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

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.

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

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!

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.

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.

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

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