Joel’s Resource Report (20 Sep 2019) #RRE #SXX #ARCM

Joel’s Resource Report (20 Sep 2019) #RRE #SXX #ARCM

Joel is away on business again and he sends us this roundup for the resources space.
RockRose Energy (RRE)

Interim results due next week. The results will demonstrate just how to cheap the company is – likely negative enterprise value or near it. The company will also likely announce a dividend which should bring the share into the attention of income investors. RockRose continues to be nearly 40% of my portfolio and therefore my highest conviction position.

JKX Oil & Gas (JKX)

The share price is back to where it was a year ago. The balance sheet is improved, production is up by about 30% and a new highly experienced BoD has just been appointed which addresses some of the governance issues. JKX mostly produces gas and with European and Ukrainian gas prices starting to increase as well as predictions for a cold winter, the shares look cheap to me.

Arc Minerals (ARCM)

ARCM has announced more high grade intercepts up to 2.79% copper over 17.5m, and new targets. Shareholders were updated on the company’s progress in a conference call earlier this week. Investors can look forward to beginning to understand the type of resources that are at the numerous targets over the next 6 months.

Sirius Minerals (SXX)

Sirius announced that its financing had fallen through and the shares tanked yet again. The company continues to blame market conditions but quality projects like Salt Lake Potash’s continue to get funded.

I feel for shareholders who have taken a hammering with some highly unsophisticated investors putting all of their cash into the project and wiping out their children’s inheritance. The government has not provided the lifeline some were hoping – evidently they don’t believe it’s of strategic importance to the UK – a shame they don’t reconsider projects like HS2 as well

I continue to view the shares as uninvestable especially as the company’s equity is valued at £300m and could be worthless in the next 6-12 months.

Salt Lake Potash (SO4)

Salt Lake Potash continues to progress its project and improve the project economics, announcing that its product has the potential to command a 20% premium 20% premium to normal sulphate of potash products.

Salt Lake Potash’s Chief Executive Officer, Mr Tony Swiericzuk, said:

“The outstanding results from the Pilot Plant testwork confirm the addition of KCl into the process will enable Salt Lake Potash to utilise the excess sulphate within the Lake Way brine to produce additional premium grade SOP. This is a significant outcome for the Company and will strengthen the already compelling economics for the Lake Way Project. We are focussed on finalising the BFS which will reflect the Pilot Plant results and confirm the excellent potential of Lake Way.”

Till next week – hopefully it’ll be cause for celebration as I holiday in Florida when RockRose announces results!

The author has financial interests in securities discussed in this article.



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