glencore - dodgy brothers revisited

Dear All

It is certainly worth revisiting the 2010 accounts and you will get a real sense of how much Glencore is proposing to rip off the minority shareholders.

1. Of interest, the offtake agreement with Glencore is due to expire on 1 December. Basically, a 4% discount to the LME on all nickel sold to Glencore delivering a $20 million benefit per annum to Glencore. MRE does not need to go through Glencore!!

2. Exploration - We have a 40 year mine life - why explore if things are so marginal $5 M per annum.

3. Exec Salaries - Is Johnson really worth $3 M per year plus the other execs. Overpayment of at least $3 M per annum.

4. Interest and amortisation of $43 M - Not a cash cost.

A quick analysis and there is an extra $70 M of cash profits not to mention $70 M of tax losses which could be found if we had no Glencore.

Puts a different spin on it, let alone what Glencore will find in their proposed post acquisition review which they should have done already if they were not trying to rip off the minorities.

Cheers EOS