Share price:20c
Issues capital:266 mill
Mkt cap: approx 49 mill
Top 20 own 66% largest holder owns 40%
Business: UCG, under ground coal gasification converting Alintas old low grade coal mine into gas and methane. Catalyst: South Australian governments commitment to build a new gas fired power station in the middle of a gas shortage.
Leigh creek are well positioned to rally of today's government announcement, they have recently completed a positive scoping study on their Project. They currently have a Jorc of 377 million tonnes of coal that converts to a gas resource of 2964 PJ.
LCK are trading at around 0.02 a GJ with an average market valuation of 52 a GJ, given the governments reaction to the gas shortage I think LCK are seriously under valued, they are a 125 km from existing major pipelines and have infrastructure in place from the old coal mine.
Conversation around political risk associated with UCG/CSG has been squashed with the government announcing it would offer land holders royalties should they let gas drillers onto there property in South Australia, if this is now the case I cannot imagine they would have any issues with UCG occurring on an abandoned coal mine with an independent bore water supply. The company is aiming to gas flare a pilot plant by mid this year, should they be successful then in my opinion the project is completely derisked and the share price would be several dollars.
Shanghaied Electric (China's biggest utility company) have been heavily involved and have signed a HOA in regards to assisting LCK through development.
I personally wouldn't be at all surprised to see an end user like BHP fund LCK through an off take agreement due to the current gas and electricity crisis.
All my opinion and the information is from recent announcements, press releases and the investor presentation released last year. Do your own research and speak to a professional ect ect..
I own both stock and options.
