Good Morning,
This has to be very brief, apologies.
There's some speculation doing the rounds validated (for once) in part by what other analysts (decent ones) have noticed regarding Allana Potash (TSX: AAA) who's currently had a bid from ICL Chemicals (owners of Cleveland Potash down the road from SXX's).
The 'word' is that ICL Chemical are likely to see a higher bid for Allana Potash from China Communications Construction Company (CCCC), or CCCC is on the hunt for other 'assets.' CCCC have the cash to develop, admittedly their alleged MOU terms with AAA was ssuspect, but CCCC are now scoping out other prospects, as well as considering a higher 'outright' offer for AAA.
The break-fee payable to ICL if AAA changes their mind is paltry (around £3m BGP) means will more than likely become competitive. ICL have the option to pull out, and go after Highland Resources (ASX: HFR) if CCCC come in with a higher bid. The curve ball being if CCCC are 'really' in the mood there's a possibility of them taking SXX private before approvals. Something shareholders, pending the size of any offer, would perhaps welcome? The later is a little stretched but not impossible.
Rio's Q1 results are better than expected, allowing for derailment that impacted the iron ore numbers, copper, bauxite and believe it or not, coking coal came in half decent. Higher first quarter coal production was primarily driven by improved production rates at Kestrel South following the longwall ramp-up, increased semi-soft production at Mount Thorley and Warkworth and higher thermal production at Hail Creek. With Rio/Kestrel moving into APF's royalty area, and today's update guidance at Narrabri, APF is certainly looking more favourable.
Atb Fraser
