Just reposting a comment made on STT thread yesterday by kevinbarry. Worth a reminder why we are here.
STTCOMP AUQ FA Long
Post #:
33451966
Alara Resources – Copper and Gold in Oman (and maybe KSA).
Market cap = $19m, Cash around $1.8 million-ish.
629m shares on issue.
There was a placement of 15,750,000 shares to their joint venture partner in December last year which were issued at 3c - which is the current share price.
Well, I first posted this as a STT in December 2016 on the basis that Alara had a mining licence imminent for their copper gold project in Oman. Well imminent in fact meant last week. In any event, Alara now have a mining licence for their Al Hadeetha Copper-Gold project in Oman and are getting set to go with finalising contracts and finance. They are also in the process of choosing a preferred lender and finalising financing terms.
Alara have a 70% interest in the Al Hadeetha Copper-Gold Project in Oman. $12m has been spent on the project in Oman, which is considered a stable and mining friendly jurisdiction that are really starting to encourage mining.
The resource is JORC indicated 12.39MT @ .89% CU & .22g/t Au. The grades are modest but the mining plan indicates fairly economical and profitable mining via pit. They will be constructing a 1 Mtpa processing plant which could also be used for processing at their other projects in due course.
Significantly, Alara has an off take agreement for the annual copper concentrate production of 35,000 WMT with Statdrome PTE Ltd. The agreement provides for the prepayment of US$6 million to help fund construction.
There has not been much of a spike yet from the granting of the mining licence, most likely because it has been such a long time, and has seemed frutratingly inevitable for a long period of time!
The depth is gradually moving and there is some trading indicating some taking of positions.
The register is fairly tightly held with the managing director being the third largest holder with around 30 million shares.
A few other things of note are that they have entered a joint venture with South West Pinnacle Exploration, an Indian listed mining services company with a similar market cap to Alara, for the provision of mining services in the region. They are seeking new exploration licences for copper and other battery minerals. Alara have been involved in meetings and symposiums in respect to mining in Oman and seem to be a bit of a flag bearer in this regard. They are in the process of revising their financial modelling (presumably upwards!) to reflect the significant increases in copper prices from when financial modelling was done in 2016. It is worth noting that the project was profitable on those old copper prices.
One final thing is that Alara also have a second JORC compliant resource: Khnaiguiyah in Saudi Arabia with 50% ownership of the zinc / copper prospect. There is unresolved litigation with a falling out with joint venture partner Manajem. Alara have a JV with Bayan Mining LLC to take up the mining lease on the Saudi project when the Court proceedings have been finalized. Manajem's claim does seem spurious, but does need to play out. Significantly, the Saudi's seem to be aiming to be a mite more transparent and efficient in their judicial system to give comfort to foreign investors. Hopefully this is so. Alara have sunk a lot of money into that project so hopefully there might be some outcome eventually.
In my view there is a lot on offer here for a modest market cap and a not too outrageous number of shares on issue considering they are going into production phase now. The company is doing good work and appear to be accepted and trusted within Oman. The managing director seems to have done a great job - the company presents professionally and though there have been delays out of the company's control, things really seem to have been moving in the background. I would think that things will progress at some pace from here. Worth a look through their announcements over the last 12-24 months - there is actually a lot going on.
A good buy in my view ST with also good prospects into the MT and Longer term.
Have a good weekend all.
