Morien Resources (TSXV: MOX) is extremely likely to hit a new 52-week high and explode this week.
MOX has 50.96 million shares outstanding for a market cap at $0.23 per share of CAD$11.72 million. MOX has CAD$2.52 million in cash and no debt for an enterprise value of CAD$9.2 million (USD$7.2 million).
Currently, Dalian Coking Coal prices are up to a new all-time high of US$432.54 per tonne after gaining by a record 30% last week! U.S. coking coal prices are currently US$180 per tonne.
With Chinese coking coal selling at a huge premium above U.S. coking coal, there is huge demand for coking coal that can be exported to China. We are confident that a transaction will soon take place to reopen the Donkin Coking Coal Mine due to its close proximity to a deep water port for exports to China and the fact that it is already fully permitted/developed with only a small CAPEX investment required to fix some falling rocks in a closed off section of the mine (this is extremely common for all coal mines and Kameron Coal's Donkin injury rate has been 75% less than the U.S. national underground coal mine injury rate).
The Donkin Mine at full production will produce 3 million metric tonnes of saleable coking coal per year. MOX's gross production royalty is worth 2% on the first 500,000 metric tonnes per quarter and 4% on all production above 500,000 metric tonnes per quarter.
Using a price of US$180 per tonne: At full production of 3 million tonnes per year, MOX could earn USD$14.4 million per year. The mine life is 30 years and we believe a fair valuation for MOX would be a multiple of 10X its potential annual royalties of USD$14.4 million per year. This would value MOX at an enterprise value of USD$144 million or CAD$184.56 million, for a market cap of CAD$187 million, which equals a MOX share price of $3.67 per share.
MOX could be our next 1,000% gainer!
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