Adavale Resources Limited ("ADD") - Cheap Coal??

[steve fleming]

This is an interesting one (to me at least!) that I have been keeping my eye on recently and that had a big increase in the sp today (35%).

However even after a 35% increase today, ADD has a Market cap of only about $5 mil (183m shares @ 2.7c)

Cash at 30 June 2010 was $2.5m

So EV = $2.5m

The thing is, coal mining is planned to commence on their 9Mt JORC thermal coal resource located in Sumatra, Indonesia, later this year.
Draft mine plan and financial model have been completed (but no details released to ASX).

ADD states that it “intends to establish itself as a reliable and dependable Indonesian coal producer, leveraging its Australian mining expertise and best practices against the low operating costs of coal mining in Indonesia”.

ADD believe “that Indonesia’s new mining act has flagged an opportunity for explorers to get involved in what is a strategically located country with significant opportunities to meet world and particularly Asian demand for minerals and energy.”

However, the fact that they are planning to be mining without any ASX disclosure of a mining license, a BFS or a mining contractor does perhaps ring some alarm bells.

But even allowing for a couple of directors who are on the little less than reputable side IMO (Roger Steinpreis and Richard Poole), an EV of just $2.5m for a company that has advised the market on a number of times that they will be producing medium to high grade thermal coal by the end of the year, seems a little peculiar.

The chat on h/c is that the sp is being held down for a capital raising, which does have some merit, presumably a rights issue to enable the major holders (which include IB Daiwa) to average down their holdings. Which would suggest that post capital raising, once all the cheap shares are issued, the sp will re-rate....Does sound as though there are a bunch of unhappy punters on h/c who have ridden ADD a long way down.

Don’t know if there is more to the story, but it does look like an interesting micro-cap to follow...

[STRAT]

Hi Steve. Is Roger Steinpreis the fella with a history of backing companys into shells? In any case you have my attention. Will have a look. Thanks for the heads up.

[trackers]

Bah Indonesia /frown.. I'll go back to looking at SMD and rubbing my hands in glee at my recent EKMO buyin at 5.6c

[steve fleming]

The chat on h/c is that the sp is being held down for a capital raising, which does have some merit, presumably a rights issue to enable the major holders (which include IB Daiwa) to average down their holdings. Which would suggest that post capital raising, once all the cheap shares are issued, the sp will re-rate....

The inevitable cap-raise / rights issue was announced today, (not surprisingly) underwritten by related party Arthur Phillip (associated with Directors Poole and Suriano) at 2c plus free options.

So predictable.

Just have to wait for the insiders to pick up their cheap shares then wait for the inevitable re-rate.


And yes Strat, Roger that.

[trackers]

Anyone know what they mean by "However, given the acquisition of the Tapan project has not yet completed" in the latest announcement?

[steve fleming]

Anyone know what they mean by "However, given the acquisition of the Tapan project has not yet completed" in the latest announcement?

Trackers - refer the following post from Sharpauntie on h/c (though i don't know how genuine it is)...all part of the game i'd imagine

"I love the way this Rights Issue comes out before any other information about Tapan, such as, cash flow reports, profit estimates, buyers of the coal etc etc. Believe you me, all this information is sitting in the underwriters IN Tray. He knows how good this deal is but he's played it down to the bottom of the ocean to suit his own greed, to scare us into believing its not finalised and far from it and too get more for himself, he will tell you otherwise though, but my spy knows everything - the eYe in the sky is watching us all.....

The Underwriter is not too dissimilar to Mr Augustus Gloop from Charlie & the Chocolate Factory - GREEDY.

I might also point out that the Tapan Deal is done and all secured, they could have started mining 12 weeks ago, they are however looking at surrounding tenements that adjoin Tapan."

[STRAT]

The Underwriter is not too dissimilar to Mr Augustus Gloop from Charlie & the Chocolate Factory - GREEDY.
[/I]

Logement on the 18th
Ex date on the 21st.

W@nkers

[STRAT]

Wow a fair lump went through today dropping the price a bit.

The sell column has always been all but empty. Paper shuffling or something more? I wonder.

[steve fleming]

Wow a fair lump went through today dropping the price a bit.

The sell column has always been all but empty. Paper shuffling or something more? I wonder.

The number of shares traded today (21,333,334) exactly equals the shares held by ADD's largest shareholder, Japanese investment house IB Daiwa.

Given the number of trades involved, and different price levels, looks more than just paper shuffling.

Somethings up - guess have to wait to see the SSH notice.

[STRAT]

Hi Steve. It took me an age to gather a wee parcel of these at 2.1c. I thought yesterday perhaps Id blown my cash but is spite of the large transfer yesterday at 2c the sell depth has remained illiquid and the sp has bounced back today on a few shares. Im now quite intrigued to see whats goin on.