Tag Archives: Aim

Regency Mines coal interests and the Trump card turns it into a ‘gold mine’. #RGM

Regency Mines has a significant coal mining interests in the United States. The Rosa coal prospect is metallurgical grade coal used for the production of steel. Below is an abstract from a recent analyst note (see here) regarding Regency Mines coal interests.

 

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The price of metallurgical coal has been rising steadily since 2016.

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We now have Trump putting significant tariffs on steel imports (see here). These tariffs for steel can be up to 25%.

What will the impact be on the value of Regency Mines metallurgical coal interests located in the United States? It would be reasonable to assume steel production in the States will increase, increasing the demand for Met coal driving up the cost of Met coal.

Regency Mines in the analyst note they commissioned, stated they expected early profits to come from their Met coal interests.

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With the Trump news yesterday you would expect this to be a significant catalyst to:

a) remove barriers, preventing early production of Met coal from happening.

b) increase the early profits RGM are expecting from their coal interests.

 

It looks like the long awaited returns from Regency Mines coal interests are about to materialise. Trump is turning Regency Mines American coal interests into a ‘gold mine’.

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#MOD #MTR Botswana PFS will be published next week.

MOD Resources exploration programme in Botswana is going into overdrive in 2018.

The latest announcement from MOD is very encouraging (see here).

  • Widespread copper zinc soil anomalies to be drilled and tested
  • Revised resource estimate on track
  • Drilling T-Rex continues
  • Drilling wider T3 dome later in Q1

     

The PFS for T3 is due to be issued within the next 4 working days (4 days when exclude Australia Day).

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The price of copper has increased since the last report, with the increase in resource and using a copper price of c$3 the NPV for the T3 prospect should significantly increase.

Investors will be taking their positions ready for the release of the PFS. The PFS will not be released on the 26th January as Australia Day so has to be issued early next week.

 

Shares to watch in 2018? #MTR #THR #KCN #MOD #RRR #RGM

Three companies with share prices I predict will more than double in first four months of 2018.

1. Metal Tiger (MTR). Share price end of 2017, 2.32p.

Asset Trading Division – Value generated by the Asset Trading Division not yet recognised by the market. c£18m available in liquid assets with c£9m of this being cash. Stella performance in 2017, funds available to accelerate  further value enhancement.

Chatree mine Thailand – Metal Tiger BOD has acquired 8.13% of Kingsgate business, whose shares this year dropped to an all time low due to the Chatree mine being closed by the Thailand Government.

Metal Tiger have the contacts, personnel and resource to reopen Chatree. MTR are in the process of taking the appropriate action to ensure the value of their 8.13% stake significantly increases.

KEMCO IPO – Metal Tiger in Q1 2018 are spinning out their Thailand assets into a separate business.  Thailand business value isn’t yet reflected in the Metal Tiger share price.

Botswana copper – JV prospect with MOD Resources. Resource continues to grow as prospecting progresses. Copper contained in T3 (one prospect area) with each updated estimate contained copper increases. In 2018, with more news due, it is likely this could become a recognised tier 1 resource. Major copper producers will make the appropriate moves as copper is located in a safe jurisdiction with a government that is pro mining.

All elements of the Metal Tiger offering are coming together at the same time. Positions will be taken early 2018, ready for the significant news and share price upside by the end of 2018.

 

2. Thor Mining (THR). Share price end of 2017, 2.89p.

The following link provides an update on Thor projects (see here).

Thor is fully funded for 2018.

Pilot Mountain is a significant Tungsten prospect in America. Interesting as this would, when in operation be the only Tungsten mine in America. This would reduce the impact of China’s dominance in the market.

News due regarding Kapunda copper project and  Molyhil Tungsten/molybdenum project in Australia. Pilot Mountain news regarding a scoping study is also due.

A broker ringing around high net worth individuals encouraging them to sell their holding. Why would a broker do this when news is imminent and share price is rising and will continue to do so? This could indicate a major short position

Any good news mixed with a broker closing a short position will result in a significant spike in the share price.

 

3. Red Rock Resources (RRR). Share price end of 2017, 0.925p

Red Rock Resources plc is a natural resource exploration and development company managing  a diverse portfolio of mining and oil and gas projects and investments around the world.

Steelmin in Bosnia has an existing smelter complex that RRR has financed with a view to getting back online Q1 2018. Steelmin’s existing projections are €35m revenue in first full year of operation.

