STTCOMP SWJ, FA Long Gold in South Africa. Stonewall Resources....

STTCOMP SWJ, FA Long
Gold in South Africa.

Stonewall Resources.
Shares ~ 1.875b
MCap ~ $24.4m at 0.013/share
Cash ~ $1m (raised 18th August at 0.015)
Debt ~ $6.5m

Stonewall is currently in trading halt. It should come out of TH on Monday to announce the result of its arbitration claim.

The claim made by Stonewall is to be determined in accordance with Australian law and resolved by arbitration, in English, under the Hong Kong International Arbitration Centre rules. An award in favour of Stonewall will therefore be enforceable against Shandong in China by Chinese courts. This arbitration is to determine Stonewall’s claim for damages against Shandong (深圳：002359) arising from the termination of the Share Sale Agreement (SSA), which Stonewall announced on 21 November 2014. The claim is for USD$118,500,000 plus interest and costs. The Company entered into a funding agreement with a consortium of funders who are entitled to 45 percent of a successful claim. Final submissions were submitted in June 2016 with the Tribunal indicating that it is likely to deliver a decision by no later than 1 September 2016.

On 27 February 2016, Shandong issued a response to an enquiry by the ShenZhen Stock Exchange regarding the absence in its 2015 annual report of disclosure of a contingent liability for Stonewall’s claim. In its response, Shandong said that in order to protect its shareholders, the controlling shareholder, Jingzhong, issued a letter of undertaking that, should the tribunal order Shandong to pay damages to Stonewall, Jingzhong will provide financial support and will pay the damages within 15 days of the arbitral award.

SWJ stands to receive anything from nothing through to about US$70m. Anything above US$15m will allow to SWJ to begin immediately on its planned production schedule on its South African gold projects. It would also prevent any further dilution of shareholders which is definitely a plus for a company with already ~ 1.8billion shares on issue.
I’m tipping based on the award catalyst but underlying the company is some impressive gold figures.

• 0.7Moz to 2.4Moz (PMR). Initial capital would be used to convert the pre mined residue into a JORC resource.
• JORC compliant Mineral Resource of 2.99Moz
• Targeting exploration ounces of 0.34 to 3.07 Moz plus

Conceptual PMR Target
• Although not yet included in the Company’s resource statement, significant sampling, mapping and accesses to multiple mines (more than 1,500 samples) and testing for both grade and fractional analysis has shown the prevalence of the material across the mines
• The estimation of the conceptual exploration target is based on an in situ grade range of between 1.28 g/t and 2.13 g/t albeit that this may vary from one area to the next.

The PMR Project plan includes;
• Commencing 2016.
• 25,000 0z pa^ by end 2017.
• Existing Plant and infrastructure (requires capital to upgrade).
• Pre-explored, pre-developed, pre-drilled, pre- blasted material.

PMR Production Data - CapEx
• Initial Capital (2016/2017) US$ 15.1m
• Sustaining Capex (2018 – 2026) US$ 6.1m
• Total LOM (10 years.)Project Capital Requirement US$ 21.2m

Proposed Budget for Q3/Q4 2016 - Value
PMR Resource Delineation/Testworks - $1,000,000
PMR Project Development - $750,000
SWJ Debt Repayments - $500,000
Working Capital - $750,000
Total - $3,000,000
The company has been in talks to organise funding should the arbitration fail to be awarded. From their June quarterly;
“The Company continues to engage in discussions with potential financiers to secure funding for the proposed Pre-Mined Residue (PMR) Project. The Company will disclose these on conclusion of the various initiatives as and when required.”

MAJOR SHAREHOLDERS
Tasman Funds Management Pty Ltd. 18.56%
High Gift Investments Ltd
Smart Vision Investment Group Ltd
Khan International Limited
Best Wealth Winner Ltd
Buttonwood Nominees Pty Ltd

LONG TERM DEBTS
Short-term Loans A$500k 8,9/16’.
Tasman Convertible (fixed $0.009) A$1.65m 6/17’.
APCIG A$4.75m 10/16’.