Today (Monday) Red Hill announced 43-101 compliant coal resource of 140 million tonnes at Chandgana Tal. (http://biz.yahoo.com/ccn/070910/200709100412044001.html?.v=1)
Together with Ulaan Ovoo’s 200 million tonnes, Red Hill now has amassed over 340 million tonnes of coal. At $60 a tonne, in situ value of the deposits now stand at over $20 billion. Coal is a easy commodity to understand, there is little processing required after digging it out of the ground. The issue is with quality and transportation. Thermal coal quality from Ulaan and Chandgana are considered very good and the company is exploration transportation options. Red Hill also announced additional staking of extension of Chandgana Tal claims which could potentially increase the coal resource at Chandgana substantially.
Mongolia caused a stir last month with letters issued to revoke exploration license of Khan and Western Propsector. Khan just announced that their license is under review and has not been revoked. So far there has not been revoke of mining license, which is what Red Hill has for Ulaan Ovoo and Chandgana.
Technically the stock retested the strong support level of 55 cents and is now consolidating. Considering the humongous assets of Red Hill and it’s relatively small market cap, we believe it’s a bet well worth making.
For more info, please visit www.goldmau.com/rh.php
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