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LRL - Leyshon Resources

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Nice to see someone in Oz has picked up on this stock (It is an Aussie company after all). The boards over here in the UK are dead. I've been banging on to my mates for a few weeks about a bottom forming and LRL's inherent value but no one seems interested. If the announcement on Wednesday doesn't get the price moving, then I'll eat my golf clubs !!
 
The only technology I know that could economically get the gold out of this waste is the Albion Technology currently going through initial operation in the DR by PGI. It's current'y operating but with no official gold pour or costs per ounce yet, I'm on the fence.

Is this the same management who failed in China?
 

I would hardly call this a failure in China.
http://www.asx.com.au/asxpdf/20090922/pdf/31kvjtjnjjt123.pdf

It is not the project that caught my eye, it was the cash:MC position. I can't think of another one like this off the top of my head.
They are in a halt regarding an acquisition, so maybe more success (or failure) in China, or Mongolia, which they seem to mention alot.
 



If you invested 5 years ago, LRL's price is down by approx 60% (UK prices). However, the big drop in the price took place during the 2008-09 credit crunch when there were doubts that Atherley would be able to raise finance to complete the project he had already started. i.e. Wipeout. The bottom in the UK was around 3 pence. If you had been brave enough to invest at that point you'd be on a 3 or 4 bagger. So as with all investments, good timing = good profits. Atherley seems to have learned his lesson and is heading into this Chinese/Mongolian coal project (if that's what is to be announced on Wed) with a decent bank balance. It's refreshing to see a small miner with a sensible streak instead of a snake oil salesman with a pipedream. Hopefully, he and we will be rewarded this time.
 
Proposed Acquisition Of Stake In China’s Unconventional Gas Revolution

Leyshon Resources announce that it expects to finalise terms shortly to acquire a company which holds a 100% interest in the Zijinshan Production Sharing Contract located on the eastern fringe of the prolific Ordos Gas
Basin in Central China.

Respected industry advisor RISC has advised that in its view the Zijinshan Gas Project contains gross prospective resources that are potentially large due to the confirmation of the presence of unconventional gas, with in place estimates in the range 1 to 3.8 Trillion Cubic Feet. The Ordos basin generally offers one of the highest potential IRR’s in China.

RISC does however caution that whilst the opportunity appears attractive it contains significant risk which must be mitigated via the acquisition of appropriate data and completion of a pilot plan. The Company plans to retain RISC as its advisor in the exploration and development phase of the project.

Under the proposal Leyshon will acquire a 100% interest in Hong Kong Company Pacific Asia Petroleum Limited (PAPL) from Houston based CAMAC Energy Inc. Leyshon is currently undertaking final due diligence and the parties are expecting to finalise a Share and Purchase Agreement to complete the transaction by the 27th July.
PAPL is well established in the Oil and Gas Exploration sector in China and under the proposed terms of the acquisition its experienced technical team will be retained. The team has already completed four wells under the Zijinshan Production Sharing Contract, two of which have been cased, and acquired 160 kilometres of 2 D seismic data which has been used to identify several major gas exploration targets.

The initial exploration focus will be on drilling several new wells to test extensions to nearby major shale gas discoveries and production testing the cased wells.

The Zijinshan Production Sharing Contract is with one of China’s major oil and gas companies which has retained the right to buy back a 40% interest in the contract at the completion of the exploration phase and to jointly fund the project into production.

As previously announced the Company remains firmly of the view that, in light of the expanding demand for all types of energy within Central China over the next ten years, high quality energy assets located close to transport and distribution infrastructure will become increasingly valuable over time.

As a result, management is of the view that the acquisition and potential development of shale gas assets in the Ordos Basin has the ability to complement the Company’s potential energy coal acquisition in Xinjiang.
 
Acquisition Of Stake In China’s Unconventional Gas Revolution

Leyshon Resources Limited (AIM/ASX:LRL) (“the Company”) is very pleased to announce that it has signed a definitive share sale and purchase agreement for the acquisition of Hong Kong Company Pacific Asia Petroleum Limited (PAPL) which holds a 100% interest in the Zijinshan Production Sharing Contract located on the eastern fringe of the prolific Ordos Gas Basin in Central China.

Leyshon has acquired PAPL from Houston based CAMAC Energy Inc for a consideration of US$2.5 million in cash and the issue 10,000,000 fully paid ordinary shares.

