Tag Archives: North America

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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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.

#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..

#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.

 

 

 

 

#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.

Stock Market Manipulation

Maybe as the FCA are ineffective the Americans will one day swoop and arrest those who blatantly manipulate the stock market.

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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.

iter8 Quindell RNS implications.

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: imageimageimage imageimageimageimage image

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?