- DJ Carmichaels has released a research report on Nimrodel Resources (NMR)
- Research report dated 15/12/2011
- Speculative Buy - 12 month target price $0.17
- NMR Last Traded Price: $0.048 (30/12/2011)
- Research link
Saturday, December 31, 2011
Nimrodel Resources (NMR) Research Report
Tuesday, November 8, 2011
Dragon Mountain Gold - Return of Capital?
Dragon Mountain Gold (DMG) today made an announcement that they were selling off their only asset, the Lixian Gold Project for a consideration of $175 million. Whilst Dragon Mountain Gold does not own 100% of the project being sold they estimate that of the $175 million that their share of the proceeds will be $150 million. DMG currently has a market capitilisation of about $93 million. It makes you left wondering, what's the catch? Investment opportunities like this do exist even, this one to the tune of $57 million.
Following the news the share price opened at $0.47 before racing to an intraday high of $0.495. Surprisingly, the stock only finished up $0.02 to $0.41. I think that this can be explained by the fact that there was a few insiders on this one that have made a quick buck and sold into the early strength today to take profits. After all, the stock has increased from about $0.29 late last month.
Whilst there is a few hurdles that remain such as approval from shareholders, Chinese government and Australian FIRB (a little strange considering the asset is in China) these hurdles seem like a formality.
DMG has hinted at completing a return of capital to shareholders. Superannuation Funds will be hoping it is a tax effective structure whereby a chunk of the return of capital is a fully franked dividend.
I expect the share price to appreciate as we lead up to the key dates.
Following the news the share price opened at $0.47 before racing to an intraday high of $0.495. Surprisingly, the stock only finished up $0.02 to $0.41. I think that this can be explained by the fact that there was a few insiders on this one that have made a quick buck and sold into the early strength today to take profits. After all, the stock has increased from about $0.29 late last month.
Whilst there is a few hurdles that remain such as approval from shareholders, Chinese government and Australian FIRB (a little strange considering the asset is in China) these hurdles seem like a formality.
DMG has hinted at completing a return of capital to shareholders. Superannuation Funds will be hoping it is a tax effective structure whereby a chunk of the return of capital is a fully franked dividend.
I expect the share price to appreciate as we lead up to the key dates.
Wednesday, September 21, 2011
It Works! - Coretrack Limited Technology
Coretrack Limited (CKK) shareholders have suffered a bit this year with the company share price on a steady downward trend. The share price hit a rolling year low of $0.071 last month but today shareholders received some excellent news.
The company is focusing on developing it's Core Level Recorder System (CLRS) technology which is used when drilling holes for oil and gas. Basically, the technology sends a signal to the surface advising the driller if the sample being collected has been jammed in the hole. This can result in significant cost savings because as it stands if the driller suspects that sample has been jammed he/she can only remove the drill and check or take a punt and continue to drill deeper. With drigs in short supply and the equipment expensive, the use of this technology could go a long way in solving the problem explained.
Today, the company claimed that the technology managed to measure core intake for the entire drill hole at the Noblige 2 deep water well operated by Woodsie Petroleum (WPL). Whilst this is early days and only one trial this is a big step for the company in proving it's technology.
CKK shares finished up $0.012 to $0.105 on 2.5million units traded.
The company is focusing on developing it's Core Level Recorder System (CLRS) technology which is used when drilling holes for oil and gas. Basically, the technology sends a signal to the surface advising the driller if the sample being collected has been jammed in the hole. This can result in significant cost savings because as it stands if the driller suspects that sample has been jammed he/she can only remove the drill and check or take a punt and continue to drill deeper. With drigs in short supply and the equipment expensive, the use of this technology could go a long way in solving the problem explained.
Today, the company claimed that the technology managed to measure core intake for the entire drill hole at the Noblige 2 deep water well operated by Woodsie Petroleum (WPL). Whilst this is early days and only one trial this is a big step for the company in proving it's technology.
CKK shares finished up $0.012 to $0.105 on 2.5million units traded.
Tuesday, September 20, 2011
Jacka Resources Trading Halt
It's been just over two months since I first posted about Jacka Resources (JKA). Since then there has been a lack of newsflow. A few days after I posted about the company the stock price hit a high of $0.14 before that price spike was arrested after a 'please explain' from the ASX. The share price since then has been weak along with the rest of the market.
The company went into trading halt yesterday and is due to release an announcement tomorrow regarding a 'Head of Agreement for a strategic asset transaction'. It will definitely be one to keep an eye on over the next few days.
The company went into trading halt yesterday and is due to release an announcement tomorrow regarding a 'Head of Agreement for a strategic asset transaction'. It will definitely be one to keep an eye on over the next few days.
Thursday, July 28, 2011
Liberty Resources Research Report
- RB Milestone Group has released a research report on Liberty Resources (LBY)
- Research report dated 14/07/2011
- Target price: $1.03
- LBY Last Traded Price: $0.087 (28/07/2011)
- Research link
Wednesday, July 27, 2011
Mineral Sands still popular: MRC shares surge
At the start of this year I discussed in a post how I thought that Mineral Sands such as Zircon were going to be in high demand due to the needs of China for this ingredient for ceramics. Iluka Resources (ILU), the heavyweight of the section, at the time was $8.90. Since then the company has provided bullish forecasts, confirmed improved prices for Zircon an Rutile and had excellent broker coverage. The stock today closed at $18.70 and Goldman Sachs has a price target of $21.
The other two companies I mentioned have been varied. Gunson Resources (GUN) was $0.24 when mentioned and now $0.185 whilst Base Resources (BSE) has improved from $0.425 to $0.575 today. BSE is currently in trading halt pending a capital raising.
Today we saw that the sector is still popular. Mineral Commodities (MRC) jumped $0.061 to $0.16 today on turnover of 5.1 million units. The company currently has two interests in South African mineral sands projects however today the company announced that it was to acquire further projects in Western Australia.
MRC will purchase Cable Sands from Cristal, has first right of refusal to buy further tenements from Cristal in the Murray basin and is also establishing a processing agreement with Cristal. MRC is also looking at purchasing Simto in an independent transaction.
MRC currently has a market cap of about $23 million. It is acquiring Cable Sands for $96 million. It seems very ambitious. $35 million will be financed through vendor financing with Cristal. MRC intends to raise the remaining funds through institutional investors.
Existing shareholders of the company and those buying on market currently will hope that the capital raising occurs at a high price and that they are not diluted heavily. I believe that if the company pulls this all off it will be a company making deal. The company will have scale and they claim it will be the second largest producer in Australia. It is quite possible then that predators may start sniffing around.
The other two companies I mentioned have been varied. Gunson Resources (GUN) was $0.24 when mentioned and now $0.185 whilst Base Resources (BSE) has improved from $0.425 to $0.575 today. BSE is currently in trading halt pending a capital raising.
Today we saw that the sector is still popular. Mineral Commodities (MRC) jumped $0.061 to $0.16 today on turnover of 5.1 million units. The company currently has two interests in South African mineral sands projects however today the company announced that it was to acquire further projects in Western Australia.
MRC will purchase Cable Sands from Cristal, has first right of refusal to buy further tenements from Cristal in the Murray basin and is also establishing a processing agreement with Cristal. MRC is also looking at purchasing Simto in an independent transaction.
MRC currently has a market cap of about $23 million. It is acquiring Cable Sands for $96 million. It seems very ambitious. $35 million will be financed through vendor financing with Cristal. MRC intends to raise the remaining funds through institutional investors.
Existing shareholders of the company and those buying on market currently will hope that the capital raising occurs at a high price and that they are not diluted heavily. I believe that if the company pulls this all off it will be a company making deal. The company will have scale and they claim it will be the second largest producer in Australia. It is quite possible then that predators may start sniffing around.
Sunday, July 24, 2011
Central Petroleum Research Report
- Bakers Investment Group has released a research report on Central Petroleum (CTP) with a Strong Buy Recommendation
- Research report dated 15/07/2011
- Valuation: $0.48 per share
- CTP Last Traded Price: $0.078 (22/07/2011)
- Research link
Wednesday, July 20, 2011
TPL Corporation: Uncanny Resemblance to TVN Corporation
TVN Corporation (TVN) was one company that I covered in my ASX Shell Play series back in February this year. I was sceptical of the possible future returns and the stock price at the time was a measly $0.011. A lot can happen in a few months. Since mentioning the company it has managed to enter into an options agreement to acquire the Nurrst Thermal Coal project in Mongolia, sink a drill and hit a significant intercept. The share price last traded at $0.071, up 27% today on 133 million units. It's a popular stock, no doubt, with plenty of investors having made excellent returns.
Today I managed to come across TPL Corporation (TPL) which has striking similarities. The similarities almost make me wonder if TPL is a no brainer?
TPL has an internet based business in the form of Total Hits, much like TVN has it's own internet marketing business however I don't think that we will be hearing much more of these bussinesses going forward (take a look at the TVN retail store, what a basket case!). Both companies also share the same address and personnel being Hugh Warner and Neil Hackett. I am pretty sure that the two companies would be sharing information. TPL has made it it's intensions clear by stating 'TPL is also pursuing a strategy of evaluating and targeting potential high quality coal assets for acquisition in Mongolia.'
TVN currently has a market capitilisation of $33 million compared to TPL's $12 million. TPL today closed at $0.023.
I believe that those that have realised excellent profits on TVN will naturally switch these funds to it's little brother TPL awaiting the next project to be vended into TPL. Don't forget - Mongolia is the place to be!
Today I managed to come across TPL Corporation (TPL) which has striking similarities. The similarities almost make me wonder if TPL is a no brainer?
TPL has an internet based business in the form of Total Hits, much like TVN has it's own internet marketing business however I don't think that we will be hearing much more of these bussinesses going forward (take a look at the TVN retail store, what a basket case!). Both companies also share the same address and personnel being Hugh Warner and Neil Hackett. I am pretty sure that the two companies would be sharing information. TPL has made it it's intensions clear by stating 'TPL is also pursuing a strategy of evaluating and targeting potential high quality coal assets for acquisition in Mongolia.'
TVN currently has a market capitilisation of $33 million compared to TPL's $12 million. TPL today closed at $0.023.
I believe that those that have realised excellent profits on TVN will naturally switch these funds to it's little brother TPL awaiting the next project to be vended into TPL. Don't forget - Mongolia is the place to be!
