Proactiveinvestors recommends
Additional Information
Market: ASX
Sector: General Mining - Coal
EPIC: RES
Latest Price: A$0.33  (0,00%)
52-week High: A$0.88
52-week Low: A$0.33
Market Cap: A$82.73M
1 year chart
digital-look imported chart image
1 day chart
digital-look imported chart image
Watchlist/Portfolio

Add to watchlist:

Only registered members can add into watchlist !

Register here !
Resource Generation
resgen.com.au

Resource Generation (ASX: RES) is developing one of South Africa’s largest remaining coal deposits, with the company's focos on the Boikarabelo tenements, in the Waterberg region of South Africa.

 

The strategy for the company is to develop high grade “energy” related resources into viable and competitive mining operations. Accelerated shareholder value will be delivered through the delivery of physical mining activity.

Full Resource Generation profile here
Is RES a Buy, Sell or Hold?Get your FREE analysis of RES
Pdf

Broker places $1.15 price target on Resource Generation

26th Mar 2010, 10:09 am

Australian stockbroker Shaw Research has released a company report on Resource Generation (ASX: RES).

It placed a 12 month share price target of $1.15 on RES.

Shaw said, "plans to develp the Boikarabelo coal project in the Waterberg area of South Africa has progressed following completion of a prefeasibility study (PFS).

Planned output is now 11mtpa of ROM coal producing 4mtpa of domestic and 3mtpa of export thermal coal by 2013.

The larger export tonnage, higher export coal prices and reduced capex have considerably improved our project NPV to A$873m (100% basis).

RES is hopeful of obtaining coal contracts and mining rights within 12 months so that mine construction can commence.  Completion risks remain significant but the stock offers considerable upside for the patient and risk-tolerant investor.   Reserves of 603mt and resource of 1.7bt have been identified and both categories are expected to increase.  Listing on the Johannesburg stock exchange is planned by mid-2010.

Shaw values RES's 74% of Boikarabelo Project at $646m, equivalent to $3.86/share, unfunded and based on the company's preliminary feasibility (PFS).

The broker said its target price of A$1.15 per share has been derived using a 75% discount to account for risk relating to timing and possible production and cost variations prior to completion of a BFS.  The value of cash and land has also been taken into account.

The target valuation was in anticipation of likely significant share price appreciation assuming completion of key milestones relating to offtake contracts, obtaining mining rights and arranging adequate funding for project development."

 

No investment advice

The Company is a publisher and is not registered with or authorised by the Financial Services Authority (FSA). You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.