JAL - Jameson Resources

ann out this morning regarding placement of shares to raise funds

to assist with the recomissioning of the basin coal mine ...

Click to expand...

in british columbia

6,770,000 @ .25 to raise $1,692,500

resource upgrade progressing, recommissioning study to be completed august (current resource 19M t)

mining and processing re-start within 12 months approved (low-cost open pit mine 250,000t pa with staged expansion to 1M t pa, re-commissioning expected to take 4 months)

interest from potential off-take partners

sp currently up 16% on minimal volume

cheers

Interesting news last night (14th Jan 2010) for JAL with the Bank of America Corporation becoming a significant (if not the greatest) shareholder!

I noticed Bank of America also increased there stake in REY , (seems they could be bullish on thermal coal?)
So when I saw them take a bite of Jal I thought I might have a look
Haven't done much research yet

But

JORC 123mt
JORC upgrade overdue was meant to be out Dec
Feasibility study 1st quater
Production late 2010 (1st year 250,000t ramping to 500-700)
Capex est $20 mil
Opex $65
cash surplus $20/t

analysis (from another site) of financial projections for Jameson Resources Canada coal project.

The expanded mine case BFS is due out Q1 this year. I guess JAL had some revised estimates they wanted incorporated in the draft BFS and had Norwest ammend to their liking,

They have estimated $20 operating margin per tonne.

Initial estimates of 500000 tonne operation per annum. This gives operating profile of 500k x $20 = $10m. Lets say repayment of interest of $1m gives $9m x 0.70 = $6.3m NPAT.

Given the above and a market PE of 13, then we get 6.3x13 = $81.9m / 62m = $1.32 per share.

Now lets revise our estimate when JAL increases to 1m tonne a year production. That gets us to 2 x 1.32 = $2.64 a share.


Obviously there is further upside given any increase in the price of thermal coal.


JAL will be a coal producer by years end - they have sound management and all the necessary infrastructure is in place as it is in an established coal province. There is more than enough capacity at port as well. JAL is aiming for a million tonnes - there is at least 7 million tonnes excess capacity at the port. This one has slipped beneath the radar of most people and at present is proving to be a bargain. WISEOWL analyst report has a price target of 92.5c (current price 32.5c) and states their projections will change as the year progresses and they transform from being a developer to bona fide producer.

MC - $48m
SP - 31c
Shares - 154m
Options - 9m
Cash - $7.2m

Major Shareholders
Top 20 Shareholders 59%
Directors (Fully Diluted) 14%
Argyle Group 12%
Macquarie Bank Ltd 10%

David Fawcett – Non Executive Chairman
• Mining engineer with over 35 years coal experience in western Canada
• Proven track record for initiating and advancing new coal mine development
• Awarded the 2011 Canadian Institute of Mining, Metallurgy and Petroleum’s Coal Award for his role in reviving the northeast British Columbia coal industry
Founder and President of Western Canadian Coal Corp
• Led the acquisition, exploration and early development of Perry Creek (2mtpa), and Brule (1mtpa)
• Western Canadian Coal Corp was taken over byWalter Energy Inc in 2011 for C$3.3 billion
Chief Operating Officer of Northern Energy and Mining Inc (NEMI)
• Advanced Trend (1mtpa) through exploration, regulatory and feasibility processes
Owner of Murray River Coal andWapiti Coal Ltd
• Acquired large package of coal licenses in the Tumbler Ridge region
• Vended properties into Hillsborough Resources Limited
• With these metallurgical coal properties attracted Anglo Coal to NE BC which led to development of Peace River Coal
Senior Vice President of Hillsborough Resources Limited
• Instrumental in the development of several coal projects in the Peace River Coal Fields
• Hillsborough was taken over by Vitol Energy in 2009

Crown Mountain Project
*Located in the Elk Valley, British Columbia’s most prolific coking coal field
*90% Interest in Project with option to acquire remaining 10% for C$2m
*BC Ministry of Energy and Mines has approved and issued all five coal licenses
*Line Creek and Elkview HCC coal mines within 15km of Crown Mountain
*Project is 15km by road from the main rail line connecting to deep water coal ports
*Targeting coking coal seams amenable to open pit mining
*Historical mapping and drilling has outlined multiple coal seams ranging in thickness up to 7.5m
*Down hole geophysics show the seams appear to correlate with the No. 8, No.9 and No. 10 seams at Line Creek
*Drilling program to include up to 33 holes
*Exploration to commence August 2012

Peace River Projects
*100% ownership of Dunlevy and Nexx projects (Carbon East, Peace Reach, Graham river) with metallurgical coal potential within the Peace River coal field
*Coal license applications cover 46,000 hectares of prospective ground
*90km away from the main rail line connecting to the 3 deep water coal ports
*Projects along strike with 4 operating coal mines and a number of resource projects under development
*High level of corporate activity within Peace River coal field in past 12 months - Walter Energy, Xstrata, Anglo Coal, Cardero


