mantle right in the thick of it!

Why does it seem that all expenditure with regards to Mantle's projects and the projected spends have come to a halt?

Mantle have mentioned in past announcements that they intend to participate in any S7 tender.

According to media and the greens, that tender process is underway and a result could be known this year.

And the greens not only believe that Mantle are an S7 wannabe, they also(rightly) believe that Mantle stand to benefit indirectly through Exergen's inevitable(IMO) ALDP grant.


Combine that with the GHD/Mantle export predictions, Mantle's BCIA memebership and Mantle's back ended "clean coal sold" tenement deal and even an utter dunce could see that Mantle are right in the thick of the very bullish looking LV brown coal/Vic Pilbara segment.



Very, very interesting times ahead!!!!!!!!!!



Victorian coal wannabes: A profile of the companies seeking government grants and coal resources for Victorian brown coal projects


Introduction


Past and current Victorian governments have harboured dreams of developing Victoria’s massive brown coal reserves and exporting Victorian coal to the world. These dreams have centred on the Latrobe Valley. Since the 1970’s governments have repeatedly made cash grants and coal allocations to companies promising new coal technologies and projects, only for those promises never to materialise.

In 2013 the Napthine Government seems set to repeat past mistakes. The Victorian and federal governments are currently contemplating allocating up to $90 million in funds from the jointly funded Advanced Lignite Demonstration Program (ALDP) for a range of new brown coal projects. When the brown coal grants program was unveiled in August 2012, the then Victorian Minister for Energy and Resources, Michael O'Brien, stated that it was a “part of a drive to find new ways of developing Victoria’s massive brown coal resource."

1. It has been reported that earlier this year 21 companies applied for grants under the program with the list more recently whittled down to seven contenders. Some of the applicants are known but many are not.

2. With tens of millions of public funds at stake and/or billions of tonnes of coal, taxpayers are entitled to ask questions about the small coal companies lining up for handouts. Who is behind the companies seeking funding? Do they have any track record in developing major projects, let alone brown coal projects? Who are their major backers? Are the companies financially viable? Or are they bit part players hunting for a handout to keep their struggling companies afloat?


This report aims to shed some light on the track record of the companies seeking millions of dollars of public funds or coal allocations to support their brown coal plans. It includes detailed profiles of each of the companies known to be seeking taxpayer grants for their projects or coal allocations.


The ALDP grants are only the first part of the Napthine Government’s hopes to establish an export coal industry. Since its election in 2010 the Coalition has been investigating the feasibility of undertaking a coal allocation- a fast-track process by which companies are granted exploration or mining licences with rights to billions of tonnes of Latrobe Valley coal.3 It is likely that the companies profiled in this report who are seeking government grants are also seeking a coal allocation.


The last coal allocation in Victoria occurred in 2002 when the Victorian Labor government allocated billions of tonnes of coal resources for a handful of new coal projects. Hope of jobs and investment in the Latrobe Valley were raised and dashed. Ultimately no new projects were built and public funds were wasted chasing a fading brown coal dream. While most companies lost money, some made millions by on-selling speculative projects. The 2002 coal allocation has since been described by Treasurer Michael O’Brien as “a bit of a dud”.

Since then the Australian electricity landscape has changed profoundly. Increased energy efficiency and the rise of solar have contributed to falling demand. Increased wind power has reduced wholesale electricity prices. In response, east coast black coal plants such as Munmorah in NSW and Swanbank B in Queensland have been mothballed.

Internationally, coal boosters have largely pinned their hopes on historical rates of growth in China and India continuing but substantial uncertainty overhangs both.

Widespread domestic disgust at the ever-escalating air pollution in China –largely from coal power plants and industrial burning – has prompted the Chinese government to begin a retreat from coal. Amongst the investment analysts specialising in coal, the debate is about not if, but how soon Chinese consumption starts to decline. With major oversupply and falling global prices, new coal , projects will struggle to find investors and be shunned by risk-averse bankers.

In India, economic growth is slowing while new private power stations based on imported coal are struggling financially. The recent devaluation of the Indian rupee has pushed the costs of imported coal up and increased the finance costs on overseas loans denominated in US dollars. As a result, a number of private power companies are falling out of favour with investors and financiers. State utilities – long used to the supply of very cheap domestic coal – are resisting signing up for new much more expensive power purchase agreements.

