#RGM cheap production of expensive coals

Regency issue newsletter highlighting their plans for coal production (see here).

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Some of the key highlights:

  • Regency focusing on ‘cheap production of expensive coals
  • Focusing on metallurgical coal rather than dirty coal. Required for steel production.
  • Rosa announced coal reserve of 453,000 tons is very low as:
    • Based on 300′ auger rather than 1200′ Highwaller mining.
    • more coal identified
  • Val has 100,000 tons/month production target
  • production / revenue stream imminent.
  • RGM have first mover advantage.
  • Rosa coal at $130/t = $4.5m net attributable profit.

As news is released the share price will react accordingly. It is clear from the newsletter that further information is going to be released to the market.

The business is aware figures released to the market are conservative. We await the revised NI 43 101 report and also for RGM to release actual coal outputs. The market will then realise the business is undervalued.

 

 

 

 

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#RGM potential revenue £9.3m to £55m+?

The Regency Mines RNS today (see here) highlighted two significant developments:

1. Rosa – mine permits in place and production has commenced with a weekly revenue stream.

2. Vali Carbon Corporation – 50,000 tpm offtake contract being negotiated.

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The following graphic indicates that based on Vali Carbon Corporation alone the revenue for RGM will be a minimum of £9.3m per year and if output reaches 100,000 tpm £18.6m.

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These revenue figures take no account of:

  • Rosa – year 2 production expected to be 120,000 tpm = revenue of £22.32m/year.
  • Rosa – Highwaller production could reach 600,000 tpm = revenue of £111.6m/ year. Being conservative and assume only 50% efficient = £55.8m
  • Washed coal revenue of $8 / ton
  • Other coal opportunities indicated in the above graphic.
  • Regency Mines interests in Motzfeldt, Horse Hill, Mambae and Curzon Energy.

 

Based on information in the public domain you have to question how the market cap of the business can remain c£5m for much longer.

What will be the catalyst resulting in a share price rerate?

Will it be?

1. The 50,000 tpm offtake contract currently being negotiated being announced to the market.

2. Market realising the implications of the revenue streams and significant under valuation of the business.

3. Announcements from the company regarding their other investment interests.

Chartists all predicting significant uplift in #MTR share price

The Metal Tiger share price is currently 2.95p.

The following Chartists all predict a significant uplift to the share price is imminent.

Bonkers99

Predicting share price will increase with a target of 7p – c13p

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Nic Trades

Predicting share price will rise to a target of 4.1p to 5.87p

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Emergo Charts

Using the Elliot Wave Theory predicting share price of  4.17p – 4.75p.

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Zac Mir

In this video Zac predicts share price will test 4.5p.

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The Chartists are therefore predicting an uplift of the share price of between 39% and 340%.

This is also supported  by the fact that all the indicators are that everything is becoming aligned fir a share rerate (see here).

 

This graphic indicates the near term news and events that could push the share price higher.

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Finally this chart indicates the disparity between the MOD Resources share price and Metal Tigers.

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All the indicators are the current Metal Tiger share price of 2.95p makes no sense and a rerate is going to happen.

 

#MTR – Swiss cheese model and the impact on the share price.

Analysts and Chartists are predicting the Metal Tiger share price is going to re-rate upwards.

Many follow what these ‘experts’ say and this can become a self-fulfilling prophesy. The herd arrive and the share price goes up.

The Swiss Cheese model suggests that when everything aligned the unexpected happens. The share price rise could therefore when it happens according to the theory be significant.

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1. Resource  increases

These have been happening for a while and are covered in these two blogs.

MTR stunning results under T3. link

MTR results due. link

MTR RNS dated the 6th March (see here) also highlights that data will be released to the market soon.

 

2. Strong fundamentals, business strategy and leadership

Charles Hall (Chairman) and Michael McNeilly (CEO) recently appointed with other board changes.

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This link takes you to an interview with Charles and Michael. Interview highlights the changes that have and will be taking place.

Metal Tiger is a private investor friendly business. It was no surprise when Charles a private investor with a T1 holding was appointed Chairman.

