Strategic Natural Resources. Miner to Major company in the making

2 Million tonnes sold.

Take a good look at this company there’s an awful lot of interest beginning to grow. Particularly among Privateers who think that Strategic could become a multi-bagger over the next few months.

Strategic Natural Resources PLC (“SNR”) was established on 5 October 2004 as a vehicle to develop, own and manage natural resource extraction enterprises in Southern Africa. As its first project, SNR acquired control of Elitheni Coal in the Eastern Cape some 200 miles north-east of Port Elizabeth. The principal assets of Elitheni are a new order mining right over 92 km2 as well as new order prospecting rights over an additional 1,700 km2 for coal which it holds in the Eastern Cape, South Africa.

The company are a miner and at present the big question or anchor holding them back is funding. However they do have some mouth-watering assets (coal) that if managed,mined and funded correctly could see this company dramatically rise over the coming year. I’ve had literally several days of digging around asking various contacts where they see this company in 12 months. The vast majority all see the company sp significantly higher than were it currently sits but all temper their forecasts with the caveat of funding! We’ve had a couple of rns releases this week (as foretold) one was Director buys and the other was company share options.. If you look at the news in its entirety over the last few months it looks and feels as if the Board are quietly positioning themselves to reap the benefit from funding news which several sources think is imminent. They’ve also recruited very well over the last several months which should be seen as another pointer re’ the funding concerns expressed by potential institutions. (If their Board and management are experienced and competent then funding is easier to negotiate) Now there’s no doubt that they will get the funding in place the big question is what form this funding will take; ie institutional placement or general placement open to existing holders. My suspicion is that it will be a combination of the two.

Strategic Natural resources Chief Executive (David Nel)  reported in early June that the company strategy is; ” now well advanced converting our plans into realities”.  And they expect this year will be “a year filled with enormous activity and delivery”  which should “lead up to the successful shipment of our first vessel of coal.” Now that was back in June of this year so things will or should have moved on by now. They must be close to resolving the funding issue. There was a fly in the ointment here with a disputed loan which in the end cost the company about £1.3 million pounds to settle now even though it was a kick in the teeth at least it’s now settled. Which leaves the runway clear for Strategic to focus on their Elitheni mine asset which has already  sold the first 2 million tonnes of coal in an agreement with the Trasteel Group.The off-take of the coal is over a two-year period and this 2 million tonnes actually represents approx’ 1% of their existing resource so you can imagine as to just how much coal there is at the Elithene mine. This is a major coal miner in the making subject to funding. I wouldn’t concern myself with the operating loss/debt as if as looks likely they get the funding then this will be wiped out with a stroke of the pen.

There’s much more to them so get researching and stick them on a watch-list for news regarding their funding.

Viva!

Daniel.