These economic headwinds at play internationally mean that if it was up to financial markets, Victoria's brown coal would stay in the ground. However the provision of taxpayer-funded grants and allocations of billions of tonnes of coal provide the companies pursuing brown coal projects a lifeline, both for their project aspirations and their company balance sheets.

As the profiles of the coal companies show, nearly all of the companies lining up for handouts of public money and coal resources are fledgling, speculative ventures with little track record of delivering projects or investment. Given this, government handouts or new coal allocations to start-up coal companies are likely to enrich a few dozen speculative investors and executives but there is every prospect that the public policy mistakes of the 2002 coal allocation are set to be repeated. It is time for the Victorian government to give up on its outdated brown coal export dreams and pursue clean, sustainable industries in the Latrobe Valley and beyond.

Coal wannabe #3: Mantle Mining

Company background: Mantle Mining is a small Melbourne based mining exploration company with interests in two coal exploration projects in Queensland and Victoria and two gold exploration projects in Queensland. The company has no operating mines.

Current coal operations: None.

Proposed new coal projects: Mantle has the exploration title for the Bacchus Marsh Brown Coal Project, which it states could be a 20 million tonne per year project which would cost $2 billion to build.

The company has stated that it aims to export the processed coal to India commencing, at the earliest, in 2018.

In July 2012 Mantle Mining entered into a 50:50 joint venture and Technology Licence Deed with Exergen for the proposed project.

Exergen undertook that by July 2014 it would commence the construction of a 50 tonnes per hour commercial pre-demonstration plant at a location to be determined by Exergen.

If Exergen fails to meet the agreed timetable to have the plant operational by July 2016, Mantle has the option of buying out Exergen’s share of the joint venture or selling it to another party.

However, if the joint venture with Exergen is terminated, Mantle retains the right to use Exergen’s coal processing technology.

In an independent report on the proposed Exergen-Cape Range merger, it was noted that there was “no certainty that Exergen will meet the commercial milestones” and retain ownership beyond July 2016.

Cape Range noted of the proposed Bacchus Marsh project that “Exergen will use a rational approach with respect to determining where and when it will focus its application of the CTHD technology in accordance with good business practices taking into consideration the funds and other opportunities available.”

For its part Mantle has acknowledged that there “would be a material adverse impact” on the development of the project if Exergen did not meet its commitments.

Mantle also has four coal exploration licences in the Latrobe Valley -

EL5210, EL5336, EL5337 and EL5338.

Company finances: Mantle faces significant financial challenges as it has no profitable projects to cross-subsidise its exploration program. By at end of the 2012/13 financial year Mantle recorded a loss of $5.9 million and had only $1.8 million, mostly cash, on hand.

While Mantle has an agreement to sell up to a little over a further $9 million of discounted shares over three years to Fortrend Securities, this is a short term fix at best. For example, Mantle forecast expenditure of $625,000 in the first quarter of 2013/2014,33 suggesting an annual cash burn rate of approximately $2.5 million. The company’s share price is trading near the bottom of its range over the last year and the company – and particularly its coal projects – face an uncertain future.

Role with Advanced Lignite Demonstration Program (ALDP):

Mantle stands to be an indirect beneficiary of the ADLP program if Exergen lands a grant. If Exergen gets a grant and proceeds with a project at Bacchus Marsh, Mantle stands to reap part of the benefits. If Exergen fails to get an ADLP grant or attract other funding for a demonstration project, Mantle’s title to the Bacchus Marsh coal project will be of limited value. The company’s exploration titles in the Latrobe Valley could also be of more value if there is renewed interest in coal projects.

Largest shareholders: The largest shareholder in Mantle Mining is Tonka Trading (10.97%), a company associated with Mantle Chairman Martin Blakeman. At the ASX traded price of $0.034 cents, Blakeman’s 26,584,920 shares are worth approximately $904,000.

Lobbyists/membership of industry lobby groups: Mantle Mining does not have a registered Victorian or federal lobbyist. However, the company is listed as a member of the Minerals Council of Australia, the peak lobby group for the mining industry.

ends.....

Mantle are the real movers and shakers of the Vic BC scene!!!!!!!!!!

All IMO so DYOR

B Rubes