3. Analysts all agree share price will head North 

a) Broker99

Broker99 a Chartist who seems to get it right more than wrong, predicts a breakout of the sp at 2.7p with a prediction that will rise to 4p+ and then 6p plus, when, if more news comes could go to c21p.

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This Chartist also points out that support is now very strong at the 2.2p level, significantly reducing any downside risk.

We also have Star Tom from Blueshare predicting a share price breakout.IMG_1331

The support and resistance points on the above charts are similar to analysis from Barchart.com. See table below.

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Other Chartists such as Zak Mir have also strongly supported Metal Tiger predicting share price movement North.

b) Technical Data (comparing MTR and MOD Resources).

Looking at the technical data for MTR and MOD indicates that both are strong buys.

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What is interesting with the data is both companies share price movement is primarily based on the Botswana prospect news. Because MTR’s share price is being held back it means MOD buy opinion is 50% stronger than MTR’s.

This distortion has to correct its self eventually.

c) Technical data

The following tables highlight for those who trade based on technical analysis that MTR is a very strong buy.

4. Investor awareness and sentiment change

Investor  awareness is definitely changing and this is evidenced by the following:

a) Wider awareness.

MTR has for a while been discussed predominately on the following forums:

  • Blueshare
  • LSE
  • Hotcopper

Over the last week discussion has also been happening on:

  • Ceo.ca
  • Discussthemarket.com
  • Stockgumshoe.com

This indicates Metal Tiger investor awareness base is widening.

b) Trading volumes

Volumes of share trades are also increasing. Following table indicates average volume has gone from 6.5m to 12m in the last 6 months.

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Twice as much interest. This as the share price increases creates a solid new investor base. Those who trade are now in at a higher price than previously, meaning to realise a profit the sp needs to rise higher.

c) Negative comments about MTR business

LSE is a forum that several posters use to spread negative comments, as they either have or work for somebody with a short position. It is noticeable the number of these posters has significantly decreased.

Some are now actively promoting MTR indicating they have gone long. We now only have one or two left who either are carrying baggage against individuals connected with MTR or who enjoy being confrontational.

Sentiment on bulletin boards is definitely changing and now mainly has a positive bias.

 

Conclusion

Mice are nibbling around the edges trying to prevent the sp from rising. The cheese holes are however all aligning, with many aligned and LTH’s are about to reap the rewards.

Those that hope to benefit from keeping the share price low will soon be shocked by a significant sp re-rate. The share price rerate will be quick and the impact devastating for those who haven’t realised it’s coming.

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Possible reasons why the Metal Tiger share price has not reacted to the significant news from Botswana can be found here.

#MTR share price not reacting in line with #MOD sp. ***updated***

Is the Metal Tiger share price undervalued?

It seems perverse that whilst the resource news from Botswana gets better and better, MTR’s share price does not react in the same positive way as their partner MOD Resources share price.

This graph  compares MOD share price (brown line) with MTR’s share price. It is clear from this graph that MOD investors are reacting to news announcements resulting in the sp climbing whilst MTR’s investors have seen little improvement in the sp.

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The following graph highlights that in October, November and December 2016 MOD Resources and Metal Tiger’s share price movements mirrored one another.

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Then in 2017 the two share prices started to diverge. That divergence has increased significantly since the last MOD announcement. The two share prices now have moved so far apart, you have to conclude MTR is significantly undervalued or MOD over valued.

The following table takes into account:

1. MOD Resources – Sam’s Creek gold project and debt.

2. Metal Tiger – Asset Division, Thailand and Spain

and concludes that taking these variable into account the share price of Metal Tiger should be 5.1p. With the sp currently being 2.28p this would suggest the MTR share price is 131% undervalued.

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Interestingly the latest VSA Brokers note has a price target of 5.68p. Reasonably close to the 5.01p highlighted in the table.

The table indicates the value of the Asset Trading division excluding MOD share holding as £2,010,000. It is worth noting that the actual value of the Asset Trading division including MOD is  now £5.321m.

So why do we have a disparity between what ASX and AIM investors think about the value of the the Botswana asset?

  • Did we have significant short interest when sp was below 2p? The rise above 2p happening as shorts closed as good news released.
  • Short positions opened in belief warrant flipping would happen.
  • UK investors don’t understand the technical data being released by MOD.
  • MTR other interests, for example Thailand are seen as a negative.