Andrew Bell (Chairman) in December 2017 bought a significant tranche of shares on the open market. This is a good indication the Chairman believes significant share price upside is going to happen.

For details of other key projects read the ARA (see here).A3E14EE6-E244-4F9F-85A5-20AAFFA03123

 

Six stocks predicted to multi bag in 2018

1. Kingsgate (KCN.ASX).  Share price end of 2017, AUD$ 0.40

Current BOD are not delivering value for shareholders. Pending changes will result in a refocus on Thailand and the reopening of Chatree mine. Previously when mine operating, Kingsgate paid between 10 cents and 35 cents a year in dividends.

Once the mine is reopened, dividends could again be paid to shareholders.

Once business is back on track the share price could easily reach $5, this being less than half previous highs.

2. MOD Resources (MOD.ASX). Share price end of 2017, AUD $0.051

Botswana copper licence area is significant. Above refers to the MOD JV area. MOD have extensive licence areas 100% owned by MOD (see here).  DD654EC3-8F35-4A41-A569-C523B78923F6

3, 4 and 5. Metal Tiger (including KEMCO IPO upside), Thor, Red Rock Resources

See above.

6. Regency Mines (RGM). Share price end of 2017 0.525p.

Only one of the six areas of operation needs to deliver and significant value enhancement will be achieved.

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Mambare – cobalt price went from $32,500 per tonne, reaching a peak of  $75,000 in 2017. The prediction is because of electric vehicle battery requirements the price of cobalt will continue to increase in 2018 (see here).

Curzon – gas production commences 2018 and is easily scalable.

Coal – operation is for metallurgical coal. Key for steel production. Steel production required for the American economy.

Modzfelt – rare earth elements opportunity.

EsTqeq – electric vehicles and battery subsidiary.

Regency share price is suffering due to sentiment being low due to:

1. YA loan.

2. Being over bullish with announcements regarding progress.

Once resolved and focus is on Curzon, coal opportunities  etc the share price will move North very quickly. Regency could surprise many.

 

2018 is going to be a good year for the resource sector with the potential for significant gains to be made investing in small market cap resource businesses.

The 6 businesses mentioned in this blog I believe highlight some with significant potential.

Metal Tiger share has minimum of 72% uplift potential #MTR

Metal Tiger Asset Trading division has done very well this year, with assets now having a value of c£10m. Comprising of Thor Mining £1.5m, MOD £3m, Lion £1m, Kingsgate £3.5m and Lion and Thor warrants of c£1m.

Assume cash in bank of c£6m and this equates to 1.5p per share.

The 30% Botswana JV with MOD Resources, also has a value of £24m equating to 2.2p per share.

Botswana and the Asset Trading division has a combined value per share of 3.7p, 72% above the current share price of 2.15p.

These figures on their own highlight the share price has considerable upside potential.

Now consider:

1. Thailand assets, detailed in brokers note (see here). Metal Tiger shareholders will get a free ride when KEMCO IPO happens in February and KEMCO shares are “gifted” to MTR shareholders.

2. Kingsgate Board spill, see here. This booklet highlights why MTR believe they are best placed to create value for Kingsgate shareholders. Then consider the potential financial implications.

  • Current Kingsgate share price is 42 cents – share price could easily reach $5 if Chatree mine reopens. $5 being less than half previous Kingsgate share price highs.
  • Kingsgate used to regularly pay between 15c and 35c in dividends per year.

3. Botswana resource increasing all the time. This announcement indicates what has been happening and gives an indication of how quickly the value of the asset is increasing (see here).

The Thailand, Kingsgate plays and Botswana upside are at the current Metal Tiger share price, free rides for investors.

With the free rides and the 72% discount, the Metal Tiger share price looks poised for a rerate. 

 

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Regency Mines #RGM update due.

The current Regency mines market cap of £3.5m has no relation to the assets of the business.

Regency have a diverse portfolio of assets covering different commodities and jurisdictions. A portfolio that offers significant opportunities and manages the potential risks associated with businesses that have one business in one area.

The following graphic indicates the diverse nature of the business, its potential and the minimum expected revenue.

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The slight delays to the coal projects are just that. A much larger deal is anticipated from that previously envisaged.

We know Legacy Hill have been carrying out due diligence. We will soon know the partners involved in the bigger project deal.

Rumours are circulating that a large coal deal is about to be announced. Longterm Regency shareholders await the news with anticipation.

The share price will react on the coal news and the bashers of the stock  will disappear into the either.

