Looks like the X in @EikeBatista's companies now stands for exponential loss of wealth. #OGX #EBX

"an investor who bought OGX shares at its I.P.O. price would now have lost over 96% of the original investment." 
The "company is producing hardly any petroleum, and it must make bond payments of about $40 million in October and $100 million in December."

Brazilian Regulators Open a New Inquiry Into Batista - NYTimes.com

Ricardo Moraes/ReutersEike Batista, left, with President Dilma Rousseff of Brazil, was flying high in 2012. Now his energy empire is being dismantled.

SÃO PAULO, Brazil – Brazil’s securities and exchange commission said on Thursday that it had opened a new formal investigation into the business dealings of the onetime billionaire Eike Batista.

The commission, known as the CVM, is examining whether Mr. Batista and five other executives of the petroleum company OGX may have violated several articles of Brazil’s corporate legislation.

Brazil’s rules require management to release material information that could influence a company’s share price as well as disclose information about their personal ownership stakes in the company.

In March, regulators had opened a separate inquiry into whether Mr. Batista might have violated disclosure rules.

The CVM has not revealed what specific events led to either inquiry, but OGX frequently announced major petroleum discoveries that subsequently proved to be economically unviable.

The new inquiry is the first indication that Mr. Batista or other top managers of his companies may possibly have changed their ownership stakes in an illegal manner, as the assumption has been that Mr. Batista has been hurt along with his investors.

Shares in OGX fell more than 7 percent on Thursday morning in São Paulo, trading around 38 centavos apiece, or about 16 cents.

The latest problem just adds to the woes of Mr. Batista, who was once Brazil’s richest man and had vowed to become the world’s richest as well.

When OGX went public in June 2008, it sold shares to investors at 1,131 reais apiece, or about $690 at the exchange rate at the time.

The company had a 100-1 share split in December 2009. But an investor who bought OGX shares at its I.P.O. price would now have lost over 96 percent of the original investment.

In recent months, Mr. Batista’s other companies have seen similar collapses in their share prices, as cash flow proved insufficient to service debt and to make the extensive investments that were supposed to create an empire of energy, mining and logistics companies.

Mr. Batista’s fortune, once over $30 billion, has collapsed with it, and he has sold off several assets in recent months.

In August, Mr. Batista sold a controlling stake in his logistics firm LLX to the energy investment firm EIG Global Energy Partners, based in Washington. The same month, OGX hired the Blackstone Group as a financial adviser, a possible sign that either a sale or a debt restructuring is near.

The company is producing hardly any petroleum, and it must make bond payments of about $40 million in October and $100 million in December.

The world’s largest bond investment firm, Pimco, invested heavily in OGX’s bonds and is leading a creditor committee that is negotiating with OGX.

Mr. Batista ostentatious lifestyle had once been popular gossip fodder. He raced speedboats, married a famous model and had dinner with Madonna. But since his fortunes have fallen, he has been forced to sell or pull back on his holdings.

Among the other assets he is seeking to sell is a luxury hotel in Rio de Janeiro, the Hotel Glória.

An attempt to sell his $19 million yacht, the Pink Fleet, failed, and Mr. Batista sent the yacht to the junkyard last month to be scrapped, presumably to save on maintenance costs.

Brazilian Regulators Open a New Inquiry Into Batista - NYTimes.com

 The MasterFeeds

$GDXJ #Gold #ETF deletions/addition forecasts- $ANV, $SMF & $SSRI potential addition candidates

From BMO: 

CONCLUSION: this would be positive for SMF, ANV and SSRI. Note that Allied Nevada is a deletion candidate from the larger GDX index so the effect would be mitigated. The real positive impact would be IF Semafo is included. It would generate over 20 million shares of net purchases.

 

Timing is sept 13^th for the announcement and sept 20^th to become effective.

 

<image001.gif> Quantitative Execution Services Tuesday, September 3th GDXJ Gold ETF - Addition/Deletion Forecasts Expecting several changes this quarter including SMF CN and CGG CN   The Market Vectors Junior Gold Miners Index will be having its quarterly rebalance on Friday, Sept 20th.  The official announcement is expected after the close of trading on Friday, Sept 13th.       Forecasts: Expecting several changes this quarter Allied Nevada and Semafo Many of the forecasted additions were previously too large to be added to the GDXJ.  Several are now within the 90%-98% market cap addition range.    Currently we see Allied Nevada well within the addition threshold and Semafo just inside the addition threshold.   This scenario could be impactful to Semafo since its potential addition would cause 7 days of volume.    China Gold On the deletion side we are once again seeing China Gold (CGG) close to being too large for the GDXJ ETF (right at <80% threshold).   If it is removed this would cause around 20M shares of supply from GDXJ.   This would be ideal for the Van Eck ETF's since CGG CN is likely to be added to the GDX ETF which would result ~15 M shares of demand.   Considering the low liquidity of CGG this could be very impactful.    Other deletions There are also four likely deletions due to the minimum market cap requirement (U$ 75M).     See below and attached for our forecasts   Announcement Date: Friday, Sep 13th   Rebalance Date: Friday, Sep 20th   About the GDXJ ETF Van Eck's Junior Gold ETF (GDXJ US) tracks the Market Vector Junior Gold Miners index and has an AUM of approximately U$ 1.6B.  Changes in this index are impactful since the GDXJ holds a significant portion of the underlying names (~7% of float shares).   See estimated flows below Forecasted Additions (ANV US, SMF CN, ~SSRI US) Name Symbol Type Estimated Index Demand Days of Interlisted ADV Conviction ALLIED NEVADA GOLD CORP ANV US Add +7.1 MM 1.2 High: Thru 90% threshold SEMAFO INC SMF CN Add +20.1 MM 7.1 Med: Just thru 90% threshold SILVER STANDARD RESOURCES SSRI US Add +6.0 MM 3.2 Low: Near 90% threshold     Forecasted Deletions (~CGG CN, VGZ US, RIC US, THM US, AUMN US) Name Symbol Type Estimated Index Supply Days of ADV Conviction CHINA GOLD INTERNATIONAL RES CGG CN Delete -19.9 MM 29.6 Med: Right at 80% threshold VISTA GOLD CORP VGZ US Delete -6.2 MM 8.9 High: Below $75M limit RICHMONT MINES INC RIC US Delete -3.2 MM 23.8 High: Below $75M limit INTL TOWER HILL MINES LTD THM US Delete -4.4 MM 6.0 High: Below $75M limit GOLDEN MINERALS CO AUMN US Delete -3.5 MM 13.3 High: Below $75M limit

