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http://www.businesstimes.com.sg/pre...-takes-his-first-sgx-firm-board-seat-20121204
Jim Rogers takes up his first SGX firm board seat.
Published December 04, 2012.
'Commodity King' joins recently listed Geo Energy as non-exec director
By Lynn Kan
Mr Rogers: 'We're investing in a new country (Indonesia), a new venture (coal mine) . . . But that's how you find opportunity and that's how you get rich.'
[SINGAPORE] Septuagenarian "Commodity King" Jim Rogers has found the first board seat in a Singapore-listed company that he would like to keep warm.
He was yesterday named a non-executive director of Geo Energy Resources, which debuted on the Singapore Exchange mainboard in October.
Mr Rogers, who rarely joins a board or owns shares, has not invested in Geo Energy yet, but said he will have a financial interest in it in the future.
"If I get there and find the mine is half underwater, I might change my mind. But I don't think I'm going to get there to find it's all under water," he said.
What Mr Rogers likes, Mr Rogers gets.
He was introduced to Geo Energy executive chairman and founder of Geo Energy, Charles Antonny Melati, through the company's IPO consultant Robert Lim, the mangaging director of Ellis Botsworth Advisory.
After a few meetings and doing his own homework - including a trip to Geo Energy's coal mine in East Kalimantan in two weeks' time - Mr Rogers said he was on board.
Acknowledging that not all will be perfect when investing in an Indonesian coal mine, he said what he was looking for was an opportunity: "If everything were perfect, the stock would be $6."
Geo Energy last closed at 35 cents, 2.5 cents above its offer price, when trading was halted last Friday.
"We're investing in a new country, a new venture. This is not investing in a fully developed coal mine in west Virginia in the US. But that's how you find opportunity and that's how you get rich."
Geo Energy's sole coal mining asset, PT Bumi Enggang Khatulistiwa (BEK), produced 445,000 tonnes of coal since bagging its first contract in February. It will hit 700,000 tonnes for the full year; next year, it estimates production to reach 2.3 million tonnes of coal, dwarfed by the likes of Indonesian coal miners such as Bumi Resources, which expects production to weigh in at 75 million this year, and 83 million tonnes next year.
DMG & Partners Research initiated coverage on the stock with a "sell" rating, unconvinced that the group's probable earnings growth could surmount downside risks like BEK's "low reserves" levels of 12.5 million tonnes and limited mine-life of six years.
But Mr Rogers clearly evaluates BEK's potential differently.
"Geo Energy has smart people and new reserves to be developed, and the prospect of the acquisition of further reserves," he said. "I'd much rather have reserves than earnings any day because reserves can turn into earnings and earnings can turn into an empty shell. Earnings will come from reserves, not the other way around."
Benchmark coal prices have fallen 20 per cent this year on the back of tempered Chinese demand.
Mr Rogers pooh-poohs the effect of a Chinese slowdown on the Indonesian coal sector. "Markets fluctuate. I'm not in this for the short-term... Suppose China has a recession next week. I'm not bailing out of this and we're not going to stop mining coal because of temporary slowdowns."
He added: "I didn't choose coal, I chose this company, because I see possibilities and probabilities and prospects. If you come to me with a natural gas company, I might be a director too. If you come to me with a farm, I might too. It depends on the company and the people, more than the specific product. They obviously have insight and vision and brains."
Mr Melati, chairman of Geo Energy, described Mr Rogers' addition to the board as "exciting".
"He is well-known as the 'King of Commodities'. It will make a difference to us when we go to the banks for funding," he said.
Jim Rogers takes up his first SGX firm board seat.
Published December 04, 2012.
'Commodity King' joins recently listed Geo Energy as non-exec director
By Lynn Kan
Mr Rogers: 'We're investing in a new country (Indonesia), a new venture (coal mine) . . . But that's how you find opportunity and that's how you get rich.'
[SINGAPORE] Septuagenarian "Commodity King" Jim Rogers has found the first board seat in a Singapore-listed company that he would like to keep warm.
He was yesterday named a non-executive director of Geo Energy Resources, which debuted on the Singapore Exchange mainboard in October.
Mr Rogers, who rarely joins a board or owns shares, has not invested in Geo Energy yet, but said he will have a financial interest in it in the future.
"If I get there and find the mine is half underwater, I might change my mind. But I don't think I'm going to get there to find it's all under water," he said.
What Mr Rogers likes, Mr Rogers gets.
He was introduced to Geo Energy executive chairman and founder of Geo Energy, Charles Antonny Melati, through the company's IPO consultant Robert Lim, the mangaging director of Ellis Botsworth Advisory.
After a few meetings and doing his own homework - including a trip to Geo Energy's coal mine in East Kalimantan in two weeks' time - Mr Rogers said he was on board.
Acknowledging that not all will be perfect when investing in an Indonesian coal mine, he said what he was looking for was an opportunity: "If everything were perfect, the stock would be $6."
Geo Energy last closed at 35 cents, 2.5 cents above its offer price, when trading was halted last Friday.
"We're investing in a new country, a new venture. This is not investing in a fully developed coal mine in west Virginia in the US. But that's how you find opportunity and that's how you get rich."
Geo Energy's sole coal mining asset, PT Bumi Enggang Khatulistiwa (BEK), produced 445,000 tonnes of coal since bagging its first contract in February. It will hit 700,000 tonnes for the full year; next year, it estimates production to reach 2.3 million tonnes of coal, dwarfed by the likes of Indonesian coal miners such as Bumi Resources, which expects production to weigh in at 75 million this year, and 83 million tonnes next year.
DMG & Partners Research initiated coverage on the stock with a "sell" rating, unconvinced that the group's probable earnings growth could surmount downside risks like BEK's "low reserves" levels of 12.5 million tonnes and limited mine-life of six years.
But Mr Rogers clearly evaluates BEK's potential differently.
"Geo Energy has smart people and new reserves to be developed, and the prospect of the acquisition of further reserves," he said. "I'd much rather have reserves than earnings any day because reserves can turn into earnings and earnings can turn into an empty shell. Earnings will come from reserves, not the other way around."
Benchmark coal prices have fallen 20 per cent this year on the back of tempered Chinese demand.
Mr Rogers pooh-poohs the effect of a Chinese slowdown on the Indonesian coal sector. "Markets fluctuate. I'm not in this for the short-term... Suppose China has a recession next week. I'm not bailing out of this and we're not going to stop mining coal because of temporary slowdowns."
He added: "I didn't choose coal, I chose this company, because I see possibilities and probabilities and prospects. If you come to me with a natural gas company, I might be a director too. If you come to me with a farm, I might too. It depends on the company and the people, more than the specific product. They obviously have insight and vision and brains."
Mr Melati, chairman of Geo Energy, described Mr Rogers' addition to the board as "exciting".
"He is well-known as the 'King of Commodities'. It will make a difference to us when we go to the banks for funding," he said.
