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Montecristo, You could well be right. I hope indeed that the relationship with BHP is good. But I am not sure about that. NM is apparently single minded and driven and not necessarily a consensus minded guy, although I do not know him personally. But even if the relationship with BHP is not that warm I don't think it matters to the outcome. BHP would know it wants this resources and BHP is not in a position where it can low ball Solg, due to the sheer size of the resource that has been proven up, IMHO. I tend to think if the relationship were really good that BHP would have appointed a director to the board. But I hope you are right. I agree with you that their hands were tied while a very large resource was built up
Not driving-drilling
My take on the standstill agreement with BHP was always:
Solg needed funding so allowed BHP to build a nice stake in return not only for the funding which has allowed 2 years of drilling but also enough time to prove up a truer value. Nick has control over the share register so BHP knew they had to play ball. When the standstill is up they can make an offer which would be a lot higher that 2 years less driving would have given. We effectively tied their hands while building a good relationship at the same time.
Why else have BHP been so quiet lately and it explains radio silence, you could almost say it's been a done deal for the last 18 mouths or so.
Thanks BNC. It is encouraging. RIO is out of coal. Glencore has limited its coal production. BHP is obviously sensitive about thermal coal. The political and popular emphasis on climate change makes these moves away from carbon inevitable over the next 10 years. This is a reality regardless of one's personal views about climate change and the contribution of coal to it. But they are all major miners and their businesses directly reflect commodity sales. Copper and gold are not out of fashion and there is no sign of that happening. Thanks for posting the article. The issues that seem to be critical now are twofold. The first is whether Solg is aiming to become a miner or to sell Cascabel and prove up the other tenements. The second, which is related to the first, is what is the funding it is seeking for: to become a production company or to further its proving up of its great resources. Time will tell. But I think we will know soon as some have said today.
Some very good posts on BHP this morning. Signs are positive imo
Awesome thanks BNC.
last bit
Why Mike Henry is about to hit the accelerator at BHP
The culture at BHP is good, and is delivering strong results. But Henry wants his 72,000 people to become more excited, and to instil more of what he describes as “performance edge” in the business.
This could create some tensions on the front line, but Henry's belief is that his people are hungry to perform, and will welcome the fact BHP will invest to help them do it.
It's smart stuff. BHP doesn’t need radical surgery, but equally Henry recognises the environment the resources sector has enjoyed for two decades is coming to an end.
No longer will demand for commodities outstrip GDP growth, which means that BHP won't be pulled along in the same way it was.
The renewed focus, energy and nimbleness that Henry wants to bring is needed for a world that is rapidly changing.
r's
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cont'd
There was, not surprisingly, plenty of praise for the portfolio left by Mackenzie, which Henry believes is in very good shape, with enough high-returning, short-term options for the next three to five years.
The exception is thermal coal, which remains in a kind of resources purgatory; Henry will shift in a heartbeat if he can get the right price, but until then he’ll run it, while also playing down its importance in BHP’s overall portfolio.
Getting rid of thermal coal would help Henry progress one of his big strategic themes: the decarbonisation of the planet. BHP’s Jansen potash project in Canada is another example of how BHP can play to this theme, albeit one that requires somewhere around $US5.5 billion.
But Henry has also made clear he wants to see more action in other “future facing” commodities that will be needed as the world becomes greener.
BHP doesn’t need radical surgery, but Henry recognises the environment the resources sector has enjoyed for two decades is coming to an end.
Over the longer term – beyond five years – he wants more copper and more nickel in the portfolio, preferably delivered through exploration or through deals with early-stage mining projects where a mineral has been discovered, but not developed.
Big bang deals are likely off the table. The memories of BHP’s shale disaster are still raw. “Having borne the pain of acquisitions at the wrong point of the cycle and for assets that were mature, I don’t want us to be there,” Henry said on Tuesday.
