Morien Resources (TSXV: MOX) will likely see new record highs of above $0.77 per share in the days ahead. MOX must rise to its all-time high of $0.77 per share for it to catch up to the 2021 year-to-date gains of Ramaco Resources (METC).
METC is a very similar company to Kameron Coal the owner of the Donkin Coking Coal Mine. METC is currently producing coking coal at an annualized rate of 2.2 million tonnes. Kameron will likely produce somewhere between 1-2 million tonnes at Donkin in 2022 before reaching full production capacity of 3 million tonnes in 2023.
METC's current market cap is US$540 million (CAD$685.8 million), which is approximately equal to what Kameron Coal would be worth today if it was a publicly traded company. Owning a gross production royalty in a mine is always 5-10X more valuable than owning an equal amount of equity in that same mine. MOX's 2%-4% gross production royalty in the Donkin Coking Coal Mine is likely equal in value to owning a 20% equity stake in Kameron Coal.
With Kameron Coal deserving of a valuation equal to METC and MOX's 2%-4% gross production royalty in the Donkin Coking Coal Mine equal in value to owning 20% equity in Kameron Coal...
We estimate that MOX's 2%-4% gross production royalty is worth the equivalent of 20% of METC's market cap.
Based on METC's market cap of CAD$685.8 million, MOX deserves to be worth CAD$137.16 million, which would value MOX at $2.69 per share!
Prior to Kameron Coal placing Donkin on care and maintenance in March 2020 due to Canada closing its border over COVID-19 concerns, which prevented the U.S. MSHA consultants from visiting Donkin to make safety recommendations to the NS LAE regarding material that fell from the ceiling of Donkin in February 2020, MOX was trading for 0.2075X METC's share price. After we get public confirmation that the Donkin Coking Coal Mine is reopening, MOX is likely to rapidly return to a share price of 0.2075X METC. With METC closing yesterday at $12.24 per share a MOX share price of 0.2075X METC would currently value MOX at $2.54 per share!
It typically takes the U.S. MSHA consultants two months to travel to Nova Scotia to visit Donkin and with Canada reopening its border on August 9th we expect the U.S. MSHA consultants to visit Donkin within the next week or two. The Nova Scotia media will definitely be informed by local officials when this event takes place and we expect the media to report on this event as being confirmation that a reopening of Donkin is imminent. We believe Kameron has already made their own internal decision to reopen as soon as possible and the only thing preventing an immediate restart is the U.S. MSHA consultants visiting the mine. Kameron already raised plenty of capital to fund the restart of underground mining operations when it sold a small portion of Donkin's coking coal stockpile a few months ago, which resulted in MOX receiving $104,000 in royalties even with the mine still on care and maintenance.
Billionaire Chris Cline who developed Donkin and whose family owns 100% of Kameron along with being 100% owner of MOX's largest shareholder Atlantic Royalty, LLC, had the #1 best safety track record in U.S. coal mining history with only four fatalities at Chris Cline owned mines over a period of many decades owning/operating U.S. coal mines that employed tens of thousands of coal miners! To put this into perspective, NIA's #1 overall stock suggestion for 2016 a silver miner that gained by 542.86% within months of NIA's announcement, unfortunately experienced three fatalities in 2016 alone in three separate incidents and silver mining is safer than coal mining!
Chris Cline and the Cline family have stood above all other coal mining companies at treating their employees the best and keeping their workers safe! Kameron has been continuing Chris Cline's legacy of safety/success at Donkin with zero fatalities since Donkin first launched mining operations in 2017 along with zero injuries from ceiling material falls. Although Chris Cline would have never personally said this, when NIA recently spoke to Donkin's former supervisor of mining operations he explained to us that coal miners don't like to always wear the safety equipment provided to them. Every injury that has ever occurred at Donkin has been due to Kameron's employees not wearing their safety equipment and/or temporarily becoming too complacent while working with the haulage equipment. After Kameron first acquired Donkin the very first thing Chris Cline did his first day at the site was add a sign to Donkin's entrance reading "complacency kills". After U.S. MSHA officials last visited Donkin they said that Donkin "exceeded industry best practices for safety."
MOX's largest upward move in history is imminent!
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