Tuesday, July 19, 2011
Shale Gas Boom!
There's a lot of companies with strong balance sheets following capital raisings during the GFC. These companies have also been very prudent with their spending. The market has been weak with the S&P/ASX 200 (XJO) dropping 10% since it's high in April leaving many share prices battered especially for the small to mid cap companies.
These two factors are a great cocktail for Mergers & Acquisitions (M&A). The acquirers have excess funds whilst the targets have a weak share price. This has proven true with announcements of Santos (STO) making an all scrip offer for Eastern Star Gas (ESG) whilst Hanlong Mining Investement Pty Ltd launching a conditional takeover bid for Sundance Resources (SDL).
The takeover announcement that has piqued my interest is the $USD15.1 billion takeover offer by BHP Billiton (BHP) for shale gas play Petrohawk. The announcement comes after BHP advised the market earlier in the year that they were aquiring Chesapeake Fayetteville USA Shale Assets. BHP is signalling that this is going to be an area of great value in the future.
Shale Gas is in it's infancy in Australia but that is about to change. The big boys are about to make their move and ConocoPhilips has done so first by way of a non-binding farm in agreement with New Standard Energy (NSE). The agreement is hoping to see ConocoPhilips spend up to $USD109.5 million on four stages of exploration work on the Goldwyer Project in the Canning Basin. See: A Fracking good deal on Aussie shale gas (The Australian).
Some of the different shale gas plays on the ASX and their respective basins include:
Adelaide Energy (ADE) - Cooper
AWE (AWE)- Perth
Baraka (BKP) - Georgina
Beach Energy (BPT) - Cooper
Buru Energy (BRU) - Canning
Drillsearch (DLS) - Cooper
Emerald (EMR)- Canning
Empire Oil (EGO) - Perth/Canning
Exoma (EXE) - Galilee
Icon Energy (ICN) - Cooper
New Standard (NSE) - Canning
NorWest (NEW) - Perth
Oil Basins (OBL) - Canning
Origin Energy (ORG) - Cooper/Perth
Santos (STO) - Cooper
Senex (SXY) - Cooper
Strike Energy (STX) - Cooper
Transerv (TSV) - Perth
Rather than reinvent the wheel and discuss these companies I did manage to locate an excellent report published by Morgan Stanley titled 'Australia Oil & Gas - Shale Gas: Grab a Surfboard...' It is definitely worth a read.
Interestingly enough, today the share price of EGO shot up $0.003 to $0.029 on large volume of 146 million units. The company responded to an ASX speeding ticket advising that there was no explanation to the share price action.
Whilst there is still much risk in Australia for Shale Gas there definitely is great reasons to have an exposure to this promising sector.
These two factors are a great cocktail for Mergers & Acquisitions (M&A). The acquirers have excess funds whilst the targets have a weak share price. This has proven true with announcements of Santos (STO) making an all scrip offer for Eastern Star Gas (ESG) whilst Hanlong Mining Investement Pty Ltd launching a conditional takeover bid for Sundance Resources (SDL).
The takeover announcement that has piqued my interest is the $USD15.1 billion takeover offer by BHP Billiton (BHP) for shale gas play Petrohawk. The announcement comes after BHP advised the market earlier in the year that they were aquiring Chesapeake Fayetteville USA Shale Assets. BHP is signalling that this is going to be an area of great value in the future.
Shale Gas is in it's infancy in Australia but that is about to change. The big boys are about to make their move and ConocoPhilips has done so first by way of a non-binding farm in agreement with New Standard Energy (NSE). The agreement is hoping to see ConocoPhilips spend up to $USD109.5 million on four stages of exploration work on the Goldwyer Project in the Canning Basin. See: A Fracking good deal on Aussie shale gas (The Australian).
Some of the different shale gas plays on the ASX and their respective basins include:
Adelaide Energy (ADE) - Cooper
AWE (AWE)- Perth
Baraka (BKP) - Georgina
Beach Energy (BPT) - Cooper
Buru Energy (BRU) - Canning
Drillsearch (DLS) - Cooper
Emerald (EMR)- Canning
Empire Oil (EGO) - Perth/Canning
Exoma (EXE) - Galilee
Icon Energy (ICN) - Cooper
New Standard (NSE) - Canning
NorWest (NEW) - Perth
Oil Basins (OBL) - Canning
Origin Energy (ORG) - Cooper/Perth
Santos (STO) - Cooper
Senex (SXY) - Cooper
Strike Energy (STX) - Cooper
Transerv (TSV) - Perth
Rather than reinvent the wheel and discuss these companies I did manage to locate an excellent report published by Morgan Stanley titled 'Australia Oil & Gas - Shale Gas: Grab a Surfboard...' It is definitely worth a read.
Interestingly enough, today the share price of EGO shot up $0.003 to $0.029 on large volume of 146 million units. The company responded to an ASX speeding ticket advising that there was no explanation to the share price action.
Whilst there is still much risk in Australia for Shale Gas there definitely is great reasons to have an exposure to this promising sector.
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.
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.
Thursday, July 14, 2011
Raisama Limited Research Report
- Patersons Securities has released a research note on Raisama Limited (RAI) with a Speculative Buy
- Research report dated 12/07/2011
- Target Price: $0.23
- RAI Last Traded Price: $0.12 (14/07/2011)
- Research link
Saturday, July 9, 2011
TNG Limited Research Report
- Old Park Lane Capital has released a research report on TNG Limited (TNG) with a buy recommendation
- Research report dated 07/07/2011
- Short Term Target Price: $0.27
- TNG Last Traded Price: $0.095 (08/07/2011)
- Research link
Wednesday, June 29, 2011
No afternoon sell off today!
The ASX 200 finished up 55.2 points to 4529.5 and it was good to see that for the first afternoon in almost a week that it didn't get sold down!
It meant that the small end of the market saw some risk money coming into it and quite a few winners. I couldn't help but notice yesterday the price and volume spike in C @ Limited (CEO) shares, up almost 18% on 16 million units traded. Yesterday's trading action proved the leaky ship with the company today announcing that coal seams were intersected from two holes drilled at it's Mongolian licences. The stock was up 33%.
Energio Limited (EIO) also had good gains today with it's shares up $0.005 to $0.036 on 17.6 million units. News flow should be good in the next few weeks with samples from it's Agbaja Plateau due. Anticipation of these results could enable a short term trade in the lead up.
Finally, the share price drop in Vmoto Limited (VMT) has been arrested after the ASX issued a (reverse) speeding ticket enquiring as to why the price had dropped from $0.022 to $0.015 from Monday to Tuesday. The company could provide no explanation and based on that the market assumed there is no bad news around the corner and marked the price up.
It meant that the small end of the market saw some risk money coming into it and quite a few winners. I couldn't help but notice yesterday the price and volume spike in C @ Limited (CEO) shares, up almost 18% on 16 million units traded. Yesterday's trading action proved the leaky ship with the company today announcing that coal seams were intersected from two holes drilled at it's Mongolian licences. The stock was up 33%.
Energio Limited (EIO) also had good gains today with it's shares up $0.005 to $0.036 on 17.6 million units. News flow should be good in the next few weeks with samples from it's Agbaja Plateau due. Anticipation of these results could enable a short term trade in the lead up.
Finally, the share price drop in Vmoto Limited (VMT) has been arrested after the ASX issued a (reverse) speeding ticket enquiring as to why the price had dropped from $0.022 to $0.015 from Monday to Tuesday. The company could provide no explanation and based on that the market assumed there is no bad news around the corner and marked the price up.
Wednesday, June 22, 2011
Today's roundup
The market closed up for a second day in a row today with the S&P 200 up 24.4 points to 4532.6 after being up 57 points earlier. It appears that the bears still concerned about Greece took opportunities to sell down into the spike.
A raft of juniors were up off their lows after the market sell off in the past week. These included Bannerman Resources (BMN), up $0.03 to $0.25 and Greenland Minerals & Energy (GGG) up $0.07 to $0.615 on good volume of 2.1 million units.
Murchison Metals (MMX) and Gindalbie Metals (GBG) were both strong after in an interview the QR National (QRN) CEO advised it would invest in the Oakajee Port and Rail project should the existing partners not be able to complete the project. MMX as a partner in the project is expecting cost blowouts.
MMX went into notice received at 3:47pm and the stock did not reopen/participate in the closing auction.
A raft of juniors were up off their lows after the market sell off in the past week. These included Bannerman Resources (BMN), up $0.03 to $0.25 and Greenland Minerals & Energy (GGG) up $0.07 to $0.615 on good volume of 2.1 million units.
Murchison Metals (MMX) and Gindalbie Metals (GBG) were both strong after in an interview the QR National (QRN) CEO advised it would invest in the Oakajee Port and Rail project should the existing partners not be able to complete the project. MMX as a partner in the project is expecting cost blowouts.
MMX went into notice received at 3:47pm and the stock did not reopen/participate in the closing auction.
Saturday, June 18, 2011
MetroCoal Limited Research Report
- RBS Morgans has released a research report on MetroCoal Limited (MTE)
- Research report dated 15/06/2011
- Target Price: $1
- MTE last trade: $0.595 (17/06/2011)
- Research link
Thursday, June 16, 2011
Market Commentary
The market tanked almost 2% today with the S&P 200 dropping 88 points to 4479. Sentiment is poor and whilst it doesn't bode well for small cap stocks for those that are taking a longer term view it could be a good time to top up on some of your favourite cheapies.
Movers for today included NSL Consolidated (NSL), Empire Oil & Gas (EGO) and Enterprise Metals (ENT). NSL whilst focusing on iron ore projects in India moved on the news that it was acquiring thermal coal projects in Queensland as the opportunity presented to them was too good to refuse. Shares finished up $0.01 to $0.055.
EGO was one for the traders (and always has been) as it's shares spiked 22% to $0.028, with 231 million units changing hands. The company announced it was in discussions on a forward sales gas contract with Alcoa.
ENT received a speeding ticket from the ASX after it's shares improved from $0.20 to a high of $0.245 today. Volume wasn't exceptionally high so it makes you wonder if the surveillance division is a litte bored at the moment with the spec end of the market quiet. The company cited no reasons for the share price increase. One of the directors recently purchased a small parcel of shares on market.
