why moz 4 a punt

Stock 3: MOZAMBI COAL LIMITED

ASX Code: MOZ

Market Cap: $2 Million

What I like: I like a lot about this stock. First is that it has some coal tenements in a Queensland coal hot spot called the Bowen Basin. It picked up this land from Rio Tinto recently when they divested of non core assets (they are primarily a iron ore, copper and gold company) for just $375,000.

The land has been drilled by Rio and they found coal multiple times over, so we know there is something on the land. Plus this land is surrounded by plenty of other big players, rail and power.

Coal is out of favour at the moment, but it won’t be forever. Considering the fact that there is coal in the ground, they are in the middle of the big boys and they 100% definitely have coal – this is a no brainer.

My Concerns:

They don’t have much cash in the bank, but I suspect they will easily get funding for such a prospective piece of land.

My Expectations:

MOZ is undertaking drilling towards the middle of this year and so I expect they will be targeting areas with a good chance of success to help raise the share price. If they find enough coal they will do a resource estimate and I suspect one of the bigger companies in the area will make a takeover bid for MOZ. At the very least I expect this company to move towards a market cap of 40 million if they find more coal, and even 10-20 million leading up to the drilling.

BTW the above analysis is not by me but rather why I have dipped my toe in....GLTAH