MOX was originally suggested by NIA on May 28th 2021 at $0.185 per share.
MOX remains our #1 favorite coal stock today and we believe its largest gains are likely to occur over the next few months.
Morien Resources (TSXV: MOX) owns a 2%-4% gross production royalty covering Kameron Coal's Donkin Coal Mine. MOX's royalty is worth 2% on the first 500,000 tonnes of quarterly coal production and 4% on all quarterly coal production of above 500,000 tonnes.
The Donkin Coal Mine contains a massive indicated coal resource of 227 million tonnes plus an additional inferred coal resource of 254 million tonnes. The probable mineable coal reserve alone is 58 million tonnes!
The Donkin Coal Mine is fully permitted to produce 3 million tonnes annually with a mine life of 30+ years! At maximum production capacity of 3 million tonnes, MOX's royalty will average 2.667%.
Kameron Coal has fully developed all of Donkin's above ground infrastructure. Since 2015, Kameron Coal spent $300 million constructing the Donkin Coal Mine. Including previous infrastructure built by the Nova Scotia government, a total of $600 million of inflation adjusted CAPEX has been spent developing Donkin.
The parent company of Kameron Coal also owns/operates the Vista Coal Mine in Alberta, which is one of Canada's largest thermal coal mines. Donkin produces a very high-quality coal that is marketable overseas and locally as a low ash, high energy thermal coal, and also overseas as a semi-soft coking coal! The owners of Kameron Coal are also the largest MOX shareholder through a wholly owned subsidary called Atlantic Royalty LLC.
Donkin first launched production in 2Q 2017, but only operated on a small scale through 1Q 2020, when it was placed on care & maintenance due to the COVID-19 scamdemic. When Donkin was operating from 2Q 2017 through 1Q 2020 it was in its Development Phase of the operation where two coal sections were actively developing Donkin's main underground infrastructure and the first production panel to allow for the long-term and highly active Production Phase, which will incorporate retreat mining to achieve average production of 2.75 million tonnes annually. At average annual production of 2.75 million tonnes, MOX's royalty will average 2.545%.
When Donkin was last in production in early-2020, MOX traded up to $0.65 per share. Since then, coal prices have quadrupled, which means MOX has the potential to rise to $2.60+ per share after Donkin reopens. Recent media reports indicate that Kameron Coal is preparing to reopen the Donkin Coal Mine in the near-future.
MOX has $2.17 million in cash and no debt. MOX has only 50.59 million shares outstanding.
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. This message is meant for informational and educational purposes only and does not provide investment advice.
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