Sunday, July 17, 2011

Back Ex-Hardman Directors on Jacka Resources

It was just over two weeks ago that Jacka Resources (JKA) announced that they were offered the exclusive negotiating rights over the Ruhuhu Basin (oil and gas) by the Tanzanian government.  When this announcement was made it definitely caught my eye and whilst the share price did spike I was surprised there was not more volume behind it and that it wasn't a bit stronger.  I decided to put the company on my watchlist.

We've had no news since.  Friday's (15/07/11) share price action suggests something is about to happen.  The stock price jumped $0.019 to $0.11 or 21% on strong volume of 3.8 million units.  Infact, that's the largest volume on the stock since listing in July last year.  From a technical perspective it breaks a downward trend that has seen the share price slide from $0.23 in october to a low of $0.067 in late June.

In the announcement that I refer to Jacka Resources mentioned that a product sharing agreement would be negotiated over the next few weeks so this may be coming to a conclusion soon.  I do like the fact that they mentioned they would be the 100% owner and importantly the operator giving them good control.  So is the stock price moving on the back of the pending agreement? 

Well there appears to be a lot more to like to Jacka Resources.  I am wondering if the market is starting to warm to the potential of this company?  DJ Carmichaels covered the company in October last year in a research report titled 'Upcoming Exploration and Appraisal Activity in Africa' and quoted a $1.36 unrisked upside target for the company.

It is also worth noting that the company has a market capitilisation of $9 million, recently completed an entitlement bringing $4.6 million into it's coffers and the number of shares on issue/free float is reasonably low.  The personnel involved with the company are also high profile with ex-Hardman Resources directors onboard including Richard Aden and Scott Spencer who built Hardman Resources into a $1.4 billion company before it was taken over.

Jacka Resources seems to tick many of the boxes.

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