spec buy analysis coal in africa

Read all about ATQ from broker analysis. Buy & hold for the upside as surely there cannot me much downside with 10c well supported . A good sign that RIO paid 7m for a piece of the action 'next door' to ATQ.

http://www.atomicresources.com.au/reports/#analyst

in part

Atomic Resources Limited (ASX:ATQ,ATQO) Speculative Buy
Coal to Power in Tanzania
Initial JORC coal resource of 179 million tonnes $0.10
[email protected]
+612 9232 1688
Capital Summary
Issued Capital
57.8M ords
28.90m opts*
10.00m opts
Market Capitalisation (diluted) $5.8**
Share Price (11 March 2009) $0.10
Cash (m) A$2.8m
52 week low $0.07
52 week high $0.31
* tradeable, ** excludes out of money options
Directors
Clive Hartz
Chairman
CEO private investment group in
property, mining, construction,
chairman IGC Resources,
David Holden
Managing Director
Geologist, 20 years exp. coal
and gold, CEO of IGC
Resources
Alistair Walker
Non-Executive
Accountant, finance, mining and
property sectors

Major Shareholders
IGC Resources Inc 16.000,000 27.68%
Mr David Donald Boyer 4,800,000 8.30%
ANZ Nominees 2,201,950 3.81%
Ouro Pty Ltd 2,100,000 3.63%
Summary
Atomic is an energy focused (coal, uranium) exploration
company that listed on the ASX in July 2007. Through a
strategic partner, Atomic has been able to secure
thermal coal projects in south western Tanzania. Atomic
has done well to announce a maiden JORC coal
resource of 179 million tonnes at its flagship Ngaka
Project within 10 months of acquisition at an estimated
cost of just US$1.6 million.
The current projects have the potential to contain in
excess of 300 million tonnes of thermal coal and it is the
company’s objective to convert the as yet untapped coal
resources to power and supply this both domestically
and to neighbouring African nations.
Key Points
􀁸 Signed a formal Joint Venture Agreement (7/4/08) with
the National Development Corporation (NDC) of
Tanzania to explore and develop the Mhukuru and
South Ngaka coal fields in southern Tanzania.
􀁸 The significant amount of exploration work conducted
between 1947 and 1957 by both the Tanganyika
Geological Survey (TGS) and the Colonial Development
Corporation (CDC) including significant drilling has
enabled Atomic to quickly advance the projects through
minimal expenditure.
􀁸 On the 10th February 2009 Atomic announced an initial
combined JORC resource of 179 million tonnes of
coal from part of the Ngaka coalfield. Significantly 66%
of the resource is in the measured category.
􀁸 Atomic’s thermal coal fields in western Tanzania are
ideally located to provide feed stock for coal-fired power
stations being planned for the country.
􀁸 Internal scoping study has been completed and final
review by the Tanzanian Government is underway.
􀁸 Atomic aims to proceed to a Bankable Feasibility
Study on the coal mining project in conjunction with
investigating the viability of power generation through
the process of above ground coal gasification.
􀁸 We are encouraged with the announcement by RIO
Tinto to explore for coal in southern Tanzania in
close proximity to Atomic through a US$7 million
farm in agreement with Uranium Resources Plc.
􀁸 Based on its low market capitalisation and its ability to
leverage value from its coal assets we rate Atomic as a

Recommendation
Atomic have done well in securing a strategic local partner and being an early mover on taking a significant
position on known stranded coal projects that required a limited amount of expenditure and drilling to
calculate a maiden JORC resource. With a market capitalistion equivalent to 6 cents per tonne of coal
compared to its peers, Atomic represents a low entry cost for exposure to coal.
In the shorter term we see the coal assets as having significant option value for Atomic to realise value
through the establishment of an additional power supply within Tanzania and to neighbouring African nations.
We see further option value in the longer term with the development of the Mtwara Development corridor to
provide seaborne export coal to world markets.
Atomic has positioned itself well and must now work closely with the right consultants, appoint significant
management and work closely with relevant Tanzanian government departments.
Based on its low market capitalisation and its ability to leverage value from its coal assets we rate
Atomic as a speculative buy.


http://www.tancoalenergy.com/