Movers for today included NSL Consolidated (NSL), Empire Oil & Gas (EGO) and Enterprise Metals (ENT). NSL whilst focusing on iron ore projects in India moved on the news that it was acquiring thermal coal projects in Queensland as the opportunity presented to them was too good to refuse. Shares finished up $0.01 to $0.055.
EGO was one for the traders (and always has been) as it's shares spiked 22% to $0.028, with 231 million units changing hands. The company announced it was in discussions on a forward sales gas contract with Alcoa.
ENT received a speeding ticket from the ASX after it's shares improved from $0.20 to a high of $0.245 today. Volume wasn't exceptionally high so it makes you wonder if the surveillance division is a litte bored at the moment with the spec end of the market quiet. The company cited no reasons for the share price increase. One of the directors recently purchased a small parcel of shares on market.
Saturday, May 28, 2011
Transit Holdings Research Report
- Taylor Collison has released a research report on Transit Holdings (TRH)
- Research report dated 25/05/2011
- TRH last trade: $0.805 (28/05/2011)
- Research link
Wednesday, May 11, 2011
Red October Resources - Good Recipe?
One company that did catch my eye today was Red October Resources (ROS). The company only listed on the ASX on Monday and closed at $0.295, an excellent premium on it's issue price of $0.20.
Today the share price improved further and closed up $0.07 to $0.37 on higher volumes (over one million units today compared to less than 500,000 yesterday and the day before). ROS raised $4.5 million in the float and it's only project is via a farm in agreement on a nickel (and other minerals) project with Segue Resources (SEG). SEG has in my opinion been a bit of a cellar dwellar and underperforming company for some time.
ROS doesn't seem to have too much going for it now however I'm more interested in it's potential. Today the company made an announcement which gave us some hint as to what is on the cards. The prospectus advised us that the company was pursuing new projects in resources sector in Australia and abroad. Now, today we received the news that the company is focussing on Kazakhstan and has been offered Gold, Silver, Tin, Copper, Manganese, Platinum, Iron Ore and Potash projects.
The announcement was clever in that it served a purpose of letting the market know what the company was about and intending to do especially for those who hadn't heard of this new listing. In my opinion the farm in agreement with SEG is really just a cover, a way for the company to get a listing approved by the ASX (the ASX wouldnt approve listing of a company that didnt have any assets, yet.). After the news the buyers started coming.
I think that this one is a good recipe. Low shares on issue will allow for share price increases to be exaggerated and less sellers to come onto the market and hold the price down. Those wishing to realise their stag profits may have done so already in the last couple of days. The speculation and anticipation of what may be vended in will drive the share price. Does this remind you of anything???...
Fortis Mining (FMJ) listed in December last year. The company announced early in February the intention to acquire a 'world class' potash asset (02/02/2011 Share price $0.38), late February FMJ signs head of agreement to acquire potash assets in Kazakhstan (23/02/2011 Share price $1.49) and then the share price hits a high of $3.98 on 03/03/2011.
Today the share price improved further and closed up $0.07 to $0.37 on higher volumes (over one million units today compared to less than 500,000 yesterday and the day before). ROS raised $4.5 million in the float and it's only project is via a farm in agreement on a nickel (and other minerals) project with Segue Resources (SEG). SEG has in my opinion been a bit of a cellar dwellar and underperforming company for some time.
ROS doesn't seem to have too much going for it now however I'm more interested in it's potential. Today the company made an announcement which gave us some hint as to what is on the cards. The prospectus advised us that the company was pursuing new projects in resources sector in Australia and abroad. Now, today we received the news that the company is focussing on Kazakhstan and has been offered Gold, Silver, Tin, Copper, Manganese, Platinum, Iron Ore and Potash projects.
The announcement was clever in that it served a purpose of letting the market know what the company was about and intending to do especially for those who hadn't heard of this new listing. In my opinion the farm in agreement with SEG is really just a cover, a way for the company to get a listing approved by the ASX (the ASX wouldnt approve listing of a company that didnt have any assets, yet.). After the news the buyers started coming.
I think that this one is a good recipe. Low shares on issue will allow for share price increases to be exaggerated and less sellers to come onto the market and hold the price down. Those wishing to realise their stag profits may have done so already in the last couple of days. The speculation and anticipation of what may be vended in will drive the share price. Does this remind you of anything???...
Fortis Mining (FMJ) listed in December last year. The company announced early in February the intention to acquire a 'world class' potash asset (02/02/2011 Share price $0.38), late February FMJ signs head of agreement to acquire potash assets in Kazakhstan (23/02/2011 Share price $1.49) and then the share price hits a high of $3.98 on 03/03/2011.
Thursday, April 28, 2011
Speewah Metals Research Report
- Alpha Securities has released a research report on Speewah Metals (SPM)
- Research report dated 21/04/2011
- SPM last trade: $0.28 (28/04/2011)
- Research link
Sunday, April 17, 2011
Shell Play Update: Olea Australis
Olea Australis (OLE) is a company that has featured a few times in the shell play stocks that I have been posting about over the last few months. The company finally has vended in resource projects and gone down what has been a popular path in the last year - West African Gold.
The company made an announcement late on Thursday before trading commenced again on Friday morning. In what has been some time in the making the company is acquiring two other companies both of which are in the process of acquiring ground in Ghana and Cote d'Ivoire. The problem is recently there has been unrest and political problems in Cote d'Ivoire with the country almost going into civil war.
The response to the announcement by the market was poor. Infact the shares barely traded as they were pushed down from $0.003 to $0.002. I am mixed on this one - positively, it is a case of out with the old and in with the new with the OLE staff to step down and Tim Fry to join as the Chairman. This is a good scalp as he has excellent experience from working with Lihir Gold. On the other hand the political conditions in the country and time that the company will be suspended to comply with Chapter 1 and 2 listing rules with the ASX will put some investors off (no trading for up to three months).
If anything, the shares are at rock bottom. I tend to think that it is a matter of touching base with this one at a later date, that is, September when the acquisitions have been bedded down.
The company made an announcement late on Thursday before trading commenced again on Friday morning. In what has been some time in the making the company is acquiring two other companies both of which are in the process of acquiring ground in Ghana and Cote d'Ivoire. The problem is recently there has been unrest and political problems in Cote d'Ivoire with the country almost going into civil war.
The response to the announcement by the market was poor. Infact the shares barely traded as they were pushed down from $0.003 to $0.002. I am mixed on this one - positively, it is a case of out with the old and in with the new with the OLE staff to step down and Tim Fry to join as the Chairman. This is a good scalp as he has excellent experience from working with Lihir Gold. On the other hand the political conditions in the country and time that the company will be suspended to comply with Chapter 1 and 2 listing rules with the ASX will put some investors off (no trading for up to three months).
If anything, the shares are at rock bottom. I tend to think that it is a matter of touching base with this one at a later date, that is, September when the acquisitions have been bedded down.
Wednesday, April 13, 2011
Mozambi Coal Coverage
I recently posted about Mozambi Coal and it's potential.
It appears that there is a few people taking notice of this company and it yesterday received coverage by Proactive Investors Australia, definitely a good sign and positive for the stock. The article can be found here.
From my observations of the stock in morning it appears that there is a persistent buyer on open which one can only assume is Polo Resources increasing it's position in the company.
It appears that there is a few people taking notice of this company and it yesterday received coverage by Proactive Investors Australia, definitely a good sign and positive for the stock. The article can be found here.
From my observations of the stock in morning it appears that there is a persistent buyer on open which one can only assume is Polo Resources increasing it's position in the company.
Diatreme Resources Research Report
- Intersuisse has released a research report on Diatreme Resources (DRX)
- Research report dated 12/04/2011
- NPV based valuation: $0.30
- DRX last trade: $0.094 (13/04/2011)
- Research link
Tuesday, April 12, 2011
Transit Holdings Research Report
- RM Research has released a research report on Transit Holdings (TRH)
- Research report dated 08/04/2011
- Short term price target: $1
- TRH last trade: $0.50 (12/04/2011)
- Research link
Thursday, April 7, 2011
Mozambi Coal: Riversdale nearology
I couldn't help but notice the volumes traded on Mozambi Coal (MOZ) the last few days. The ASX noticed also and issued a price query accordingly on Tuesday (05/04) quoting the stock price rise from $0.25 on 31/03 to $0.33 on 05/04. The company advised they had no explanation for the share price rise.
Mozambit Coal is a stock that I have followed for some time. For those that follow my blog you will have noticed that I do like to investigate shell companies and this was one of them. Back in the day the company used to hire out dump trucks and had a syringe-type technology (from memory), a strange combination, under the name RTL Corporation (RTL).
This is all before the company acquired coal basin deposits in Mozambique. By way of acquiring Dugal Pty Ltd the company has acquired two licences including one with ground of 172 square km adjacent to the Riversdale Mining (RIV) block. Mozambi Coal was suspended for a number of months whilst it complied with ASX compliance rules that apply when a company has a major change in activities. Before going off the boards the stock was trading at $0.022.
One of the key points here is that whilst the company was complying with listing rules Rio Tinto (RIO) launched a takeover bid for Riversdale Mining (RIV), proving and increasing the value of other tenements in the area. MOZ shares were reconstructed and when they commenced trading again at the start of March they were at $0.35 or $0.035 equivalent. That's quite a success for those that purchased before the stock before it was suspended. Since then the shares weakened which would probably be as a result of some old stale shareholders finally moving on and the whole Japan earthquake crisis.
Things are now definitely starting to hot up. I think that word is getting around about the potential of this stock. The recent share price gain could also be explained by the fact that TSX listed company Polo Resources has become a substantial shareholder (11%). The company advertises itself as "a natural resources investment company focused on investing in undervalued companies and projects with strong fundamentals and attractive growth prospects." Polo Resources has made excellent gains in other investments such as Extract Resources (EXT) and Caledon Resources (CCD).
MOZ closed at $0.355 today after hitting a high of $0.40.
Buy on dips.
Mozambit Coal is a stock that I have followed for some time. For those that follow my blog you will have noticed that I do like to investigate shell companies and this was one of them. Back in the day the company used to hire out dump trucks and had a syringe-type technology (from memory), a strange combination, under the name RTL Corporation (RTL).