If short positions holding the share price back, these eventually will have no option but to close as warrant flipping comes to an end, positive news from MOD continues and sentiment changes regarding the prospects for MTR.

UK investors will when the next brokers note is issued, have the technical data, they don’t understand, converted to a value / share price target. The last brokers note is out of date as doesn’t take into account the significant uplift in the value of the Asset Trading division or the increase in copper and silver resource in Botswana.

Thailand will soon be a KEMCO asset and any negativity, if it exists will not impact on Botswana value.

We are very close to reasons for the disparity between the MOD and MTR share prices being history. Based on no new information regarding resource size being released you would expect the MTR sp to rise to c5.1p.

Realistically the probability of the resource in Botswana not increasing is zero. You would therefore expect the sp to  rise above 5.1p.

Invest in MOD or MTR?

The following table indicates the returns you would expect if invested £10,000 in the two companies and a sale of Botswana resulted in a special dividend of £500m.

QThe table highlights that because of the disparity in the share price you would be 58% better off investing in MTR rather than MOD.

** Update : 12th March 2017

This table indicates the impact of the share price rise in MOD on the 10th March and what would happen if MTR distributed the dividend attributable to their 4.9% holding to MTR shareholders.

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Investing in MOD would provide a return of £48,777 and in MTR £91,373. This rather than a 58% uplift would be 90%.

Note: You also need to consider MOD have licences that MTR not involved in and MTR have other assets such as Thailand.

Conclusions

1. You could put forward a strong argument, if you believed a special dividend will happen, for transferring any holding in MOD into Metal Tiger.

2. MTR undervalued compared with MOD.

3. MTR share price has been held back.

4. We are very close to an MTR share price rerate.

5. MTR is currently a better investment opportunity than MOD.

It will only take a little price pressure for the sp to be released from the current range. Interestingly many of those anti MTR on LSE no longer post. This is a good indication they have closed their short positions.

 

 

Notes:

This information is worth reviewing:

1. VSA Brokers note for MTR (old, doesn’t take into account latest resource data).

http://sj.co.uk/VSA.pdf

2. YouTube blog is well worth a listen. Highlights reasons as to why the MOD/MTR T3 prospect has great potential.

#MTR stunning results from under T3.

On the 17th February Michael McNeilly said in an RNS that what was under the known T3 resource would probably be a larger resource.

Today MOD Resources released an ANN (see here). Julian Hanna stated:

 

“This new intersection exceeds the width and grade of the overlying T3 resource which is several times wider than most copper deposits in the Kalahari Copper Belt”.

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The disparity between MOD resources share price and Metal Tigers share price has become even larger overnight with MOD sp rising by another 15% on the news.

We await with interest the release of the MTR RNS this morning.

It is clear the Metal Tiger sp will re-rate. The only question is when and by how much.

We must by now have reached the point that anybody shorting the stock would be better off moving to other feeding grounds.

#MTR news due?

Metal Tiger share price is drifting, whilst we await news about the Thai IPO and news from Botswana.

What we know is significant news will land soon.

Thailand

You only have to look at the significant number of consultants who MTR have engaged to progress the Thai IPO including:

Barr Consultants – Mine Plan for permitting submission and Tailings Dam stability Assessment.
GWRC – Hydrogeology Study
IEM – Environmental Plan and Second Baseline Study
5 Corners – Economic Study for permitting submission

Other consultants to appoint according to the RNS dated 11th January being:

  • Underground Air Quality Assessment and Stability Assessment
  • Tailings Geochemistry
  • Resource re-calculation
  • Updated AIM Standard compliant Preliminary Economic Assessment

Botswana

Inclement weather delayed progress early January. Since then however drilling progress has continued and we now await data from the MOD team.

Good results are expected. One of the drillers posted six photos of a section of core indicating visible copper. Why would he bother to take 6 photos of this section of core?

 

This isn’t a one-off. The following photo taken on the 3rd February indicates a recent core with visible copper. We will probably have to wait 3-4 weeks before the analysis of this core is released to the market.

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The next batch of analysis results released by MOD Resources are going to be interesting.