If you like nickel and particularly JBM and MCR, read read the...

If you like nickel and particularly JBM and MCR, read read the following for an outstanding opportunity.

Image Resource (IMA) is in a JV with Jubilee (currently under t/o by Xstrata). IMA will be spinning out its nickel assets whcih include the Emu Lake Project (JV with JBM) in an upcoming IPO.

I have spent considerable time researching IMA and specifically the upcoming nickel IPO which I find has strong value in itself to shareholders. Per boardroom radio today, an ex date will be announced next week potentially with shareholders holding at that date receiving a 1 for 2 in specie distribution. As approved at the meeting in October, a further 40 million shares will be offered to the public and current shareholders at a price of 50 cents. From listening to the latest Boardroom radio post a month or so ago on the IPO I have worked out that the entitlements to shareholders (on top of the in specie distribution) to gain a further shareholding in Emu Lake Nickel IPO will be around 1:8. George (MD) stated on Boardroom radio that IMA holders would be entitled to around $5 million and if you do the calculations that equates to 10 million shares. IMA currently has about 80 million shares on issue hence 1:8 appears likely. Management has had a successful history of IPOs with their latest (Magnetic Resources) listing at around 60% premium on day 1. Over the last couple of months there has been significant institutional and private investor support and yesterday there was an announcement of further support.

Emu Lake is only one of the Nickel projects covering 54 sq km and contains approximately a 10 km strike length of ultramafics known to be prospective for nickel sulphide mineralisation. Previous exploration returned high-grade nickel sulphide intercepts from RC and diamond core drilling with grades including 7.55% at 0.3m, 7.08% at 0.17m and 2.28% at 1m. Subsequent drilling by Jubilee intersected further high-grade sulphides including 10.9% at 0.10m, 6.66% at 0.28m and 6.20% at 2m. These are outstanding grades in my opinion and there are indications that the high-tenor nickel sulphides on the main ultramafic contact extend for about 300m along strike and provide an attractive target for further drilling. The nickel projects appear to be of high grade and consistent with Jubilee’s strategy of being involved with high grade nickel projects.

Mincor is also in another JV with IMA (Kambalda West JV) which will also be included as part of the spin out. Other nickel projects include Lookout Well, Woongarring, Ward Springs, Koolyanobbing, Moorine Rocks, Boodarding, Gnamma Hole, Bronzite, Beetle Lake and Dingo Dam.

I see significant short term value in IMA leading up to ex date and depending on other announcements this could hit its valuations put out by Fat Prophets and RM Research a few months ago of $3.

As always, please conduct your own research and my postings do not mean that the share price will go up so you should not buy solely on this information alone.