This is all before the company acquired coal basin deposits in Mozambique. By way of acquiring Dugal Pty Ltd the company has acquired two licences including one with ground of 172 square km adjacent to the Riversdale Mining (RIV) block. Mozambi Coal was suspended for a number of months whilst it complied with ASX compliance rules that apply when a company has a major change in activities. Before going off the boards the stock was trading at $0.022.
One of the key points here is that whilst the company was complying with listing rules Rio Tinto (RIO) launched a takeover bid for Riversdale Mining (RIV), proving and increasing the value of other tenements in the area. MOZ shares were reconstructed and when they commenced trading again at the start of March they were at $0.35 or $0.035 equivalent. That's quite a success for those that purchased before the stock before it was suspended. Since then the shares weakened which would probably be as a result of some old stale shareholders finally moving on and the whole Japan earthquake crisis.
Things are now definitely starting to hot up. I think that word is getting around about the potential of this stock. The recent share price gain could also be explained by the fact that TSX listed company Polo Resources has become a substantial shareholder (11%). The company advertises itself as "a natural resources investment company focused on investing in undervalued companies and projects with strong fundamentals and attractive growth prospects." Polo Resources has made excellent gains in other investments such as Extract Resources (EXT) and Caledon Resources (CCD).
MOZ closed at $0.355 today after hitting a high of $0.40.
Buy on dips.
Biota Holdings Research Note
- RBS Morgans has released a research note on Biota Holdings (BTA)
- Research note dated 06/04/2011
- 12 month price target: $2.02
- BTA last trade: $1.375 (07/04/2011)
- Research link
Wednesday, March 30, 2011
Big name on register of Red Fork Energy
At the start of March I posted about following the big boys and their investment decisions. One of the stocks that cracked a mention was Red Fork Energy (RFE). At the time of posting the share price was at $0.405 and weakening.
It now appears that the others are catching on to the likes of BHP Billiton (BHP) and the potential of shale gas in the US. George Soros, the billionaire investor, has taken a slice of Red Fork Energy through his investment fund. After the news the stock surged as high as $0.52 on the 25th of March and trading volumes over the last few weeks have been excellent.
Definitely a stock to keep an eye on.
Further details on the investment made by George Soros can be found at this link.
It now appears that the others are catching on to the likes of BHP Billiton (BHP) and the potential of shale gas in the US. George Soros, the billionaire investor, has taken a slice of Red Fork Energy through his investment fund. After the news the stock surged as high as $0.52 on the 25th of March and trading volumes over the last few weeks have been excellent.
Definitely a stock to keep an eye on.
Further details on the investment made by George Soros can be found at this link.
Sunday, March 13, 2011
Unilife Corporation Updated Broker Report
- Griffin Securities has released an updated broker report on Unilife Corporation (UNS)
- Report dated 10/03/2011
- 12 month price target $1.75 CDI's ($10.50 NASDAQ)
- UNS last trade: $0.74 (11/03/2011)
- Research link
Friday, March 11, 2011
Julia rings the bell (of destruction)
The irony. Our Prime Minister Julia Gillard rung the bells at the New York Stock Exchange last night. The DOW dropped almost 2%.
Everything that the government touches turns bad. I've read numerous articles the past week from Charlie Aitken to Coppo (Goldman Sach's trading desk daily memo) and they've been ruthless about the current government and it's decisions. It's partly because it is the 2 year anniversary of the bottom of the GFC and also partly because the ASX has been smacked 4% this week that all this negative commentary has been floating about.
The instos have been waiting for their opportunity to sell and with commodities prices hitting all time highs, the Aussie dollar still above parity with the US and the Middle Easy troubles it has been an easy decision to sell. This is coupled with the governments dangerous decisions regarding the resources super tax (which hurts all Australians, yes we all hold BHP and RIO through our superannuation fund) and carbon tax. It's no wonder that Australian companies are targeting and acquiring projects overseas. Africa used to have Sovereign risk but now we do!
There is a lot of fear in this market which unfortunately doesnt bode well for the small cap stocks that we follow. For those that are gutsy it may be a time to top up on your favourite stocks whose share prices have been hit by low liquidity (the lack of buyers forces prices down on low volumes). For others it may be a time to sit on the sidelines, not open any new positions and wait until the world settles down. Having said this, who knows when things will settle - Japan has just been struck by an earthquake so markets may get hit further tonight.
Everything that the government touches turns bad. I've read numerous articles the past week from Charlie Aitken to Coppo (Goldman Sach's trading desk daily memo) and they've been ruthless about the current government and it's decisions. It's partly because it is the 2 year anniversary of the bottom of the GFC and also partly because the ASX has been smacked 4% this week that all this negative commentary has been floating about.
The instos have been waiting for their opportunity to sell and with commodities prices hitting all time highs, the Aussie dollar still above parity with the US and the Middle Easy troubles it has been an easy decision to sell. This is coupled with the governments dangerous decisions regarding the resources super tax (which hurts all Australians, yes we all hold BHP and RIO through our superannuation fund) and carbon tax. It's no wonder that Australian companies are targeting and acquiring projects overseas. Africa used to have Sovereign risk but now we do!
There is a lot of fear in this market which unfortunately doesnt bode well for the small cap stocks that we follow. For those that are gutsy it may be a time to top up on your favourite stocks whose share prices have been hit by low liquidity (the lack of buyers forces prices down on low volumes). For others it may be a time to sit on the sidelines, not open any new positions and wait until the world settles down. Having said this, who knows when things will settle - Japan has just been struck by an earthquake so markets may get hit further tonight.
Tuesday, March 8, 2011
Shell Play Brief: Olea Australis
One of the ASX shell plays that I posted about recently was Olea Australis (OLE). I'm revisiting this one because the time frame for any action has now shortened or become clearer after the announcement made on 01/03/2011.
I have seen on occasions when the ASX will issue a query or 'please explain' to companies that have held cash and little in the way of a business activity or any assets for an extended period of time. An example that comes to mind was Wavenet International (WAL) which held cash for ages and received this query. This was an excellent example of a shell play that has seen the stock rise from $0.08 to $0.60 after vending in coal assets.
If you get a moment I would recommend reading the response made by OLE to the ASX. The company has stated 'the directors have held preliminary discussions with at least ten parties interested in Olea as a basis for a transaction for a listing on the ASX' In lamens terms this means backdoor listing another company.
OLE proceeds to advise that none of these discussions are advanced enough to warrant further disclosure. The company does however state that 'the directors anticipate that OLE would be in a position to demonstrate to the ASX within four months that it is compliant with listing rules 12.1 and 12.3' In other words OLE will be making some form of announcement in regards to this back door listing within 4 months - we now have a clear timeframe!
I have seen on occasions when the ASX will issue a query or 'please explain' to companies that have held cash and little in the way of a business activity or any assets for an extended period of time. An example that comes to mind was Wavenet International (WAL) which held cash for ages and received this query. This was an excellent example of a shell play that has seen the stock rise from $0.08 to $0.60 after vending in coal assets.
If you get a moment I would recommend reading the response made by OLE to the ASX. The company has stated 'the directors have held preliminary discussions with at least ten parties interested in Olea as a basis for a transaction for a listing on the ASX' In lamens terms this means backdoor listing another company.
OLE proceeds to advise that none of these discussions are advanced enough to warrant further disclosure. The company does however state that 'the directors anticipate that OLE would be in a position to demonstrate to the ASX within four months that it is compliant with listing rules 12.1 and 12.3' In other words OLE will be making some form of announcement in regards to this back door listing within 4 months - we now have a clear timeframe!
Sunday, March 6, 2011
Cobar Consolidated Resources Research Report
- Ord Minnett has revised it's research on Cobar Consolidated Resources (CCU) with Buy recommendation
- Report dated 01/03/2011
- 12 month price target $1.20
- CCU last trade: $1.035 (04/03/2011)
- Research link
Mesoblast Research Report
- Southern Cross Equities has updated it's research on Mesoblast (MSB) with a Buy recommendation
- Report dated 03/03/2011
- 12 month price target increased from $7 to $11.
- MSB last trade: $6.33 (04/03/2011)
- Research link
Saturday, March 5, 2011
Leveraging off the Big Boys...
It's not too often that I mention the likes of BHP Billiton (BHP) or Newcrest Mining (NCM) but today is a different day. Having said that, NCM did manage to have an excellent day yesterday with a move up of $1.79 or a lazy 4.68% after a market update that included the doubling of an estimate at it's gold project in PNG.
So why do I mention the big boys when I am usually focused on the small cap minnows? We can learn a lot from these guys. After all, they have large teams of analysts, reasearchers and forecasters that can assess the future global trends in commodities. They are in the know and following their moves could be very successful.
To explain in simple terms, the most recent example is BHP Billiton and POSTASH. It started when they lobbed a hostile takeover offer towards Saskatchewan's Potash Corp. Suddenly there was a focus on the world food shortage and how potash and phosphates used in fertilisers were going to be in high demand in the agricultural sector. Every potash stock has run since including Souther Boulder (STB), Rum Jungle (RUM) and Reward Minerals (RWD). We've also seen Fortis Mining (FMJ) rush to an intraday high of $3.98 and be as volatile as I dont know what. General Mining (GMM), a company that may suffer from bad PR has a potash project in Mongolia however it had been overlooked, not til yesterday. That probably leaves only Transit Holdings (TRH) yet to go for a run and it's a pretty good bet that it will.
Anyway, enough of Potash as I've gone off on a bit of a tangent. So what are the next moves of the big boys that could give us some trading ideas in the small cap space?
BHP has now decided that it's next play is shale gas and it is going to spend just under $5 billion to purchase assets from Chesapeak in the US. An article detailing the deal can be found here. Gas prices in the US have been depressed for some time so I think that BHP is trying to get in early whilst projects can be acquired at basement prices. Analysts think that this is more of a long term strategy whilst waiting for gas prices to improve. Red Fork Energy (RFE) is a company that has shale gas assets in the US and like the prices for gas it's share price has been depressed for sometime. I couldn't help but notice the improvement in share price the last few days and the number of buyers around generally increase. A nice trend reversal too. RFE last traded at $0.405. Any readers that have companies in the same vein are welcome to post a comment suggesting them.
