broker write-up on unv

One of London's top AIM brokers have released a very positive note on UNV.

I really like the references to further new projects....

This stock is looking very good and management look well connected in SA to getting access to these projects.

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Friday, January 14, 2011 by Jamie Ashcroft


Universal Coal (ASX:UNV) is a stock investors should put on their watch list, according to Peter Davey, metals and mining analyst at Ambrian Capital.

Overnight the group announced a 19.1 million tonne resource upgrade for its main project, Kangala, which now has a 124 million tonne JORC coal resource - 44.7 million tonnes measure, 4.4 million tonnes indicated and 74.9 million tonnes inferred.

The South African focused coal junior may already be on investors' radar, as it has been courting investors in the City recently - chairman Tony Harwood presented to a packed room at Proactive Investors One-2-One event in Mayfair just last night - and this morning City broker Ambrian gave it a glowing write-up.

In addition to Kangala the analyst reckons that Universal could also benefit from new opportunities.

This is an interesting South African thermal coal, near-term production play, with some hard coking coal blue sky (Berenice Project HCC) next door to CoALs Vele and Rio Tintos ground, Davey said.

This will be a company to put on the watch list as the South African coal business is quite likely to throw up some interesting opportunities in the short to medium-term.

The analyst adds: Many of the larger players' Eskom linked mines are coming towards the end of their lives and their operating pits are likely to shrink to a size that no longer makes any sense being operated under a high overhead.

South African coal mining lease areas of these older mines and areas will be left with orphaned coal resources that again will be more appropriately mined by a smaller operator.

Davey emphasised his bullish view on the coal market. He stressed: We like the long term fundamentals for both coking and thermal coals.

Universal Coal appears to have collected together an experienced South African coal team that might be well placed to pick up one or more South African thermal coal opportunities that will be company transforming deals.