MHL
Mkt Structure
Shares
635m
Mkt Cap @3c = $19m Current
Mkt Cap @4c = $25m
Mkt Cap @5c = $32m Target 1 if CIG hit Oil on adjacent lease
Mkt Cap @6c = $38m
Mkt Cap @7c = $45m Target 2 if a major like Santos or Chineses National Oil farm in
Cash $2m
Ascent Capital
To begin with MHL is an Ascent Capital re-cap, however I always viewed it as the one that never made it,
When you consider their other re-caps, EXT 2c -15c, DYL 2c-65c, BLR 2c-25c, WMT 2c-30c, even MKY 2c-9c, thus MHL's 2c- 4c seems an anomoly, I would think its the last decent Ascent Capital re cap left to run.
So given their track record and the fact that you see the Steinpris name (Ascent Capital) still on the share registry suggests that more is still to come, in addition to this Ascent Capital control 50% of the Uranium projects and so this all makes for a very interesting mix.
Management
Oil and Gas The 2 main men are Scott Spencer and Ted Ellyard, both are the ex creators/architects of Hardman Resources, they took HDR from "
a market cap of less than $5m in 1994 to eventually over $1.5 BILLION"
Thus these two oil boys know what they're doing and as such MHL has been viewed by some such as Peter Strachan of Sotck Analysis as Ted Ellyards next oil and gas venture.
Uranium
The Uranium project is being managed by
Leopard
Leopard is an unlisted private company thats owned and controlled by Ascent Capital, its technical guys are James Pratt who is the Managing Director of Deep Yellow Ltd (DYL) and Dr Joe Drake-Brockman who is in charge of technical explorationa and development for DYL.
So effictively Leopard is a mini DYL, created by the creators of DYL and managed and run by the current DYL top boys who have
taken DYL from $5m to over $500m.
Projects
Kyrgyz Oil Oil and Gas, 100%, Kyrgyzstan
Surrounded by many prolific oil and gas producing basins which have produced probably a few BILLION BARRELS OF OIL and a few Trillion Feet of Gas, reserves are still a few Billion Barrels of Oil and a couple of Trillion feet of Gas.
The obvious comparison is as Warrick Grigor has done, to that of Caspian Oil and Gas (CIG),
"
Three years ago we spent a week in the Kyrgyz Republic, coming to grips with a junior oil stock named Afminex (it subsequently changed its name to
Caspian Oil and Gas). Back then, the shares were less than 1.8 ¢, the company had precious little cash, the market capitalisation was $8m and the oil price was only US$30-35/bbl.
Since then it has raised more than $20m, it has signed a joint venture with Santos and, independent of that JV, it is preparing to drill a number of shallow targets. CIG’s market capitalisation is approximately $170m
with the share price at 16.5 ¢. Our clients have done very well out of CIG, irrespective of whether or not they hit big oil in the forthcoming program."
So
CIG's Mkt Cap has gone from $8m to $170m yielding a return of 2125% over 3 yrs, however over the last 5 months the stock has yielded over 300% (5.5c - 16.5c)
Given CIG's current Mkt Cap of $170m I would expect MHL to move up to 5c =$32m if CIG hit oil, moreover if MHL, which is in the final stages of negotiating a farm out, gets someone like Santos, or even the Chinese National Oil Corp I would expect a re-rating towards 7c = $45m.
There is not too much info on target size or potential of MHL's Oil and Gas licences however the company is in the final stages of interpreting and reprocessing data to determine drill targets, priority survey area's etc etc in addition to this further survey results are due back,
So to summarise there are 3 potential catalysts fora re-rating of MHL because of its oil and gas leases
1. CIG striking oil
2. A farm in partner such as Santos or Chinese National Oil Corp
3. Siesmic/survey updates with target/potential size of oil targets
Kyrgyz Uranium Uranium, 50%, Kyrgyzstan,
Intial target 600k-700kt's@0.1% U = 1.5Mlb's U
This is just an intial target, base don historic work/drilling by the soviets, mineralisation is reported at surface and up to depths of 150m's over a strike of 800m's, they "mineralised seam widths" vary form 4.2m's to 6.6m's and avg 0.03% - 0.4% U
Its early days here but given the current mkt cap of other companies operating in Kyrgyz such as
MRO mkt cap $50m and NMR mkt cap $100m there is plenty of upside value for MHL once a JORC is released I would expect $20m of attributable value = 3c
As stated the Uranium project is being managed by
Leopard
Leopard is an unlisted private company thats owned and controlled by Ascent Capital, its technical guys are James Pratt who is the Managing Director of Deep Yellow Ltd (DYL) and Dr Joe Drake-Brockman who is in charge of technical explorationa and development for DYL.
So effictively Leopard is a mini DYL, created by the creators of DYL and managed and run by the current DYL top boys who have
taken DYL from $5m to over $500m.
Summary
- Chart wise support seems to be 3.2c and then 2.6c, however I doubt we will see it fall below 3c
- Its is a direct comparison to CIG, even Grigor is getting his clients who he got on to CIG very early days on to this, moreover any drilling success for CIG will boost MHL's prospectivity and thus SP
- A farm in deal for MHL's oil and gas licences is in the final stages, if its Santos or Chinese Oil watch out!
- The Oil managment is excellent being ex HDR architects who took the company from $5m to over $1.5Billion
- The Uranium management via Leopard is also excellent as its all the DYL boys who took DYL from $5m to $500m
- So given it is being run by the people he created so much value for HDR and DYL, as well as the fact that it can be compared to CIG for oil and MRO/NMR for the Uranium MHL seems cheap!