Back to NCM. I posted recently about the EU List of Critical Raw Materials and how it formed the basis for a substantial amount of research by me of late. Funnily enough, one of those materials is Tungsten and Newcrest mining has recently signed a deal with car giant Mitsubishi to supply tungsten! Newcrest's O'Callaghans tungsten project is gaining more focus and compared to BHP's shale gas possible focus NCM's play could be more of a short term winner. This puts the spotlight on other Aussie companies with an exposure to tungsten and I like Wolf Minerals (WLF), Vital Metals (VML) and Icon Resources (III).
Vital Metals has the largest market cap of the three and has somewhat been in the doldrums for some time. Things look like they are about to change. Not only have the trading volumes and interest in the stock improve however there has been changes at the board level so hopefully new blood can get the company back on track. The company has boasted in it's quarterly report that their Watershed tungsten project is gaining world wide attention so there could be some good news soon regarding some form of a deal. VML last traded at $0.14.
Icon Resources is currently rationalising it's projects including divesting projects to focus all it's efforts on the Mt Carbine tungsten project. It's shares last traded at $0.13 but suffers from a lack of trading and interest currently.
Finally, Wolf Minerals is only a newly listed company however their project in the UK is possibly the fourth largest owned by an Aussie company. With tin at all time high prices and also thrown into this project this company is one to definitely put on the watchlist also. It last traded at $0.375.
So why do I mention the big boys when I am usually focused on the small cap minnows? We can learn a lot from these guys. After all, they have large teams of analysts, reasearchers and forecasters that can assess the future global trends in commodities. They are in the know and following their moves could be very successful.
To explain in simple terms, the most recent example is BHP Billiton and POSTASH. It started when they lobbed a hostile takeover offer towards Saskatchewan's Potash Corp. Suddenly there was a focus on the world food shortage and how potash and phosphates used in fertilisers were going to be in high demand in the agricultural sector. Every potash stock has run since including Souther Boulder (STB), Rum Jungle (RUM) and Reward Minerals (RWD). We've also seen Fortis Mining (FMJ) rush to an intraday high of $3.98 and be as volatile as I dont know what. General Mining (GMM), a company that may suffer from bad PR has a potash project in Mongolia however it had been overlooked, not til yesterday. That probably leaves only Transit Holdings (TRH) yet to go for a run and it's a pretty good bet that it will.
Anyway, enough of Potash as I've gone off on a bit of a tangent. So what are the next moves of the big boys that could give us some trading ideas in the small cap space?
BHP has now decided that it's next play is shale gas and it is going to spend just under $5 billion to purchase assets from Chesapeak in the US. An article detailing the deal can be found here. Gas prices in the US have been depressed for some time so I think that BHP is trying to get in early whilst projects can be acquired at basement prices. Analysts think that this is more of a long term strategy whilst waiting for gas prices to improve. Red Fork Energy (RFE) is a company that has shale gas assets in the US and like the prices for gas it's share price has been depressed for sometime. I couldn't help but notice the improvement in share price the last few days and the number of buyers around generally increase. A nice trend reversal too. RFE last traded at $0.405. Any readers that have companies in the same vein are welcome to post a comment suggesting them.
Back to NCM. I posted recently about the EU List of Critical Raw Materials and how it formed the basis for a substantial amount of research by me of late. Funnily enough, one of those materials is Tungsten and Newcrest mining has recently signed a deal with car giant Mitsubishi to supply tungsten! Newcrest's O'Callaghans tungsten project is gaining more focus and compared to BHP's shale gas possible focus NCM's play could be more of a short term winner. This puts the spotlight on other Aussie companies with an exposure to tungsten and I like Wolf Minerals (WLF), Vital Metals (VML) and Icon Resources (III).
Vital Metals has the largest market cap of the three and has somewhat been in the doldrums for some time. Things look like they are about to change. Not only have the trading volumes and interest in the stock improve however there has been changes at the board level so hopefully new blood can get the company back on track. The company has boasted in it's quarterly report that their Watershed tungsten project is gaining world wide attention so there could be some good news soon regarding some form of a deal. VML last traded at $0.14.
Icon Resources is currently rationalising it's projects including divesting projects to focus all it's efforts on the Mt Carbine tungsten project. It's shares last traded at $0.13 but suffers from a lack of trading and interest currently.
Finally, Wolf Minerals is only a newly listed company however their project in the UK is possibly the fourth largest owned by an Aussie company. With tin at all time high prices and also thrown into this project this company is one to definitely put on the watchlist also. It last traded at $0.375.
Friday, March 4, 2011
WHL Energy Broker Report
- Hartleys has issued a research report on WHL Energy (WHN) with a Speculative Buy
- Report dated 03/03/2011
- 12 month price target $0.097
- WHN last trade: $0.047 (04/03/2011)
- Research link
Friday, February 25, 2011
Tantulum & Niobium - Australian-American Mining (AIW)
After reading about the EU 14 critical mineral raw materials report and posting about it the other day I've become really interested in these materials. It's resulted in me casting my eye over some of the ASX listed companies with an exposure to each of them.
One of the companies that has caught my attention is Australian-American Mining Corporation Limited (AIW). I will firstly state that the company is focusing on it's uranium assets in the US. This isn't a bad thing - the outlook for uranium in my opinion is very good and I'm almost on the verge of calling myself a uranium bull. Having said this, it is the specialty metals project in Arizona that has the potential for lithium, tantulum, niobium and rubidium which has piqued my interest.
The company has a lot going for it including an excellent cash backing of $7.127 million which means there will be no capital raisings and share dilution any time soon. They are also holding 3 million shares of Forge Resources (FRG) worth $4.08 million. That's a total of over $11 million in enterprise value (EV) not including all of their uranium, gold or rare earths projects - all this for a market cap of $23 million.
Anyway, back to the specialy metals project. The project acquired in November last year was done so via cash and scrip (shares). The cash amount was a nominal $25,000 whilst the scrip component was 3,000,000 shares. I always like to hear that the seller of a project is to receive stock. Why? This confirms that they still want some skin in the game and to have exposure of upside to the project indirectly by holding stock. AIW believes that the project has the potential to be of a large scale and with significant grades. They have also been able to access a large database of previous work which will help in targeting key areas.
AIW is intending to list on the TSX in March this year which is significant news. North American investors will value the projects of this company much higher than their Australian counterparts and this could result in a rerating of 8 - 10 times! I expect a nice appreciation in the share price in the lead up to this listing. If experience is anything, Prima Biomed (PRR) and it's listing on the NASDAQ was one test case (recommended at $0.125 in October, see post)
AIW shares spiked $0.009 to $0.073 today on very good volume of 9.2 million units. The market is awaiting drilling results on it's Apex uranium project so trading suggests this will be announced soon or there is some other newsflow around the corner.
One of the companies that has caught my attention is Australian-American Mining Corporation Limited (AIW). I will firstly state that the company is focusing on it's uranium assets in the US. This isn't a bad thing - the outlook for uranium in my opinion is very good and I'm almost on the verge of calling myself a uranium bull. Having said this, it is the specialty metals project in Arizona that has the potential for lithium, tantulum, niobium and rubidium which has piqued my interest.
The company has a lot going for it including an excellent cash backing of $7.127 million which means there will be no capital raisings and share dilution any time soon. They are also holding 3 million shares of Forge Resources (FRG) worth $4.08 million. That's a total of over $11 million in enterprise value (EV) not including all of their uranium, gold or rare earths projects - all this for a market cap of $23 million.
Anyway, back to the specialy metals project. The project acquired in November last year was done so via cash and scrip (shares). The cash amount was a nominal $25,000 whilst the scrip component was 3,000,000 shares. I always like to hear that the seller of a project is to receive stock. Why? This confirms that they still want some skin in the game and to have exposure of upside to the project indirectly by holding stock. AIW believes that the project has the potential to be of a large scale and with significant grades. They have also been able to access a large database of previous work which will help in targeting key areas.
AIW is intending to list on the TSX in March this year which is significant news. North American investors will value the projects of this company much higher than their Australian counterparts and this could result in a rerating of 8 - 10 times! I expect a nice appreciation in the share price in the lead up to this listing. If experience is anything, Prima Biomed (PRR) and it's listing on the NASDAQ was one test case (recommended at $0.125 in October, see post)
AIW shares spiked $0.009 to $0.073 today on very good volume of 9.2 million units. The market is awaiting drilling results on it's Apex uranium project so trading suggests this will be announced soon or there is some other newsflow around the corner.
Resource Generation (RES) Broker Report
- RBC Capital Markets has commenced coverage of Resource Generation (RES) with an Outperform
- Report dated 22/02/2011
- Price target $1
- RES last trade: $0.725 (25/02/2011)
- Research link
Thursday, February 24, 2011
EU List of Critical Raw Materials
As an investor that focuses mainly on the small to mid cap resources part of the market I am quite often using a top down approach to finding stocks to invest in. This involves seeking the latest trends that may result in demand in a particular resource increasing or supplies decreasing possibly due to disruptions to mines etc. A recent example of this includes the focus on oil stocks as a result of the current Middle East crisis, however I do prefer trying to discover which will be the next obscure hot metal!
One list that I have been working from lately is the Europa 14 critical mineral raw materials list which lists minerals and metals which are considered critical especially from a supply shortage perspective.
Whilst the report has been out for some time it is a good starting point for research purposes. Rare earths has been well covered so I am hoping to take a look at a few companies with an exposure to the other metals listed in the report share this with you soon.
One list that I have been working from lately is the Europa 14 critical mineral raw materials list which lists minerals and metals which are considered critical especially from a supply shortage perspective.
Whilst the report has been out for some time it is a good starting point for research purposes. Rare earths has been well covered so I am hoping to take a look at a few companies with an exposure to the other metals listed in the report share this with you soon.
Southern Boulder Mines Research Report
- Arrowhead Business & Investment Decisions has completed a Due Diligence and Valuation Report on Southern Boulder Mines (STB)
- Fair share value bracket: $6.25 - $29.95
- STB last trade: $4.77 (24/02/2011)
- Research link
Wednesday, February 23, 2011
Cbio Limited Research Report
- Wise-owl.com has issued a research report on Cbio Limited (CBZ) with a Spec Buy
- Price target $1.47
- PIR last trade: $0.59 (23/02/2011)
- Research link
Sunday, February 20, 2011
Advanced ASX Shell Plays
This is my final post exploring some of the shell plays listed on the ASX. In my earlier posts I took a look at those companies that are still a little unloved and well away from volumes being traded that mean anything. These next three shells that I take a look at today are what I would say are in the developed stage and possibly known to you for the reason that they are attracting interest and have seen some excellent gains from their lows already.