Where Henry can get results sooner – albeit incremental ones – is through his operational changes. These have five areas of focus: culture, capability, asset-centric focus, technology and ongoing adherence to the capital allocation framework developed by chief financial officer Peter Beaven. (The CFO prevaricated on his immediate future on Tuesday, but it is clearly closer to the end of his illustrious stint at BHP than the start of it.)
Bolstering the front line
Henry's plan is to push BHP’s front line a lot harder, using several tactics.
First, he plans to double the proportion of permanent BHP staff working at assets – that is, not contractors – from the current level of 30 per cent to 40 per cent. This will allow BHP to invest more in its own people, including through better training and development.
To bolster these changes, front-line workers will get more support. Supervisors, who currently have somewhere between 25 and 40 direct reports, will eventually have between eight and 15 under the Henry vision. They’ll carry less administrative burden and spend more time in the field, building individual relationships.
Veteran mining analyst Peter O’Connor of Shaw & Partners says BHP is a Friday company, rather than a Monday company – that is, BHP workers look forward to the end of the week, rather than bursting in on Monday ready to change the world.
Henry might not describe it that way, but it’s a neat way to think of what he’s trying to do here.
no worries AK
here's the full thing
Henry's plan to reshape BHP from the ground up
BHP doesn’t need radical surgery. What new CEO Mike Henry wants to bring is a fresh focus, energy and nimbleness in a rapidly changing world.
Feb 18, 2020 — 11.55am
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The Mike Henry era at BHP promises to be a lot more subtle than the big-bang deal-making and portfolio restructuring that typified the time of his predecessor, Andrew Mackenzie.
But make no mistake. If you’re a worker at BHP’s front line – a truck driver in its powerhouse Pilbara operations, for example – then you'll feel Henry’s changes more keenly than any other recent CEO.
Mike Henry is hunting incremental change, not a radical shake-up. David Rowe
The market’s first real look at Henry’s vision, delivered on Tuesday with the mining giant’s half-year results, suggests he wants to orchestrate a cultural evolution that will start from the very bottom of the organisation.
His goal is to find the incremental productivity gains and cost cuts that will insulate the resources giant from a world where demand for commodities will be lower and conditions will be more volatile.
The company’s interim results demonstrate why Henry, who became CEO on January 1, feels little need to dramatically shake things up.
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Perhaps the best example of just how smoothly the BHP machine is running is that the company received a $US1.5 billion ($2.25 billion) benefit from higher commodity prices during the half – and so did underlying earnings.
This suggests the continued work on lowering costs and increasing production across a diverse range of assets has helped to remove any financial friction inside the business. The higher earnings then flow through to investor returns; BHP paid its second-highest ordinary dividend ever during the half year, at US65¢.
While the payout figure was below analyst expectations, that appears to reflect Henry’s caution around the outlook given how the coronavirus has hit China.
If the virus is contained by the end of March, BHP says the economic impact will be minimal. If that doesn’t happen, BHP’s interim dividend decision means it will have kept a little cash in reserve for the back half of the financial year.
With the first half’s numbers looking good, and production and cost guidance confirmed for the full year, the focus quickly turned to Henry’s initial thoughts on strategy.
Henry's big strategic themes include decarbonisation
There was, not surprisingly, plenty of praise for the portfolio left by Mackenzie, which Henry believes is in very good shape, with enough high-returning, short-term options for the next three to five years.
The exception is thermal coal, which remains in a kind of resources purgatory; Henry will shift in a heartbeat
Roger that BNC, typo while trying to rush through it.
Can anyone paste the article as I am not able to read thru the link posted.
AK
Hi buddy -
Little minor point matey is the fact the main concession conataining Alpala is CascaBEL not CascaBLE matey...........
I know it's a minor point buddy but it is nice to know we know what we're talking about re our investments ;o]
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Cheers Mog.............
Pretty clear hints there......
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Nice on pinooo
Dear what's yer face......
Cascabel is for sale for £5bln....or for a quickie deal £2.00 per share.....
Cheers
Pinooooo.
Seriously though I'll say a BIG thanks for bringing this report to our attention!!!