The Company is not intending to seek the approval of security holders for the transaction unless ASX requires it under Listing Rule 11.1.2 or 11.2, and is applying to ASX for a determination as to whether security holder approval is required under the Listing Rules.
 
IN CASE YOU'RE WONDERING WHY THE BUY SIDE EXPLODED IN THE UK AT LUNCHTIME THURSDAY, THIS HIT THE WIRES.


China Unlikely to Replicate US Shale Gas Boom -Executive

7:42 AM ET on Thursday, October 18, 2012


By Jacob Gronholt-Pedersen

China is unlikely to replicate the shale gas boom of the United States in speed or scale, but low drilling costs and high local gas prices make it attractive to drill for unconventional gas reserves, says the top executive at one of the few foreign companies drilling for gas in China.
China has ambitious plans to sharply increase natural gas output in the coming decade by following in the footsteps of the U.S., where hydraulic fracturing has spurred a shale gas boom in recent years.
It recently set a target of producing 6.5 billion cubic meters of shale gas annually by 2015, up from virtually zero this year. It is also aiming to rapidly increase production to 60 billion-100 billion cubic meters a year by 2020.
However, these targets could be difficult to achieve due to a lack of technology and geological information about the reserves, Paul Atherley, managing director of AIM-listed Leyshon Resources Ltd. (LRL), told Dow Jones Newswires Thursday.
"If they want to reach those targets, they need to get out there and drill. And that's just not happening at the moment."
Initial estimates by the U.S. Energy Information Administration show China's shale gas reserves are even larger than those of the U.S.
However, the economics of drilling for gas "are very attractive," he said.
Drilling an exploration well costs only around $1.5 million, about a third compared with Eagle Ford, Texas, he added.
Australia-based Leyshon this year acquired the right to explore for unconventional gas in the Ordos Basin in Shanxi province in central China.
The company plans to complete drilling the first two wells this year and has committed $25 million to drill a total of 13 wells in the block by 2014.
According to initial estimates, the block holds potential reserves of up to 3.8 trillion cubic feet of unconventional gas.
A tender for 20 shale gas blocks announced last month marked the first time China allowed foreign companies to participate in joint venture bids as minority partners. The first round in June 2011 was limited to state-owned companies.
The prospect of drilling for possibly the largest unconventional gas reserves in the world has already drawn interest from international majors such as BP PLC (BP), Chevron Corp. (CVX), Total SA (TOT), ConocoPhillips and Eni SpA (E).
In March, Royal Dutch Shell PLC (RDSB.LN) signed the first major production-sharing contract, with China National Petroleum Corp., for exploration of a shale gas deposit in the Sichuan Basin.
Under a similar pact, the gas produced by Leyshon Resources will be sold to a local distributor at a fixed price of $7.2 per 1,000 standard cubic feet. In comparison, U.S. gas prices are below $3 now.
State-owned PetroChina holds an option to buy 40% of any project if Leyshon finds commercial gas reserves.

Write to Jacob Gronholt-Pedersen at jacob.pedersen@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires
October 18, 2012 07:42 ET (11:42 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc..
 
thanks for the heads up and an interesting story.

The chart has a large volume traded over the last week or two and may be a sign of an end to the sell down. Looking a move up to around 23c to show a change of trend. Currently having a look at 17.5c .
 
Not much action here, but the volume is certainly there,



Looking for a move up to commence soon or some sort of 3b to arrive.
 
LRL had slipped off my radar due to inactivity of the stock. Will have to revisit this one, time permitting.
 
springhill said:
LRL had slipped off my radar due to inactivity of the stock. Will have to revisit this one, time permitting.
Click to expand...

I have just torn out a chunk of hair as the same old story unfolds. Due to a sense that the market is not strong at the moment and based on no price action with LRL with all that volume, I sold this morning.
This afternoon it moves up 15%.

Will watch for a test for re-entry.
 

There has been volume since the beginning of October, but nothing on the level of what happened today. Speculative money coming in for a company with a near 1:1 MC:Cash ratio with a nice drill campaign underway, Mr Jeff?

Another area of interest from Sept Quarterly is the Buy Back has been increased from 5.5 to 24 million shares to be purchased on market no later than 12 September 2013.