C @ LIMITED (CEO)
This company is probably as advanced as a shell can be. The market capitilisation is a staggering $17 million which means the share price is a bit overcooked considering no project has yet been acquired. The company has confirmed it's direction and advised the market it is specifically looking at coking coal projects in Mongolia. They currently have a team of geologists assessing licenses so a project may not be too far away. C @ Limited last traded at $0.037 after coming up from lows of just under a $0.01 in August last year. If anything, this goes to show that if you get in early there can be excellent gains to be made in shell companies. This stock was once unloved too - in August last year it went days without trading and when it did the volume was maybe 100,000 - 300,000 units.
SELECT VACCINES LIMITED (SLT)
This is another company that has already had strong share price gains with the share price appreciating from $0.002 in August to the current price of $0.011 giving the company a market cap of $12 million.
SLT has raised funds a few times last year to keep itself going whilst it searches for new opportunities. There has been no indication as to which direction the company is headed. The company appointed new directors in September who have experience in backdoor listings.
ROBE AUSTRALIA LIMITED (ROB)
ROB has been on the radar of quite a few traders recently. It has had a couple of share price breakouts resulting in share price queries (or speeding tickets) from the ASX. The company has given the standard response - we know nothing! The share price was seriously overbought when it hit $0.03 and it has since backed off to $0.016. The company used to operate stockbroking and wealth management businesses and provide corporate advisory services all of which have now been sold. Considering these businesses are all market related I would imagine that the board would have very good contacts in the industry which is a positive. After all, and from my experience in the industry, everyone knows everyone.
C @ LIMITED (CEO)
This company is probably as advanced as a shell can be. The market capitilisation is a staggering $17 million which means the share price is a bit overcooked considering no project has yet been acquired. The company has confirmed it's direction and advised the market it is specifically looking at coking coal projects in Mongolia. They currently have a team of geologists assessing licenses so a project may not be too far away. C @ Limited last traded at $0.037 after coming up from lows of just under a $0.01 in August last year. If anything, this goes to show that if you get in early there can be excellent gains to be made in shell companies. This stock was once unloved too - in August last year it went days without trading and when it did the volume was maybe 100,000 - 300,000 units.
SELECT VACCINES LIMITED (SLT)
This is another company that has already had strong share price gains with the share price appreciating from $0.002 in August to the current price of $0.011 giving the company a market cap of $12 million.
SLT has raised funds a few times last year to keep itself going whilst it searches for new opportunities. There has been no indication as to which direction the company is headed. The company appointed new directors in September who have experience in backdoor listings.
ROBE AUSTRALIA LIMITED (ROB)
ROB has been on the radar of quite a few traders recently. It has had a couple of share price breakouts resulting in share price queries (or speeding tickets) from the ASX. The company has given the standard response - we know nothing! The share price was seriously overbought when it hit $0.03 and it has since backed off to $0.016. The company used to operate stockbroking and wealth management businesses and provide corporate advisory services all of which have now been sold. Considering these businesses are all market related I would imagine that the board would have very good contacts in the industry which is a positive. After all, and from my experience in the industry, everyone knows everyone.
Tuesday, February 15, 2011
Early Stage ASX Shell Plays (part 2)
Let's continue our look at some of the ASX shell plays that are still in their infant stage with very little volumes being traded...
GEOTHERMAL RESOURCES (GHT)
This is probably the most riskiest of the shell plays that I am going to mention however one of the more different cases. The company is teetering on the edge with cash to the tune of $249,000 (Quarterly Report 30/11) and has had to minimise all expenditures to survive. The company has two geothermal projects in South Australia however due to the poor sentiment towards the sector and subsequent lack of funding the company has found itself in a position whereby it needs to branch out into other commodities to survive. Management are hoping by acquiring a project that is in a more 'sexy' sector that they will be able to raise funds. The company has stated:
"An alternative is to diversify Geothermal Resources exploration base into other commodities that have more immediate appeal and for which capital can be raised. This uses the Company’s exploration skills and could provide shareholders with more immediate returns whilst waiting for an improvement in the geothermal exploration investment climate. Directors are monitoring other investment opportunities, particularly in the precious and rare earth metals sector, and may act to secure a suitable opportunity if it presents itself."
Considering that the company has very little cash something is going to happen sooner rather than later, whether it be administration or a hot new project. GHT last traded at $0.09.
NEW AGE EXPLORATION (NAE)
I like this prospect. This is one of the more cashed up shells around with about $4.3million on hand so there is less pressure on management to vend in a project anytime soon. From my research it seems that an Iron Ore project will be the most likely kind of project to be acquired by the company. The company has been looking for a project for some time now (almost a year) so things are slow going however they nearly acquired an Iron Ore project in Spain. Negotiations for this Spanish project are unlikely to result in an outcome. NAE has an excellent MD in Gary Fietz who worked at BHP Billiton (BHP) in their Iron Ore division for 21 years. NAE last traded at $0.09.
ADVANCE ENERGY (AVD)
I believe that this company is about to move out of the early stage shell play category with the share price having mini breakouts every so often and trading volumes picking up. The stock price is becoming quite volatile also. There is good value here with the market capitilisation at $5 million and the company having $2.5 million on hand. Recently the company sold it's US oil well projects for $11.3 million which helped the company extinguish outstanding debts. What I find exciting is that the company's financier has allowed them to maintain a $40 million line of credit facility for future acquisitions! AVD last traded at $0.026.
TVN CORPORATION (TVN)
Unusally this company is maintaining it's internet marketing business whilst deciding a resources project might be a good way to 'diversify'. I am unsure what experice the management have in the resources sector and the tenement applications made tend to lack any detail or substance in the announcements made to the ASX. TVN last traded at $0.011
GEOTHERMAL RESOURCES (GHT)
This is probably the most riskiest of the shell plays that I am going to mention however one of the more different cases. The company is teetering on the edge with cash to the tune of $249,000 (Quarterly Report 30/11) and has had to minimise all expenditures to survive. The company has two geothermal projects in South Australia however due to the poor sentiment towards the sector and subsequent lack of funding the company has found itself in a position whereby it needs to branch out into other commodities to survive. Management are hoping by acquiring a project that is in a more 'sexy' sector that they will be able to raise funds. The company has stated:
"An alternative is to diversify Geothermal Resources exploration base into other commodities that have more immediate appeal and for which capital can be raised. This uses the Company’s exploration skills and could provide shareholders with more immediate returns whilst waiting for an improvement in the geothermal exploration investment climate. Directors are monitoring other investment opportunities, particularly in the precious and rare earth metals sector, and may act to secure a suitable opportunity if it presents itself."
Considering that the company has very little cash something is going to happen sooner rather than later, whether it be administration or a hot new project. GHT last traded at $0.09.
NEW AGE EXPLORATION (NAE)
I like this prospect. This is one of the more cashed up shells around with about $4.3million on hand so there is less pressure on management to vend in a project anytime soon. From my research it seems that an Iron Ore project will be the most likely kind of project to be acquired by the company. The company has been looking for a project for some time now (almost a year) so things are slow going however they nearly acquired an Iron Ore project in Spain. Negotiations for this Spanish project are unlikely to result in an outcome. NAE has an excellent MD in Gary Fietz who worked at BHP Billiton (BHP) in their Iron Ore division for 21 years. NAE last traded at $0.09.
ADVANCE ENERGY (AVD)
I believe that this company is about to move out of the early stage shell play category with the share price having mini breakouts every so often and trading volumes picking up. The stock price is becoming quite volatile also. There is good value here with the market capitilisation at $5 million and the company having $2.5 million on hand. Recently the company sold it's US oil well projects for $11.3 million which helped the company extinguish outstanding debts. What I find exciting is that the company's financier has allowed them to maintain a $40 million line of credit facility for future acquisitions! AVD last traded at $0.026.
TVN CORPORATION (TVN)
Unusally this company is maintaining it's internet marketing business whilst deciding a resources project might be a good way to 'diversify'. I am unsure what experice the management have in the resources sector and the tenement applications made tend to lack any detail or substance in the announcements made to the ASX. TVN last traded at $0.011
Monday, February 14, 2011
Papillon Resources Broker Report
- Foster Stockbroking has issued a research report on Papillon Resources (PIR)
- Price target $0.80
- PIR last trade: $0.78 (09/02/2011)
- Research link
Sunday, February 13, 2011
Early Stage ASX Shell Plays (part 1)
Following up on my Introduction to ASX listed shell plays post it is time to explore a few of these plays that are in the very early stages with almost no interest and volumes traded. These are the plays that will take some time but offer higher returns for those that are patient!
OLEA AUSTRALIS (OLE)
I originally posted about this company in September and not much share price action has happened since, which goes to show that they are all not winners and early stage plays can be a long haul. The company has a market cap of about $2 million with about $1.3 million in cash on hand. Tony Pitt was appointed to the board in June last year and was looking at vending in commercial real estate assets and as a result almost pulled off a merger with Becton Property Group (BEC). The deal subsequently fell apart and Tony Pitt left the company but retained his shareholding. Since this the company has reinstated its plans to seek a new business for the company. I think this was a good turn of events as real estate is not entirely interesting in comparison to resources projects. It is interesting to note that Ian Murie serves on the board and is also tied up with Acuvax Limited (ACU), a company I recently posted about that has a high chance of backdoor listing a resources project. OLE last trades at $0.003.
FRESHTEL HOLDINGS (FRE)
Freshtel is a company that had business in VOIP technology. The company has been restructuring for the better part of a year now and this has included selling off their UK VOIP assets which were running at a loss. The company has some debt and in November stated that it had sufficient royalty income to maintain the shell. It is currently capped at $2million but only has just under $180,000 in the bank. It is a bit worrying that they failed to lodge their quarterly on time and were suspended as a result (only to lodge soon thereafter). We havent been given any hints as to what may be vended into the shell however we do know that they 'continue to investigate and search for an appropriate business to back into the listed shell and thus give shareholders an improved future with Freshtel' Things arent moving too quickly at Freshtel and the stock last traded at $0.003.
