Imperial Metals (IPM.T) Message Board

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Gold/Mining/Energy : Imperial Metals (IPM.T)

IPM 1.890

+0.5%

3:59 PM EST

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From: refugee investor	5/10/2010 1:42:02 PM
	of 1366

Crosspost re Leucadia: Here are my down and dirty LUK notes from this morning. The auditorium was not as full as last year. Ian Cumming (IMC) felt hot so he took off his jacket for the proceedings. He was his usual humorous self. I felt that both he and Joe Steinberg (JS), the more taciturn of the two, were more upbeat than last year. Indeed Joe was a lot more positive then in the 5 years I have been going to this meeting. Ian’s best answer was to the dividend question. (LUK used to have a $0.25 dividend). Short report 2009 would be the beginning of the recovery of something. It was a slighter recovery. Hopefully the repair will continue. If congress doesn’t continue acting like children in the sandbox I don’t know what will happen. Americans have lost faith in their elected officials. When will the Net Operating Losses (NOL) return to balance sheet? Joe Orland (CFO): If I have it my way, never. When will we start to see payments on the Fortescue (FMG) note? Complicated formula before we get paid on FMG note due to senior debt. The stock price was $54, sense of price now??IMC- Bubble was worth 30% of price so “knock down 55 by 30%” JS-Hope you’re right Tell us about the effect of the proposed 40% tax on FMG? IMC- CEO of FMG is a brilliant entrepreneur, not a brilliant manager. They are trying to boost their senior management. Last week he called the Australian Prime Minister a liar. 40% surtax is a complicated formula. Major mining companies will make an attempt at watering it down. JS-It has to pass through the Australian legislature. Current Sangart thoughts? IMC- It looks like the thing is real it has either no potential or huge potential. JS- It works but it may be a mousetrap that no one wants. The new management we installed after the founder suddenly died from a brain tumor went after lucrative niche markets. If it goes through clinical trials successfully then it has huge potential. Originally put in $20M now up to $150M. May bring in commercial partner in 12 months. It stopped being a blood substitute 3 years ago. Use as a blood expander, dumps O2 at end of microcirculation. Now called a “blood expander”. There were 3 competing products that killed people. We put it in a lot of Swedes and Poles and haven’t killed anybody. What’s the status of your Liquid Natural Gas projects? Tom Mara (President of LUK Energy) if you can make shell gas at $2/BTU we won’t make money. Capture CO2 and dispose in a safe and friendly way. IMC-30 year contracts with coal providers dump gas into utility in the state. I look at it as a bond. China outlook? IMC- I haven’t the faintest idea what a dictator will do. They shoot 5000 people/year in China. It will be a long time before China doesn’t need iron ore. There still are 700-800 million people still in the outback of China. Explain the Berkadia deal? JS: Warren Buffet asked us to come to the deal due to our talents of straightening out complicated companies. It’s a special servicer for commercial and multifamily loans - Not yet a durable business. It was a division of Capmark. Work being done to turn it into a business that sits on its own bottom. Are you planning on resuming a dividend? ?IMC-“These are rough times. You don’t look hungry.” What’s happening with ACF and auto financing? Rates went straight up. Unfortunately, ACF has to report its numbers publicly. One of these years the stupid banks will jump in. The securitization market is very strong. ACF has securitized over $60B no one has lost a cent. How is the copper mine doing? Mara: Running at 55% of commercial capacity. May hit 100% in August. Do you have the Berkshire problem of being too big?? IMC: No What do you foresee as a result of the Gulf oil leak? JS: Can impact Hard Rock and Destin condo rental businesses this year. Is there a time limit on the NOL’s? It’s about 20 years, we’l be long gone by the time they expire. The NOL’s can be used for sales of FMG ACF. Why did you get rid of IFIS? ?JS: The Cresud guy “enjoys leverage too much”. IMC: He and Andrew Forrest should get married. What’s the status of your commercial real estate? IMC: All shut down What’s the status of your Washington air rights? JS: Moving along getting project entitled, the see if there is any demand. IMC: It will cost $200M to build a concrete platform. It’s right across the street from the federal government that is always expanding and needing space. What is your succession plan? IMC- I think that we are making progress, but Joe doesn’t. Give us a sense on the durability of businesses??IMC: Potentially buying 4 businesses this year. What is the status of HomeFed? JS: Starting to sell lots to builders again @ 30% peak. Sell rest of inventory over next 2 years. HomeFed is fine. How do you feel about excess compensation at Jeffries? ?We made a significant investment. Whenever they give stock they have to buy it in the market. That way we are not diluted. When may we start seeing payments on the FMG note? JS; May start to get paid in July. IMC: Meanwhile, we are earning 9.5% interest on the unpaid royalties. Mungerian

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