wcp post on my blog

I've posted the following WCP info on my jnr mining blog at:

asxjuniorminers.blogspot.com

WCP Resources appears to offer good value


WCP Resources appears to be potentially good value in my view at the moment given that it has streamlined its operations (divestment of various projects) and has the cash to take advantage of distressed project opportunities (and there are plenty out there at the moment as you know).

And with Levi Mochkin on the board, they have the networking potential to find some great opportunities, and Levi would be highly motivated to do so given that his company (Nasdaq Securities) is both a substantial shareholder (12.5 million shares) and optionholder (58.5 million options - listed) in the company.

Currently, WCPs non-project assets are:

$6.99m cash as at 31 December 2008
30 million shares in Panax (Current value at 10c PAX SP of $3 million)
So total assets of approx $10M

Looking at its capital structure, WCP has:

232.1 million listed shares (WCP)
112.2 million listed options (WCPO) with an exercise price of 4c and expiring June 2010
approx 13.5 million unquoted options which are WELL out of the money
Given the SP is currently 3c, therefore under option exercise price, the undiluted market cap is most important and based on shares is approx $6.95 million which is well under their asset value of $10 million.

Though the cash is great to have (ensures survival in current market and ability to acquire projects at distressed prices), the most important asset in my view is their Panax holding, a geothermal company that is kicking significant goals both in Australia and overseas, and is run by probably the best possible director (For geothermal) going around, Bertus De Graaf, the founder of Geodynamics).

I believe that there is significant upside in PAX shares and given WCP's holding, their SP has significant leverage to PAX. However more interest in geothermal sector needs to happen before PAX starts to realise its potential...though if PAX is successful in their government grant application, this should push PAX shares nicely as well.

Current issue for WCP: WCP is currently in dispute with Tasman Resources (TAS) over the 65% interest WCP was earning in the South Australian Lake Torrens project, the dispute surrounding the 'curtual heritage' restrictions which is stopping WCP from working on the project and where the deadline from expenditure required to earn their interest has passed.

Whilst I cannot comment on the legal merits of the dispute, I can comment that TAS are pretty stupid to actually even dispute with WCP rather than giving them an extension. TAS has its own problems, and the likelihood of it exploring Lake Torrens on its own is ZIP. WCP on the other hand, given their cash, easily has the funds to continue to explore the project once cultural heritage restrictions are resolved, and there is nothing better to get TAS out of the deep (and hot) water it's in than WCP actually coming out with some great results at the project.


Cdchi1