#Allana #Potash and Israel Chem. Ltd. #ICL may have formalized an agreement for a J/V (unconfirmed source)

Management has indicated that they are presently still only in negotiations with several companies right now and that no definitive agreement has been signed as yet.

Event: According to an unconfirmed source Allana Potash and Israel Chem. Ltd. (ICL) may have formalized an agreement for a J/V after meeting mid August.

 

Details:

Ø  We have found one article dated today that is saying the two have formed a J/V to develop the Danakhil deposit.

Ø  This follows the news that the two companies were in talks mid August (See our previous email - attached)

·         ICL is the sixth largest potash producer, with ~6Mt in annual capacity (operations in Israel, UK and Spain).

·         ICL has been vocal recently about looking to expand capacity through new development and/or acquisition abroad.

·         Notably, 4Mt of ICL's potash production comes from the Dead Sea and this concession is set to return to the state in 2030.

·         Allana recently indicated that discussions with potential offtake and equity investment partners (large fertilizer companies) have advanced and the company noted that interest has actually increased recently with the latest developments in the sector.

Conclusion:

If True this would be positive, having the support of ICL which would be an asset in terms of helping secure money for capex and for marketing and sales of potash throughout the Mideast, Africa  and Asia (particularly India).

Allana's low cost project and strategic location would be a good compliment/eventual replacement for ICL's low-cost Dead Sea capacity (one of the reasons Potash Corp. was an interested acquirer).

 

http://www.indmin.com/Article/3248915/Channel/19523/Israel-Chemicals-to-partner-Allana-Potash-in-Ethiopia-project.html

 

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Israel Chemicals considering potash mine in Ethiopia

Site is cheaper on balance than other places worldwide, closer to company's main markets.

By Yoram Gabison | Aug. 12, 2013 | 2:51 PM

 

Israel Chemicals has been in talks recently with a Canadian listed company Allana Potash about opening a potash mine in Ethiopia.

Allana Potash CEO Farhad Abasov met with ICL senior management in Tel Aviv three weeks ago to seek ICL's participation in the construction of a mine at the Dallol site in Ethiopia's Danakhil Valley, located in the country's northeast.

Allana has already raised $85 million from investors to build the mine, which is expected to yield a million tons of potash annually. The mine site has 182 million tons of proven potash reserves and potential reserves as high as 438 million tons. The mining project will be based on technology in which ICL has particular expertise from its Dead Sea Works, pumping and evaporating brine to extract potash.

ICL commented it regularly examines opportunities for international projects and was seeking to expand its current potash production capacity. However, it cautioned that recent circumstances in the potash market were making new mining projects challenging.

Allana estimates that investment in the mine will reach $642 million, a figure which includes both the mining operation and building the transportation infrastructure to carry the potash from Dankil to the Indian Ocean port of Tadjoura, located in next-door Djibouti. The production costs including haulage to port, are expected to reach $98 per ton, with annual maintenance costs of $26 per ton. (These costs compare with averaging mining costs of $100-$150 million per ton.)

Acquiring either full or partial ownership of the mine in Ethiopia would present several advantages to ICL, which is looking to expand its production capacity in core areas such as potash. The company will be required to return its Dead Sea potash concession to the state in 2030, which will leave the company scrambling to find a replacement for 4 million tons of production capacity for a mineral that provided 63% of its operating profit in 2012.

ICL already holds a 640 square kilometer potash mining concession in Spain's Catalan region. Currently, the company exploits only 64 square kilometers of that concession, but estimates that the site has reserves that would support production of up to 10 million tons of potash per year. However, Ethiopia is closer to two key markets for ICL, China and India. Moreover, the demand for potash in the local African market, which is currently 1 million tons per year, is expected to reach between 5 million and 7 million tons per year by 2020.

The Dallol project has already completed the prospecting stage and pilot production. It also completed a series of operational tests conducted in February 2013 to determine the cost of establishing and operating the mine and to receive the approval of Ethiopia's environmental ministry. Allana has submitted a formal request to the Ethiopian authorities for a mining permit.

The Ethiopian government has also paved most of the highway leading from the Dallol site to the port in Tadjoura, which although belonging to Djibouti, serves as Ethiopia's main Indian Ocean port.