Energy and Minerals Australia Limited (EMA.ASX) is a new uranium listing planning to raise $5mil through the issue of 12.5 million 40c shares. The offer closes 2nd May 2008 and the scheduled listing date is 23rd May 2008. You can download the prospectus from www.eama.com.au. The company is exploring the Mulga Rock deposits, previously explored for uranium by a Japanese company, though EMA will also investigate reported cobalt, nickel presence. It should be acknowledged that the principals of the company acquired this project in 2000, and now its become the basis of a listing. It might be pertinent therefore to know whether the company has performed any exploration on the project in accordance with the minimum expenditure requirements of the WA State Legislation. Why? Because if they haven't then the assets dont look too valuable.
I am actually surprised that this company is able to list given the dubious claim it has on the tenements under consideration. I dont doubt the WA Dept of Minerals will validate the sellers title to the area, if only because the title is being offered to the public. In a sense I think the public is being used to validate the title of the vendor. Thats a sorry state of financial regulation. a significant conflict of interest. The vendors could argue the title was always intended for living, in which case it seems they were not sincere in their contract with the WA governmet to meet the minimum standards of exploration expenditure.
Anyway thats my independent opinion - and no one is paying me. As far as the Mulga Rock deposits are concerned, they may as well be called the 'Mulga What?' deposits because I see no compelling value within the immediate vicinity of the Ambassador and Emperor deposits. Why? Well 0.2 metre mineralised intervals spell consistently poor results. So much for a 'trophy' project. So where is the value in this listing. I can't find anything. Certainly the surrounding area has exploration potential, particularly for sandstone-hosted deposits, but its not something I would pay much for. So the next question is - what are shareholders paying for this opportunity? What is the vendor consideration? The Japanese department spent $11.77mil in this project area - as only a Japanese bureaucrat could do. Dont take this as a sign of value. In Japan they build soccer stadiums that can't even cover their operating costs. I am also inclined to dismiss this company because its exploration will end up being grassroots. There are much better buys.
Finally got to the vendor consideration for the listing - on that point the company sponsors are very reasonable. They are valuing their equity at cash value. I would still not be interested in this company as it just doesn't have compelling, tangible upside. Low quality potential in fact.
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Andrew Sheldon www.sheldonthinks.com
I am actually surprised that this company is able to list given the dubious claim it has on the tenements under consideration. I dont doubt the WA Dept of Minerals will validate the sellers title to the area, if only because the title is being offered to the public. In a sense I think the public is being used to validate the title of the vendor. Thats a sorry state of financial regulation. a significant conflict of interest. The vendors could argue the title was always intended for living, in which case it seems they were not sincere in their contract with the WA governmet to meet the minimum standards of exploration expenditure.
Anyway thats my independent opinion - and no one is paying me. As far as the Mulga Rock deposits are concerned, they may as well be called the 'Mulga What?' deposits because I see no compelling value within the immediate vicinity of the Ambassador and Emperor deposits. Why? Well 0.2 metre mineralised intervals spell consistently poor results. So much for a 'trophy' project. So where is the value in this listing. I can't find anything. Certainly the surrounding area has exploration potential, particularly for sandstone-hosted deposits, but its not something I would pay much for. So the next question is - what are shareholders paying for this opportunity? What is the vendor consideration? The Japanese department spent $11.77mil in this project area - as only a Japanese bureaucrat could do. Dont take this as a sign of value. In Japan they build soccer stadiums that can't even cover their operating costs. I am also inclined to dismiss this company because its exploration will end up being grassroots. There are much better buys.
Finally got to the vendor consideration for the listing - on that point the company sponsors are very reasonable. They are valuing their equity at cash value. I would still not be interested in this company as it just doesn't have compelling, tangible upside. Low quality potential in fact.
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Andrew Sheldon www.sheldonthinks.com
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