Aus dem 2. ADVFN Thread.... ich gebs ja zu, ich hab das
-Fieber"I posted this to lse.co.uk- but cos it's a long one, feel it ought to go here too. It's aimed at those of you who don't know the context for RGM, it's taken mainly from notes I took from the interview with the chairman of regency on the mineweb podcast:
I am going to stick my neck out here and say this stock is a multi-bagger over the next 12-24 months, and I will be filling my boots with it.
RGM already has a portfolio of Australian mining companies and a stake in Red Rock:-
"Since listing on AIM on 22nd February the company has seen the listings on AIM of Thor Mining plc (AIM: THR) on 29th June and of Red Rock Resources plc (AIM: RRR). Regency held 8.2m shares in Thor at listing and 101.25m (now 103.25m) shares in Red Rock (60.1%)."
Their portfolio is worth more than the share price (when it was around 2p).
During 2008 they will commence the extraction of Nickel ore from their recently purchased Mambare project.
Nickel is a scarce resource which has been rising rapidly in value as international demand increases. Nickel is needed to make stainless steel which is used in the production of cars, washing machines, air conditioners, cutlery etc. etc.
Two thirds of the world's nickel is in the form of sulphide deposits in Russia and Australia. One third is in lateritic reserves. These until recently have become uneconomical to extract from. The extraction process is extremely expensive and subject to equipment malfunction and implementation problems. One extraction machine costs half a billion dollars.
Regency Mining is not planning to extract the ore on site.
Their plan is to transport the iron ore, unrefined, up the Yangtse to be smelted into pig iron and the nickel separated. The chinese get the iron for free, RGM gets paid for the Nickel and COBALT which is contained in the ore.
The site is easily accessible by road (110km to port). This might not seem like a big deal, but if you have been to Papua (I've been to West Papua and PNG is no doubt similar), it's about the most inaccessible place on the planet.
The reason for the existence of the road is that the oil palm industry is already active in the area, and Regency can use the road to transport the ore and take it to the nearby port.
Regency has recently raised a bit of money to pay for more analysis with a ground penetrating radar. They estimate the cost of the further analysis will be 30-40% of £500k so £150k-£200k and they expect to be extracting ore in 2008.
To give you some idea of how much Nickel they have here are some figures:-
The top layer has 200 million tons with Nickel concentration of 1.5% and also 830m tons at 0.78% Nickel
The layer below has 1.25-1.5% nickel (according to a few small profiles). there is additionally .1% COBALT (which costs about $25-$30 per pound).
They expect to be shipping $500m of Nickel a year.
The market cap is currently £6.38m (170,226,376 shares at 3.75p).
The Chairman of Regency Mines thinks his company is the most undervalued on AIM. From what I have found out today, I wouldn't be surprised if he was right."