NWH (ASX) Ann: Trading Halt

Originally posted by Pioupiou ↑

Josh01 wrote, "Pretty sure to be the Rio contract. If it’s not, even better."

RIO Management would prefer to not issue announcements, and get on with the task of optimising the intrinsic value of the company, not ramp up the SP to appease the Hoi Polloi in the short term. The trading halt and the coming Announcement would be to not fall foul of ASX and ASIC regulations. The yet-to-be-announced contract is either BIG, or Management do not want hearsay of a relatively modest contract to be exaggerated by the market. I'll vote for the former.

If the contract were another coal-related deal, it would, I think, merit nothing more than past coal contract announcements – none of which were proceeded by a trading halt, although the contracts were a reasonable size (e.g., Curragh extension was $210M). Oddly, the previous contract-announcement trading halt was on 12/12/2016, and the subsequently announced Yandicoogina Contract Award was worth only $40M. The SP was then circa 65c-67c. I recall being perplexed by the need for a trading halt for such a small contract, as did Old_mate – see his post 21305633 and mine 21309188, wherein I referred to the trading halt as an indulgence in apparent rectitude. Maybe the news had leaked out, and Management did not want uninformed folk to make a mountain out of a molehill.

I drafted a post yesterday on my RIO hope, but as it is something I have mentioned before, I decided not to post it. However, I'll post part of it now in coloured font. If it is in small font size, that is because I do not know how to fix that, and retain the colour.

Without more than gut-feel and published information, I am hoping that NWH will release a significant Announcement this calendar year in relation to RIO's plans for Koodaideri, plus what RIO calls “sustaining capital”. Although have opined this before, below are bits of published information that I may not have provided to support my hopes:

From https://thewest.com.au/business/min...ul-trucks-program-to-fifth-mine-ng-b88766227z

Mr Salisbury said 1600 construction jobs and 600 new operational roles would open up if Rio gave the green light for its $2.7 billion Koodaideri mine later this year for construction to begin next year. He said Koodaideri would be Rio’s first “intelligent mine”, using everything the company had learnt in automation and technology over the past 10 years.

Rio would also spend $4 billion in sustaining capital just keeping its existing operations continuing over the next three years.[Note the word “also”, which implies that the $2.7b is not part of the $4b]

From https://www.asx.com.au/asxpdf/20180501/pdf/43tpcdkxqkthgz.pdf

NRW is pleased to announce the award of Early Contract Involvement (ECI) by Rio Tinto for the provision of project development services. NRW will provide services and support through early contractor engagement and assist with providing construction expertise into the development of the sustaining capital program of works.

The underlined words are meant to suggest the close relationship between NWH and RIO – they share a common hymnbook.

Expand

I got the “sustaining iron ore tonnage” theme right, and the customer wrong in my earlier post today. It did cross my mind that it could be BHP, because I based my gut-feel on the RIO-style language used by NWH, but as I added in my 34031619 post of 29/06/2018, “. . . BHP tends to use similar language.”

The two cherries on the cake are that: a) the BHP work will commence soon, and favourably impact FY18 and FY19; and b) the contract is with BHP, which leaves the potential open to also land a RIO contract soon. Getting the concrete-footing work for the conveyor belts is a plus – something NWH missed out on at Silvergrass, unless they obtained that work without fanfare via a subcontract.

I am looking forward to the day when I can, with conviction, move my target price above $2.00.

PS: Those who think that new contracts means better cash flow, and hence dividends in the short term, should think again. This type of company is like a heat sink that absorbs heat (cash) when things are heating up, and emits heat when slowdowns require little CAPEX.

No.	Vol.	Price($)
44	11202	$3.91

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11202

$3.91

Price($)	Vol.	No.
$3.92	18580	34

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$3.92

18580

No.	Vol.	Price($)
1	5058	2.370
4	18795	2.360
4	37687	2.350
1	7879	2.340
3	24992	2.330

No.

Vol.

Price($)

5058

2.370

18795

2.360

37687

2.350

7879

2.340

24992

2.330

Price($)	Vol.	No.
2.390	11634	3
2.400	71958	7
2.410	16085	2
2.420	19941	3
2.460	816	1

Price($)

Vol.

No.

2.390

11634

2.400

71958

2.410

16085

2.420

19941

2.460

816

(20min delay)
Last $3.91		Change 0.010(0.26%)		Mkt cap ! $1.574B

Open	High	Low	Value	Volume
$3.90	$3.92	$3.88	$862.7K	221.1K

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