From Sept Quarter
Leyshon Resources previously announced that the recently appointed management team at Pacific Asia Petroleum Limited (PAPL), which Leyshon acquired in August for US$ 2.5 million in cash and the issue of 10 million fully paid ordinary shares, has commenced drilling at the 708 km² Zijinshan block located on the Eastern flank of the prolific Ordos Basin, China’s second largest and one of the world’s major gas producing basins.
The new management team, which successfully drilled and appraised the recent multi-Tcf gas discoveries on the adjacent Sanjiaobei and Linxing blocks, has designed an initial three well programme to test for gas in similar formations over a 600 metre interval to a depth of approximately 2.4 kilometres.
The first of two wells are expected to be completed by the end of November with completion of the third expected in the new year. The total cost for drilling, logging, casing, fracking and flow testing the three wells is estimated at around US$ 5 million.
The wells are located within 10 kilometres of a tie in point on the Lin-Lin pipeline which supplies the growing demand in Shanxi Province where well head contracts have recently been struck in the US$ 6 - 7.5 per mscf range.
PAPL has a 100% interest in the exploration phase of the Production Sharing Contract (PSC) with PetroChina, which has the right to buy back a 40% interest at the development stage.
 


Mr Jeff,
Hang your head in shame. The high volume was CAMAC selling down their 10m shares to use the money elsewhere cos they're not as flush as LRL. Now that the selling is pretty much over, the only way is up. PA has been on a presentation tour in the UK over the last couple of weeks and the media / tip sheets have only just realised the value of an explorer with cash in the bank added to the mindblowing potential of the ORDOS drilling. Best to get back on and ride this possible multibagger like me. As ever DYOR and enjoy.
 

Further info from the UK. Today's volume was 6.34m shares which puts Friday's vol in the shade. Towards close of play, it was not possible to buy at the quoted ask of 16.25p. Buy pressure building late in the day in the UK so more upside probable down your way on Tues.
 

Tuesday vol in the UK down to under 1.5m shares. Dropped straight out of the starting gate (prob due in part to ASX Tuesday treading water) then bounced off 14p to end around 14.5p. Most pessimistic sum of parts valuation considering cash (12ppshare) + value of production sharing agreement (1.5ppshare) + small gold recovery margin at Mt Leyshon is at least that value. So you can buy the potential upside for zip.
 

Can you tell us about the potential upside and what exactly they have planned in the near term which might be catalysts preventing the sp. from cliff diving like mid- Feb ?
 
mr. jeff said:
Can you tell us about the potential upside and what exactly they have planned in the near term which might be catalysts preventing the sp. from cliff diving like mid- Feb ?
Click to expand...

Mr Jeff,
The difference between now and Feb2012 is volume and knowledge. The jump in Feb was due to expectations of an imminent coal agreement which didn't occur. Well done to PA for putting that one on ice. Also, Rathbones announced that they had sold down their major stake in LRL. However, check the charts. At that time, the rise happened on next to no volume and the share slipped back to be valued at less than cash in the bank. This time around, PA has got the message out in the UK and volumes have jumped. I don't know what the main chat boards are called in Oz but if you have a look at LRL on the iii.co.uk board in the uk going back to the start of last week, among the postings and the blatant rampers, you'll find several links to LRL presentations / news articles explaining the future.
For the chartists (if you believe in esoteric stuff), the 2nd Fibonacci retracement level seems to be holding.
As ever DYOR and enjoy the ride.
TT
 

Mr Jeff,
Same pattern as yesterday in the UK - Early drop (poss due to weak ASX lead) followed by steady buying at increased prices with last trades at 14.4p (approx 22cents). The 14p level has held for a second day - that Fibonacci geezer must've been a sharp cookie ! The downside is that the volume was pretty lousy at 380k but still well above the daily volumes before the CAMAC sales started last month. The good news is that LRL announced that the CAMAC overhang has gone. They're off to concentrate on their Oyo field in W. Africa.
TT
ps Hope you've had time to watch the interview with PA on Youtube.
 


The video is interesting, PA a real salesman, but he does make some valid points on cash backing, no need for immediate capital, and the 3 well program with drilling underway.
Due to this drilling, there may be a good bit more upside leading up to December results, based on cash at bank.

The low volume down day is a positive sign and if it comes through on the ASX today I will be looking to enter on it.
 
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