. reader AS) and the wider sector. Mexican group Invecture had been outbid by PCU's 65c offer on Feb 4th, but today's upped $0.75 offer for FCC.to. adds fun to the scene. Let's see if PCU comes back at them. The stock has been trading at $0.79 and $0.80 today, so the market expects more action yet. Will they get it? I dunno. If you own, hold 'em. If you don't, and you want to, be careful about your entry point.

Gold Resource Group (GORO.ob) is at $4.60 right now. All very nice for the holders, but it gives me a chance to show my own failings as an analyst. In an October NOBS report I put a target on GORO.ob of $3.92 with gold at $900/oz (and silver $14). Here we are close to that spot gold number and the stock has shot way past my target. I even mentioned it here on the blog a few weeks back when it stood at $3.78 and mused that it was getting ahead of itself and maybe it was profit-taking time.

This is a good example of one of my major weaknesses in calling stocks, something I've battled with for a long time. As a value-based investor that calls targets based on fundamental analyses I find it tough to layer on market psychology and sentiment to my targets. I still think that GORO.ob is ahead of itself here, but that is no disguise to the fact that my "take profits" call at sub $4 prices totally sucked. Just another reason why I really mean it when I write "DYODD". After all is said and done, I'm just a dude with a blog.