We then have the following news coming:

1. Conclusion of the deal from the HHL shares sale to Alba.

2. Mambare Nickel/Cobalt News.

3. Motzfeldt news.

Regency Mines market cap will then IMHO be much higher than the current £3.5m.

 

Invest in Metal Tiger #MTR or MOD Resources #MOD?

The recent brokers note on MOD Resources indicated a target, giving an uplift of 50% to the current share price (see here).

This target is based predominantly on the T3 prospect, a joint venture with Metal Tiger (70/30% split).

IMG_1788Investors wanting to invest in this copper prospect in Botswana, have a choice, invest in Metal Tiger (MTR) or invest in MOD Resources (MOD).

Because of:

1. British Pound vs Australian dollar exchange rate

2. MOD has significantly more shares in issue the MTR

3. 70% MOD, 30% MTR split

4. MTR having 5% of MOD share capital

the returns should the T3 prospect be sold and capital returned to shareholders would currently favour MTR investors.

Looking at  the pros and cons for investing in MTR vs MOD,you need to consider the following:

1. MOD have announced over the next year they will be investing A$10m in Botswana. 75% of this investment will be used on MOD/MTR prospects. The downside is what the exploration within MOD 100% areas will discover.

2. MTR JV covers several MOD prospect areas. All the areas highlighted in orange in this table.IMG_10073. MTR will be announcing this month details of the Thailand IPO (KEMCO). MTR shareholders will receive ‘free’ shares in KEMCO. Currently the MTR share price doesn’t include any value for Thailand.

4. Disparity between MOD and MTR share price. MOD share price has increased whilst the MTR share price has stagnated.

IMG_1858At some stage you would expect MTR share price to increase and for the gap to close. Alternatively it could be MOD over priced.

5.  Copper price now over $3/lb. This is still below the 5 year high with many analysts predicting the price will continue its rise.

6. Having met the management of both companies they come across as professional and competent.

7. Assays due from the holes drilled on T3 when drilling recommenced in the first week of August. We already know visible copper present. What will happen to the share price if significant results or trading halt called due to ASX requirements? Could this result in a spike in the MTR sp as trading will not be halted on the AIM market?

8. Sprott took a significant investment in MTR. Why didn’t they invest in MOD when they did their placing? Have they decided that MTR is the better investment?

9. Finance – both MTR and MOD have significant capital to fund drilling.

10. NPV of A$210m for T3/T1 is only going to increase as data analysed.

Looking at these 10 points, the following graphic indicates the best investment, MOD or MTR (white = neutral, green MTR, red MOD).

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Near term more value is going to come from MTR/MOD JV licence areas rather than those owned 100% by MOD.

If somebody wanted more exposure to the other MOD licence areas, you could put a strong case forward to invest in MTR, take the potential near term gains and then invest in MOD.

Another consideration would be each businesses other interests such as MOD’s Sams Creek asset and MTR’s investment portfolio.

MOD or MTR, it looks like September is going to be a very interesting time for the share price.

The recently released MOD, Ocean presentation and brokers note made me question if I should invest directly in MOD. I have concluded that investing in MTR offers the greatest potential.

If MOD and MTR merged (after the KEMCO split), this would remove the requirement for investors to make the decision and also simplify the acquisition process, if a major copper business was interested in the business. 

Investors who invest now are in at basement level prices. It’s just a matter of sitting and waiting for the BOD’s of both businesses to deliver.

#RGM Metallurgical coal

The market for metallurgical coal in the United States is increasing predominantly because it is required for steel production.

The following table indicates some key reasons as to why the price of steel is increasing.

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With the positives around steel it is hardly surprising we are getting coal companies announcements such as:

  • Contura Energy are in the middle of a $162m IPO (see here).
  • Warrior Coal have record income of $129.9m in Q2 2017. Warrior’s highly successful second quarter validates their value proposition as the only publicly traded ‘pure-play’ hard coking (metallurgical) coal operator in the U.S. (see here).

U.S Coal global research firm IHS Markit also pointed out that metallurgical coal revival isn’t just dependant on Trump infrastructure projects.

Probably the single biggest driver of the surge in exports is that there is international demand for U.S. metallurgical coal right now. “That is a function of the market rather than the political environment.”

Regency Mining are well placed when production commences to deliver much needed metallurgical coal.

It would appear the recent RGM RNS indicating coal projects are not now going to be progressed piecemeal but the ‘big picture’ route taken is based on some solid foundations..