Monitor Energy Price $0.017 (-41%) Mkt Cap $11m Quality Fair Value Cheap
MHL is essentially an oil company with four licences in the Kyrgyz Republic, but also with 50% of an interesting uranium project in the same country, named East Kokmoinok. An historic Soviet resource of 770 t U is located at Kashkasu and awaits confirmation and conversion to JORC status. The Soviet work comprised a shaft to a depth of 160m and 800m of drives. The uranium mineralisation is hosted within coal horizons of the Jurassic sedimentary strata. The mineralised coal seams vary in width from 4.2-6.6m and the grade is typically 300- 2,000 ppm, with an average being close to 1,400 ppm. Lower grade mineralisation is associated with sandstones and siltstones adjacent to the coal. There have been historical uranium mines in the same uranium field at Turakavak, Agulak, Sashytash deposits. MHL paid US$230,000 to acquire a local company that held a 97.5% interest in East Kokmoinok, then sold a 50% interest to Leopard Minerals at cost price. Ongoing exploration costs are shared 50:50 between the two companies. Drilling was scheduled for the December quarter of 2007, but inclement weather and contractor issues have pushed back the timetable. The oil projects have been farmed out to Medina Group Ltd, a specialist oil and gas investor based in Hong Kong. Medina is to spend US$13m on exploration to earn 85%. Note that Medina has to fund mobilisation and demobilisation costs on its own account, in additon to the US$13m. This could be worth quite a few million dollars more to MHL. Investment Perspective: MHL is has been a favourite stock for day traders, often moving in large percentages on very high volumes – but that aspect of the stock market has taken a back seat for a while. Its main game is the oil and gas interests in the Kyrgyz Republic, which are now to be fully funded by the joint venture partner. The uranium interests are small at present but interesting. MHL is a cheaply priced energy stock. (Disclosure: The author and associates owns shares/options in MHL).
MHL Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