Dunlevy
*Construction of forestry roads has exposed multiple coal seams up to 3.5m
*Exploration to date has included field reconnaissance and trenching in 2009, and geological mapping in 2011
*Coal measures in the southern half of the project occur in a gently dipping syncline with the western limb extending over some 10km x 4km
*Coal interpreted to be north extension of the coal bearing Gething Formation
*Staged drilling program with the first phase to include up to 20 holes
*Drilling to commence on receipt of regulatory approvals


JAL looks like a really good prospect, worth investigating further.
David fawcett's CV alone, is a strong pull factor towards JAL.
While alot of specs have suffered over the last 12 months, JAL has performed extremely well.
Have we given Canada a free kick with our Carbon tax, and the Greens railing more heavily each day against coal?
This must be taken into consideration when looking at a coal play in Aus or overseas.
I would love to put this in my Low Cap, Low Liquidity Thread, but the workload I have for that is too high already.

Drilling program commences at Crown Mountain


Jameson Resources announce that drilling has commenced on its Crown Mountain coal project located in south east British Columbia, Canada. The primary objective of the drilling program will be to confirm coal quality, seam thickness and acquire all necessary data for resource estimation purposes.
The recently started drilling program includes up to 22 holes targeting two prospect areas where previous exploration has intersected coal seams ranging in thickness from 0.5m to 7.5m. Drill holes are designed to penetrate the entire coal bearing stratigraphic sequence and will range in depth from 45m to 240m.
Down-hole geophysics will be undertaken on all holes. Coal quality test work will be carried out on selected samples and will include proximate analysis, ultimate analysis, petrography, washability and a selection of other tests for metallurgical coal.
The Company expects to file its inaugural JORC/NI43-101 compliant resource for the Crown Mountain project by the end of 2012.

Completion of Drilling at Crown Mountain

Jameson Resources announce that its wholly owned Canadian subsidiary NWP Coal Canada Ltd has successfully completed the first phase exploration program on its Crown Mountain coal project.
The program was completed ahead of schedule and under budget. Twenty‐five reverse circulation holes were drilled for a total of 3,725m along with trenching and geological mapping.
The majority of holes terminated in the basal sandstone with the average hole depth being 149m.
Coal seam intercepts generally conform to the database from the previous limited exploration in the area, although some unexpected seams were encountered on a local basis which will require further evaluation before their potential can be determined.
Samples were collected across coal seam intercepts from the majority of holes and trenches. All samples have been delivered to Birtley Laboratories in Calgary for coal quality test work which will include proximate analysis, ultimate analysis, washability and a selection of other tests for metallurgical coal.
First results from the coal quality test‐work are expected within four weeks.
NWP is awaiting approval by the British Columbia Ministry of Energy and Mines on a supplemental Notice of Work and may, depending on timing of that approval, elect to perform additional exploration during October.

The objectives for the additional drilling are to:
a) further define the resource base as currently modelled
b) evaluate the potential to expand beyond the current resource base

The Company expects to file its inaugural JORC/NI43‐101 compliant resource for the Crown Mountain project by the end of 2012.

Having just revisited JAL, I am a little disappointed my eye has been off the stockmarket for a period of time. If I had've seen the pull back in JAL's SP to the 22c mark in January I would have very likely pulled the trigger on a parcel.
I will have to set up an SMS alert on any future SP weakness for JAL.
Easy enough to say in hindsight, I guess but it is one of my preferred 'unrecognised' coal stocks. The only roadblock would be the MC:Cash ratio.
I don't see them getting to far on $4m, so further dilution is unavoidable. This may take it outside my investment perameters and consign it to the "coulda, woulda, shoulda" bin.

To be honest there is an Australian based coal spec that I do favour over JAL.

MC - $51m
SP - 31c
Shares - 157m
Options - 9m
Cash - $4m

Latest investor presentation here.
http://www.asx.com.au/asxpdf/20130312/pdf/42dlk6r3hx9x6h.pdf

Latest Research notes here.
http://www.jamesonresources.com.au/index.php/investor-centre/analyst-coverage

Jameson Resources up 24% to 15.5c today after announcing that it has reached an agreement with Bathurst Resources to provide funding to advance the Crown Mountain project in British Columbia, Canada.

Bathurst (through a wholly owned Canadian subsidiary) will initially invest C$4 million to fund the 2018 summer exploration program. Once exploration results are reported, Bathurst has the option to invest an
additional C$7.5 million to sole fund the Bankable Feasibility Study and the permitting required to construct a mine. Once the BFS is complete and the required permits have been issued, Bathurst has the option to sole fund the first C$110 million of construction costs, in the form of cash. Upon fully funding all tranches, which total C$121.5 million, Crown Mountain will be a 50/50 joint venture between Jameson and Bathurst.
No Jameson Resources ordinary shares are being issued in this transaction.

Gap up and big move north today for JAL. Nice follow on from Friday's initial move up. Currently at 22c and at its high of the day. Sell side of the market depth looking very thin.