Closed strong and ready for a re-rate buying volume showing it's head today– the best 'no news' day finish since March 2015 despite being pushed down at close.
Looking back to the left on the chart, Aspire SP has been sliding since a spike to 18c in Jan 2013 as Noble Group loaded up, Minegolia was still on the boil and Proactive investor were valuing the company at $0.20-$0.25.
"Recently, a revised Pre-Feasibility Study showed the Ovoot Coking Coal Project in Mongolia could become one of the lowest cost producers of coal into China. Life of mine ex-mine gate cost is estimated at $36 per product tonne of quality coking coal.
Ovoot ranks as the second highest coking coal reserve in Mongolia. It also ranks in the middle of Tier 1 coking coal assets based on reserves and marketable coal. With a 96-97% vitrinite content it identifies Ovoot as one of the highest value in-situ coal deposits globally.
Following the announcement, Proactive Investors said: “With a current EV/Resource Tonne of $0.12 and EV/Reserve tonne of $0.14, ranks Aspire Mining at the lower end of coal developers relative to its peers.
“On our analysis, we calculate a valuation of Aspire Mining at closer to $0.20-$0.25, based on the value of the resource in the ground and applying an appropriate discount for sovereign risk, infrastructure and funding risk relative to projected returns.”
http://www.*.com.au/companies/news/...ights-on-back-of-noble-group-deal--38143.html
The SP based out at 0.005 and bumped along the bottom until the work that Aspire have put in the background (investing $60m) resulted in confirmation that rail to the resource was included in the New Northern Rail Economic Corridor - Silk Road initiative and would receive priority funding from the Chinese Government/banks.
Aspire require $15m to fund the work required to complete the final banking feasability study, once that funding is confirmed, Aspire should attain that valuation closer to $0.20-$0.025 Proactive Investor mentioned. The discount for sovereign risk can be removed as the current political/economic climate in Mongolia has switched to pro-development in order to pay down the huge amount of debt they have accumulated. The discount for infrastructure will not apply, in fact there should be huge value added for the 30 year lease on what will become a vital artery from China to Europe. The discount for funding risk should be reduced as the infrastructure cost is separate and the mine is relatively low cost, coking coal prices are making a spectacular recovery, plus there is possibility of an off-take agreement with Tavan Tolgoi.
(20min delay)