INDIA EQUITIES FUND (INE)
This company is as pure as a shell play can be. The company has no debt, no business and is sitting on cash. The company used to invest in companies listed on the exchange in India however suffered from the share price always being under the value of the securities in it's portfolio. The company decided to liquidate it's portfolio and return capital to the shareholders. It held on to some cash until it's register was raided, a meeting convened and the new shareholder nominating it's own directors and then taking control of the company. I've covered this company before so you can read up further here.
This particular company is one of my preferred picks because with the cash it has on hand there is very limited downside. The net tangible asset backing is $0.0614 per share whilst it's shares traded at $0.044 so there is some good value here. The new directors also have good experience with shell companies. The last update (which I recommend you read) provided by the company was on 30/11/2010.
OLEA AUSTRALIS (OLE)
I originally posted about this company in September and not much share price action has happened since, which goes to show that they are all not winners and early stage plays can be a long haul. The company has a market cap of about $2 million with about $1.3 million in cash on hand. Tony Pitt was appointed to the board in June last year and was looking at vending in commercial real estate assets and as a result almost pulled off a merger with Becton Property Group (BEC). The deal subsequently fell apart and Tony Pitt left the company but retained his shareholding. Since this the company has reinstated its plans to seek a new business for the company. I think this was a good turn of events as real estate is not entirely interesting in comparison to resources projects. It is interesting to note that Ian Murie serves on the board and is also tied up with Acuvax Limited (ACU), a company I recently posted about that has a high chance of backdoor listing a resources project. OLE last trades at $0.003.
FRESHTEL HOLDINGS (FRE)
Freshtel is a company that had business in VOIP technology. The company has been restructuring for the better part of a year now and this has included selling off their UK VOIP assets which were running at a loss. The company has some debt and in November stated that it had sufficient royalty income to maintain the shell. It is currently capped at $2million but only has just under $180,000 in the bank. It is a bit worrying that they failed to lodge their quarterly on time and were suspended as a result (only to lodge soon thereafter). We havent been given any hints as to what may be vended into the shell however we do know that they 'continue to investigate and search for an appropriate business to back into the listed shell and thus give shareholders an improved future with Freshtel' Things arent moving too quickly at Freshtel and the stock last traded at $0.003.
INDIA EQUITIES FUND (INE)
This company is as pure as a shell play can be. The company has no debt, no business and is sitting on cash. The company used to invest in companies listed on the exchange in India however suffered from the share price always being under the value of the securities in it's portfolio. The company decided to liquidate it's portfolio and return capital to the shareholders. It held on to some cash until it's register was raided, a meeting convened and the new shareholder nominating it's own directors and then taking control of the company. I've covered this company before so you can read up further here.
This particular company is one of my preferred picks because with the cash it has on hand there is very limited downside. The net tangible asset backing is $0.0614 per share whilst it's shares traded at $0.044 so there is some good value here. The new directors also have good experience with shell companies. The last update (which I recommend you read) provided by the company was on 30/11/2010.
Saturday, February 12, 2011
Shaw River Resources Research Report
- Hartleys has issued a research report on Shaw River Resources with a 'Speculative Buy'
- Price target $0.38
- SRR last trade: $0.205 (11/02/2011)
- Research report extract link
Introduction to ASX listed shell plays!
Investing in shell plays has always been a favourite past time of mine however this kind of investing has become a lot more popular recently. Reading the online forums there is many discussions on which stock will be the next to fly on announcement of a new resources project acquisition. Frequently I read and are amused at coments such as 'it will be the next ten bagger!' Having said that, there is good money to be made and a couple of different strategies to be deployed. It's taken me a while to collate the information as some of the obscure plays are really hard to find but I'm happy to share my research with each of you!
It must be stressed that this kind of investing is extremely risky. I don't want anyone to be under any illusions, do not go and put your life savings on the stocks I am going to mention.
In my opinion there is two ways of investing in shell companies. Firstly there is the patient, slowly accumulate at low prices and sit tight method. This method involves considerable time sitting and waiting. After taking a position it may take months and months for something to happen. It is characterised by a stock that is unloved, very rarely trades (even for days) and has little to no interest. The stock is usually under a cent per share and nobody posts anything about the stock on online forums such as HotCopper. This kind of investing has the potential for much greater rewards if it comes good as there is much higher share price appreciation.
The other method in my opinion is to get on the stocks that have been shells for sometime but are starting to fire up. This is characterised by increasing volume, interest in the stock and especially comments online. The advantage of this method is that something is going to happen sooner for the company however you may have already missed a bit of the run up in the share price.
It's all a bit of a time versus money type decision.
So stay tuned over the next couple of days as I release the results of trawling through all those company quarterly reports for that elusive comment 'we are evaluating numerous projects, possibly in the resources sector locally and abroad to deliver shareholder value'!!
It must be stressed that this kind of investing is extremely risky. I don't want anyone to be under any illusions, do not go and put your life savings on the stocks I am going to mention.
In my opinion there is two ways of investing in shell companies. Firstly there is the patient, slowly accumulate at low prices and sit tight method. This method involves considerable time sitting and waiting. After taking a position it may take months and months for something to happen. It is characterised by a stock that is unloved, very rarely trades (even for days) and has little to no interest. The stock is usually under a cent per share and nobody posts anything about the stock on online forums such as HotCopper. This kind of investing has the potential for much greater rewards if it comes good as there is much higher share price appreciation.
The other method in my opinion is to get on the stocks that have been shells for sometime but are starting to fire up. This is characterised by increasing volume, interest in the stock and especially comments online. The advantage of this method is that something is going to happen sooner for the company however you may have already missed a bit of the run up in the share price.
It's all a bit of a time versus money type decision.
So stay tuned over the next couple of days as I release the results of trawling through all those company quarterly reports for that elusive comment 'we are evaluating numerous projects, possibly in the resources sector locally and abroad to deliver shareholder value'!!
Tuesday, February 8, 2011
Earth Heat Resources Valuation Report
- Arrowhead Business & Investments Decisions has issued a due diligence and valuation report on Earth Heat Resources (EHR)
- Report dated 07/02/2011
- Valuation: $0.364-$0.964
- EHR last trade: $0.081 (08/02/2011)
- Report link
Monday, February 7, 2011
Gunson Resources Research Report
- Resources Capital has issued a research report on Gunson Resources (GUN)
- Report dated 04/02/2011
- Valuation: $0.70
- GUN last trade: $0.23 (07/02/2011)
- Research report link
Gunson Resources shares increased $0.03 to $0.20 following the issue of the above research report. This bodes well considering the company is completing a Share Purchase Plan at $0.20 and will result in more funds in the kitty should the market price hold firm.
Friday, February 4, 2011
Base Resources Research Report
Euroz, a well respected firm released a broker report this week on Base Resources (BSE).
Those that have been following my blog will know that I am bullish on mineral sands and have mentioned this company, Gunson Resources (GUN) and a few others recently.
The report commenced coverage with a valuation of $0.76 (well below today's closing price of $0.43) and long term $1 share price.
Euroz believes that the Kwale project has potential revenue of US$160-180m p.a. generating EBITDA of $80-$100m once in full production.
I personally believe that the market is starting to cotton on to the potential of mineral sands companies and that every portfolio should have some exposure.
Those that have been following my blog will know that I am bullish on mineral sands and have mentioned this company, Gunson Resources (GUN) and a few others recently.
The report commenced coverage with a valuation of $0.76 (well below today's closing price of $0.43) and long term $1 share price.
Euroz believes that the Kwale project has potential revenue of US$160-180m p.a. generating EBITDA of $80-$100m once in full production.
I personally believe that the market is starting to cotton on to the potential of mineral sands companies and that every portfolio should have some exposure.
Monday, January 24, 2011
Acuvax (ACU) Next Biotech to Resource Play
Acuvax Limited (ACU) had some nice volume and trading today so I decided to do a bit of research and see what I could come up with. I'm quite excited about this high risk shell play that I am sure is soon to vend in a resources project and see some good returns!
Today's share price action suggests to me that the company is soon to acquire a resources project, that or the market is starting to join the dots together and get onboard...
The first sign was the annual report issued in September and the following statement contained within:
"Outlook
The Company is continuing to pursue investment opportunities in the both the biomedical area and
alternate sectors. The Company is currently in preliminary discussions with several interested
parties with a view to furthering any investment opportunities for the Company at the completion of its capital raising program."
The above statement is quite vague and gives no indication what the further investment opportunities may be so taking a position back then would have been just a punt.
Those astute market watchers or people with a keen eye for details may have picked up on the next clue in late November. This was in the form of old directors resigning and new director appointments of Keong Chan and Lloyd Flint. Lloyd Flint is currently a director of Palace Resources (PXR), past director of Zambezi Resources and also has secretarial duties at Globe Metals & Mining (GBE) and Odin Energy (ODN).
In December (02/12) we see a change in Secretary and office to where else but Perth. Perth is where many of the small resources specialist brokers such as Patersons and resources companies reside. It's a resources rich state, especially in the North.
The next clues are becoming less subtle. Numerous substantial holder notices are being lodged in early to late December. Those investors include Jersey Investments, Murdoch Capital and Syracuse Capital. These are all companies with stakes in recently listed float Glory Resources (GLY).
In conclusion I think that today's share price action was more than just a pump and dump and there's a bit more to come on this one. ACU shares were up $0.002 to $0.004 on 66 million units, still valuing the company at a small $4 million. If other recent shell plays such as Energio (EIO) and C @ limited (CEO) are anything to go by this should be very interesting!
Today's share price action suggests to me that the company is soon to acquire a resources project, that or the market is starting to join the dots together and get onboard...
The first sign was the annual report issued in September and the following statement contained within:
"Outlook
The Company is continuing to pursue investment opportunities in the both the biomedical area and
alternate sectors. The Company is currently in preliminary discussions with several interested
parties with a view to furthering any investment opportunities for the Company at the completion of its capital raising program."
The above statement is quite vague and gives no indication what the further investment opportunities may be so taking a position back then would have been just a punt.
Those astute market watchers or people with a keen eye for details may have picked up on the next clue in late November. This was in the form of old directors resigning and new director appointments of Keong Chan and Lloyd Flint. Lloyd Flint is currently a director of Palace Resources (PXR), past director of Zambezi Resources and also has secretarial duties at Globe Metals & Mining (GBE) and Odin Energy (ODN).
