india resources a stock to watch

Independent research highlights India Resources as a stock to watch
Below are extracts from the research report, ?A Highly Attractive Passage To India?, produced by Gavin Wendt, a Financial Services Representative with Summit Equities Ltd , and a consultant with Mine Life, published with permission.



A Major Corporate Transformation is Underway.

The appointment of Arvind Misra as managing Director of the company several years ago represented a pivotal moment in the company?s fortunes. Being highly experienced in the mining business, his operating and financial experience has led to a complete rejuvenation of IRL, albeit with a lot of sleepless nights.

One of the biggest achievements so far has been the reorganization of the company?s debt position, which has been cut from $3.0m previously to just $1.0m, whilst at the same time the company?s outstanding convertible notes have been cleared, eliminating the substantial overhang that previously dogged IRL?s stock and share price.

The company now has a solid financial footing, with around $0.75m cash on hand, which increased to around $1.5m during October.

In terms of upside, we will await further news with respect to the company?s two advanced coal ventures in India, where the potential work is worth around $800m to IRL.



Company Overview.

IRL chose India as an investment opportunity on the basis of its favourable geology and culture, its strong growth prospects and the relaxation of foreign

investment rules with respect to mining.

The country has an emerging mining and exploration industry; however its endeavours have been plagued by the lack of technology and investment in this sector.

The company saw the opportunity to combine Australian mining and exploration skills with the vast potential of India?s minerals industry.



Major Projects.

Surda Operation:

The impact of mining in higher-grade areas, along with ongoing production efficiency improvements, should lead to annual production levels of more than 4,000

tonnes of copper-in-concentrate. IRL is currently budgeting for strong positive cash flow of $0.4 million to $0.5 million per month, or ~$20m cumulative over the next four years.



Exploration Activities ? Base Metals.

Aravalli Project:

The application process for the Mining Lease, applied for over the lead-zinc mineralisation defined at Sindesar Khurd-Rajpura Dariba, is complete. Intense lobbying of both State and Federal Governments is furthering the company?s application. Crown Mining Pvt. Ltd., a wholly owned subsidiary of IRL, has the preferential right to be granted the ML.

The ore body is of a SEDEX style similar to Mt Isa.

We anticipate that the resource estimate will be upgraded substantially in terms of both tonnage and grade by further drilling, whilst higher-grade zones will follow.



Hindoli Project:

The Hindoli Reconnaissance Permit (RP) application has now been granted to Crown Mining and Crown is in the process of formally accepting the application, which covers some 3,754 sq km in the Bhilwara, Tonk and Bundi Districts of Rajasthan, located between large Anglo American, HZL and ACC Rio Tinto RP?s, to the east of Bhilwara.

The Hindoli RP structural geological map contains intense folding and shearing providing an ideal structural setting for copper mineralisation. There are numerous recorded instances of surface mineralisation, primarily copper, subordinate lead and zinc and silver, and one of gold.



Askot Project:

India Resources holds a strategic 10% shareholding in Pebble Creek Mining Limited (TSX-V: PEB), which owns 100% of the Askot project through a subsidiary Adi Gold Mining Pvt Ltd.

The project is a polymetallic volcanogenic massive sulphide deposit containing five metals of economic significance: gold, silver, copper, lead and zinc. The full extent of the mineralised system has not been defined and there is large anomalism.


Bonai project:

India Resources has maintained its portfolio of 15 applications in the states of Orissa and Jharkhand. These applications are being supported by Geomin Consultants of Orissa India who has a proven track record of success with the granting of mineral licenses.