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Great find Mog99, thanks again.
BHP failed in the Bid during 2016, 4 year back I think they bid for 270 Million. I think they know it's going to be near about 2 Billion ish. Hope to see that soon rather then later.
I still think NM will sell cascable and move on to Prove other 13 targets, also Blanca and others might have given him a good insight of what we already have.
If you read the BHP's economic and commodity outlook (FY20 half year), in it is one paragraph which in implies that BHP know they wont get Cascabel cheap
"Our view is that the price setting marginal tonne a decade hence will come from either a lower grade brownfield expansion in a lower risk jurisdiction, or a higher grade greenfield in a higher risk jurisdiction. Neither source of metal is likely to come cheaply"
https://www.bhp.com/media-and-insights/prospects/2020/02/bhps-economic-and-commodity-outlook/
Iceberg, Bozi and DBW, I am in agreement.
It seems to me (imho) that if NM was doing a poor job there would have already been a low ball offer come in from BHP or someone else. One has to ask why BHP has not made an offer if Solg is in as bad a position as some people on this board say it is? It is because BHP know they cannot steal the company. They must realise that route is not open and that NM knows better than anyone the value of the resource. He also has the share numbers to prevent a hostile takeover. I have no doubt that BHP would have swallowed this company already if they could have. It would be a no brainer and could be done at relatively little cost to BHP. The fact that it has not happened suggests that there is a battle of wills going on. NM only gets a great pay day if the PI's get a great pay day. People who whinge about his salary are penny wise and pound foolish. He stands to gain the big win from a big share price. I want the PI's who have put their money into this company to have a big win. And I enjoy reading this BB whether the opinions be optimistic or pessimistic. Good luck to all. We few, we happy few
Morning Ice et al
I’m 99% certain that MRE3 and PFS are pretty much ready to go , the conclusion of the current financial discussions (whether funding or a potential offer) is the catalyst for this news being released ...... follow that swiftly with Blanca update and suddenly we’re in a whole new place
I don't think many folks understand that to fill a copper hole in 5 years time there is only a handful of new exploration tier 1 project s in the world.
Cascabel is 5 years ahead of any potential site in Ecuador etc due to the amount of drilling it takes to prove up a tier 1.
F or production in the mid 20s you need the FS now.
Exactly theiceberg. He's leading a company 737+ strong now and there's going to be a slippage from what were desired timeframes.
BFS and the other plans for 2020 unchanged so for me this is a temporary disruption. Easy to see why others are playing it for more though if it helps their trading...
Morning Bnc.....i was thinking of sending him an email....lol
Over the longer term – beyond five years – he wants more copper and more nickel in the portfolio, preferably delivered through exploration or through deals with early-stage mining projects where a mineral has been discovered, but not developed.
https://www.afr.com/chanticleer/henry-s-plan-to-reshape-bhp-from-the-ground-up-20200218-p541u8
Pinot
:0)
BHP accounts released today talk about cascabel as BHP s copper option.
It is the only long term tier 1 option they have and there is no way they will let somebody else have the copper imo.
It's also funny how folks think Nick is god. He has no control over how long funding takes. He has very little control how long the mre takes as it's done independently by a third party and rightly so.
Nick will also make far more money from a higher share price than his salary.
mornin pinot
hands up! we got one!!! please come buy us!!! [lols]
Morning all
https://www.ft.com/content/480d9dc4-51d3-11ea-8841-482eed0038b1
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https://www.ft.com/content/480d9dc4-51d3-11ea-8841-482eed0038b1
“We need more copper and we need more nickel,” Mr Henry told reporters. “We do have some growth ahead of us in both of those commodities but if I think to the far future we’d like to have more options.”
Most of the world’s biggest mining companies are looking for opportunities to grow in copper, which is used in wind turbines, and nickel, a key raw material in the batteries that power electric vehicles. However, large, high-grade deposits that are easy to mine are becoming more difficult to find.
Pinot
:0)