In December (02/12) we see a change in Secretary and office to where else but Perth. Perth is where many of the small resources specialist brokers such as Patersons and resources companies reside. It's a resources rich state, especially in the North.
The next clues are becoming less subtle. Numerous substantial holder notices are being lodged in early to late December. Those investors include Jersey Investments, Murdoch Capital and Syracuse Capital. These are all companies with stakes in recently listed float Glory Resources (GLY).
In conclusion I think that today's share price action was more than just a pump and dump and there's a bit more to come on this one. ACU shares were up $0.002 to $0.004 on 66 million units, still valuing the company at a small $4 million. If other recent shell plays such as Energio (EIO) and C @ limited (CEO) are anything to go by this should be very interesting!
Sunday, January 23, 2011
Running with Zircon Theme
Following up on my post last week regarding Zircon and the potential of associated explorers I've done some more reading and come up with a few links for those that are interested. The links are shown below:
Chinese hunger for zircon drives handy deal with Diatreme
Ceramic tile craze boosts mineral sands demand
Zircon producers may start calling the tune as shortages loom
Whilst two of the articles are a little old it is interesting reading and mentions two additional companies that I did not cover: Diatreme Resources (DRX) and Image Resources (IMA).
Chinese hunger for zircon drives handy deal with Diatreme
Ceramic tile craze boosts mineral sands demand
Zircon producers may start calling the tune as shortages loom
Whilst two of the articles are a little old it is interesting reading and mentions two additional companies that I did not cover: Diatreme Resources (DRX) and Image Resources (IMA).
Thursday, January 20, 2011
China's demain for ceramics to spur Aussie Zircon stocks
Much of my time is spent sifting through announcements trying to find that one or two lines that might signal that a company is changing focus or on the hunt for a new project which could be a good catalyst for some share price gains. Every so often I get an idea and a top down approach prevails, this is one of these cases.
China. It is one of the drivers of the market at the moment and key to many of our resources stocks on the ASX. Whilst the focus is quite often on iron ore in China's booming construction industry there is another ingredient which is key - ceramics, which are made from ZIRCON. Ceramic tiles are used on the floors, walls and almost any surface in buildings in China.
Iluka Resources (ILU) is the heavy weight listed on the Australian market. It recently stated that there is a worldwide shortage of zircon which will continue and thus support zircon prices. The company has an excellent chart and has tripled in the last year. It will probably see more gains but I am here to investigate the smaller capped stocks.
Matilda Zircon (MZI) is the smallest play on the ASX. It has had a checkered past including going into administration whilst having a decent Tiwi Islands asset. Michael Kiernan who I used to respect somehow managed to screw the company up similarly to Territory Resources (TTY). Avoid.
This leaves three plays that have a geniune chance to make some good returns. Sheffield Resources (SFX) has only been listed for just over a month and as a result is quite cashed up with over $6million in cash (not bad for a market cap of ~$11 million). It's always hard to judge new listings as there isn't much of a chart and you cant measure the company performance. Having said that, the company does have a few projects in Western Australia and that includes an ex BHP prospect with a 1.5-2.5 billion tonne exploration target.
Gunson Resources (GUN) and Base Resources (BSE) are the ones to watch in my opinion.
I remember last year (February) when Base Resources purchased the Kwale mineral sands project in Kenya. The share price tanked below $0.10 as the market was hoping for a hot project at the time (zircon wasn't 'sexy'). They purchased the project for next to nothing and the previous owner had sunk millions into it already, including completing a DFS and having all the permits already in place. Recently Base Resources announced that the project economics have become more robust and estimate an NPV of $160 - $210 million. Goldman Sachs recently put out a research report with a $0.50 12 month target on the stock and buy rating. The report cited that the valuation put on the stock was discounted as a result of the high capital expenditure required compared to market capitilisation risk (I.e. asking how can a company that small raise the funds to get the project off the ground?). It is good to see a small stock being covered by one of the major brokers.
Gunson Resources has a smaller market cap (~$47 million) when compared to Base Resources although their project is in Western Australia. The Coburn Zircon project has an estimated NPV of $190 million. The company share price hit a high of $0.30 in December but has cooled off since. Expect newsflow especially when statements such as "Discussions with potential strategic investors in the Project are ongoing, with seven interested parties actively reviewing the investment and offtake opportunity." are made to the market.
GUN closed at $0.24 whilst BSE at $0.425 today.
China. It is one of the drivers of the market at the moment and key to many of our resources stocks on the ASX. Whilst the focus is quite often on iron ore in China's booming construction industry there is another ingredient which is key - ceramics, which are made from ZIRCON. Ceramic tiles are used on the floors, walls and almost any surface in buildings in China.
Iluka Resources (ILU) is the heavy weight listed on the Australian market. It recently stated that there is a worldwide shortage of zircon which will continue and thus support zircon prices. The company has an excellent chart and has tripled in the last year. It will probably see more gains but I am here to investigate the smaller capped stocks.
Matilda Zircon (MZI) is the smallest play on the ASX. It has had a checkered past including going into administration whilst having a decent Tiwi Islands asset. Michael Kiernan who I used to respect somehow managed to screw the company up similarly to Territory Resources (TTY). Avoid.
This leaves three plays that have a geniune chance to make some good returns. Sheffield Resources (SFX) has only been listed for just over a month and as a result is quite cashed up with over $6million in cash (not bad for a market cap of ~$11 million). It's always hard to judge new listings as there isn't much of a chart and you cant measure the company performance. Having said that, the company does have a few projects in Western Australia and that includes an ex BHP prospect with a 1.5-2.5 billion tonne exploration target.
Gunson Resources (GUN) and Base Resources (BSE) are the ones to watch in my opinion.
I remember last year (February) when Base Resources purchased the Kwale mineral sands project in Kenya. The share price tanked below $0.10 as the market was hoping for a hot project at the time (zircon wasn't 'sexy'). They purchased the project for next to nothing and the previous owner had sunk millions into it already, including completing a DFS and having all the permits already in place. Recently Base Resources announced that the project economics have become more robust and estimate an NPV of $160 - $210 million. Goldman Sachs recently put out a research report with a $0.50 12 month target on the stock and buy rating. The report cited that the valuation put on the stock was discounted as a result of the high capital expenditure required compared to market capitilisation risk (I.e. asking how can a company that small raise the funds to get the project off the ground?). It is good to see a small stock being covered by one of the major brokers.
Gunson Resources has a smaller market cap (~$47 million) when compared to Base Resources although their project is in Western Australia. The Coburn Zircon project has an estimated NPV of $190 million. The company share price hit a high of $0.30 in December but has cooled off since. Expect newsflow especially when statements such as "Discussions with potential strategic investors in the Project are ongoing, with seven interested parties actively reviewing the investment and offtake opportunity." are made to the market.
GUN closed at $0.24 whilst BSE at $0.425 today.
Monday, January 10, 2011
Returns Scoreboard for 2010
ASX Code - Date Mentioned - Then Price - 31/12/2010 Price - Move
JML 13/02/2010 0.4 0.675 69%
ARV 29/07/2010 0.043 0.063 47%
AVB 2/08/2010 0.019 0.145 663%
HRS 5/08/2010 0.21 0.36 71%
INE 8/08/2010 0.047 0.045 -4%
NTU 9/08/2010 0.11 0.405 268%
TOE 31/08/2010 0.099 0.16 62%
CAY 2/09/2010 0.36 0.66 83%
ORM 9/09/2010 0.11 0.25 127%
AOP 20/09/2010 0.017 0.012 -29%
AFR 22/09/2010 0.165 0.59 258%
SPH 28/09/2010 2.49 3.04 22%
DDD 4/10/2010 0.032 0.041 28%
PRR 5/10/2010 0.125 0.17 36%
SER 27/10/2010 0.062 0.083 34%
There's been plenty of returns to be had in the last six months and especially in the small cap resources stocks which tend to be my favourite area. Whilst I've mentioned many stocks in the last year or so the above table shows those stocks that I've had the most interest in and the returns from the time mentioned until the end of last year. Many of the stocks you may have taken profits in or not held for that long but it does give a nice little indication of performance of the blog. Don't forget to click on any of these companies in the right-hand margin of the blog to have a look as some of the reasons for my interest in these stocks originally.
AVB ended up being the cracker of the year with a staggering 663% return! A number of these stocks have run even harder in first week of January.
Resources stocks to target this year in my opinion are copper, coal, lithium, potash, rare earths and zircon companies.
After taking a break from the last couple of months I hope to provide insightful and interesting commentary going forward for 2011. Good luck with your investing!
JML 13/02/2010 0.4 0.675 69%
ARV 29/07/2010 0.043 0.063 47%
AVB 2/08/2010 0.019 0.145 663%
HRS 5/08/2010 0.21 0.36 71%
INE 8/08/2010 0.047 0.045 -4%
NTU 9/08/2010 0.11 0.405 268%
TOE 31/08/2010 0.099 0.16 62%
CAY 2/09/2010 0.36 0.66 83%
ORM 9/09/2010 0.11 0.25 127%
AOP 20/09/2010 0.017 0.012 -29%
AFR 22/09/2010 0.165 0.59 258%
SPH 28/09/2010 2.49 3.04 22%
DDD 4/10/2010 0.032 0.041 28%
PRR 5/10/2010 0.125 0.17 36%
SER 27/10/2010 0.062 0.083 34%
There's been plenty of returns to be had in the last six months and especially in the small cap resources stocks which tend to be my favourite area. Whilst I've mentioned many stocks in the last year or so the above table shows those stocks that I've had the most interest in and the returns from the time mentioned until the end of last year. Many of the stocks you may have taken profits in or not held for that long but it does give a nice little indication of performance of the blog. Don't forget to click on any of these companies in the right-hand margin of the blog to have a look as some of the reasons for my interest in these stocks originally.
AVB ended up being the cracker of the year with a staggering 663% return! A number of these stocks have run even harder in first week of January.
Resources stocks to target this year in my opinion are copper, coal, lithium, potash, rare earths and zircon companies.
After taking a break from the last couple of months I hope to provide insightful and interesting commentary going forward for 2011. Good luck with your investing!
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