Regency issue newsletter highlighting their plans for coal production (see here).
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.
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.
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.
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.
Maybe as the FCA are ineffective the Americans will one day swoop and arrest those who blatantly manipulate the stock market.
The Americans take years to act but when they do action is swift.
NB: If you are a private investor and looking for a forum free of trolls, join Blueshare.
The RNS on the 19th May (see here) regarding the issue of new shares completes the purchase of iter8.
The acquisition of iter8 provided a route for Quindell to enter the North American Insurance Market, particularly Canada. The iter8 website states business acquired to aid expansion of Quindell Insurance technology into North America (See here).
Acquisition also provided access to the customer base of iter8. Examples of blue chip customers being:
What is interesting is the original plan was for shares to be issued in three equal instalments with the last instalment not due for another 12 months (see here).
Why have Quindell decided to conclude the deal 12 months early?
Could it be they are preparing the ground to list part of the remaining business in North America?