Resource Stocks: Atomic Resources – Africa Top 5 Experts Pick
January 19, 2011
Excerpt from ‘Resource Stocks’ magazine
AFRICA TOP 5
Theres no doubting the allure of the dark continent for resource companies. At last count, there were more than 120 Australia-listed stocks with an African project as the primary asset. Our experts pick their five favourite companies.
Peter Hayes – Investment Manager, Alto Capital
Number 1. Atomic Resources (ATQ)
Focused on the exploration and development of major thermal coal assets in Tanzania, the company recently raised AUD5 million to further develop its assets, with all those shares going to coal industry leviathan Graeme Robertson. He helped develop New Hope Corp to a AUD4 billion company, and was also a developer of the largest open cut coal mine in the Southern Hemisphere, PT Adaro Indonesia. The company has commenced drilling to prove up its reserve tonnage to 80 million tonnes, and will commence small-scale mining for the local market in early 2011. If you only buy one share in 2011, make sure its ATQ.
Atomic Resources: Junior’s management team given a strong boost as it advances towards mine production
January 13, 2011
Gold and Minerals Gazette
Mark Fraser
International coal veteran Graeme Robertson had some sound reasons for investing in ASX-listed energy player Atomic Resources Ltd.
For a start, the junior has significant thermal coal assets in Tanzania a democratically stable African growing nation which is keen to see the development of the company’s Ngaka project in order to help meet its own increasing domestic electricity needs.
Secondly, being situated relatively close to Africa’s east coast means the company has access to India, one of the world’s largest energy markets.
Thirdly, Atomic’s assets are fundamentally sound, providing one of the most intriguing investment opportunities currently available on the Australian bourse.
During late November, Atomic announced that Robertson had become its chairman following a $5 million capital
raising involving the issue of just over 22.7 million shares to the coal veteran’s nominated companies of Aspac Mining Ltd and Farjoy Pty Ltd.
Welcome arrival
His decision to take a stake in the junior did not go unnoticed, with Alto Capital Research telling investors that the appointment “will greatly assist (the company) as it transitions from explorer to producer”.
“(Robertson’s) past experience in Africa and particularly his extensive knowledge of the global coal industry will prove to be invaluable,” the investment advisor noted.
In a previous life Robertson was the developer and chief executive of PT Adaro Energy Tbk in Indonesia, a company which eventually operated the largest open cut coal mine in the Southern Hemisphere.
He was also the managing director of New Hope Corporation Ltd from 1987-2005. Later, in 2010, he was awarded the Coaltrans Lifetime Achievement Award for his contribution to the sector.
Just before his appointment as chairman of Atomic, Robertson told a small gathering in Western Australia that he was fairly clear about where the company was going and what its abilities were.
“My main focus is getting into production because I don’t see the point in having coal in the ground it’s just a waste,” he said.
“And again I like to see production because it saves poor suffering shareholders from having to fund exploration.”
Impressive inventory
As it stands, Atomic’s most advanced project is Ngaka, a thermal coal development which sits within the Ruvumu District in Tanzania’s south west some 1,100 kilometres from the country’s capital of Dar es Salaam.
Mbalawala, located in the southern portion of the Ngaka Coalfield, has a JORC-compliant resource of 250 million tonnes (measured 139 Mt, indicated 66 Mt and inferred 46 Mt) as well as a proven reserve of 40 Mt.
Furthermore, total coal resources at Ngaka are expected to rise to over 400 Mt in the near term. All of Atomic’s energy assets in Tanzania are held through Tancoal Energy Ltd, in which its 85%-owned subsidiary Pacific Corporation East Africa has a 70% stake.
Tancoal plans to develop Ngaka in three stages, with the first phase involving the production of 150,000t in 2011 before ramping up to 1 Mt per annum by 2013 in order to satisfy both local demand and that of neighbouring countries.
Meanwhile, stage two consists of supplying 1.5 Mtpa to a proposed 450 megawatt power station. This development has already been subjected to bankable due diligence and deemed commercially viable. Production during this phase is expected to begin in 2014.
Finally, the third step will involve the exporting of 5 Mtpa of thermal product through either the ports of Mtwara or Nacala, with Robertson saying India would be the prime market.
“That’s how I see the future for Tanzania,” he noted.
Impost lamented
In addition, Robertson believed there would be further foreign investments made in the Africa’s coal sector and suggested some of the likely players would be Australian outfits not wanting to be hit by the Federal Labor Government’s current plan to introduce a minerals resources rent tax.
“Australia I don’t know … the stupidity of governments I don’t subscribe to,” he bemoaned.
“One of the great things probably in Australia that occurred was the evolution of the superannuation scheme, which gave the country vast amounts of savings which could be utilised in its development.”
“And now the government’s stripping the cash that’s being generated out of the mining industry to pay for its ill begotten projects and their interesting failings, and I don’t see that as a proper swap.”
“So I would say that the overseas mining development and witness the number of Australian companies in Africa
is huge.”
“Everyone is going to Africa it’s a new frontier, it’s exciting and it’s got all of the potential, without the headaches if structured correctly, one could have with Australian mining.”
“That’s not to say that you can’t make profits (in Australia) … you can make very good profits in Australia you’ve just got to let more of them go to government and less to your shareholders.”
Atomic Resources Quarterly Activities Report Dec 2010
December 31, 2010
Download Report: ATQ Quarterly Activities Report Dec 2010
Atomic Resources completes A$5 million capital raising
November 24, 2010
Atomic Resources Limited (Atomic) is pleased to announce it has completed the A$5 million capital raising by issuing 18,181,818 shares to Aspac Mining Ltd and 4,545,455 shares to Farjoy Pty Ltd, companies nominated by Mr Graeme Robertson.
Atomic is pleased to announce that Mr Graeme Robertson was appointed on 23 November 2010 as a director to the Board and has to act as Chairman. Mr Clive Hartz has agreed to act as Deputy Chairman.
Mr Robertson has extensive experience in pioneering and managing world class mining and energy operations throughout Africa and the Asia-Pacific region. He was CEO and developer of the largest open cut coal mine in the Southern Hemisphere, PT Adaro Indonesia, and is a former Managing Director of New Hope Corporation Limited (1987-2005). In 2010, Mr Robertson was awarded the Coaltrans Lifetime Achievement Award for his contribution to the coal industry.
Atomic welcomes Mr Robertson to the board.
Atomic Resources announces share placement to raise A$5 million
November 3, 2010
Share placement to raise A$5 million, Graeme Robertson to be appointed to Board
Atomic Resources (ASX: ATQ) (Company) is pleased to announce it has entered into an agreement, subject to shareholder approval, to issue 22,727,273 new, fully paid ordinary shares in the capital of Atomic at an issue price of $0.22 per share, to raise $5 million (Placement). The subscriber to the Placement is Aspac Mining Limited (or nominee), an entity owned and managed by Mr Graeme Robertson.
As a term of the Placement, and in recognition of his extensive coal industry experience, the board of Atomic Resources has invited Mr. Robertson to accept an appointment as a non executive chairman of the Company, with effect from the Placement issue date.
Mr. Robertson has been a long-standing shareholder of Atomic Resources and a very strong supporter of the Company and its plans to develop a major thermal coal mining operation in the southwest region of Tanzania. He has been responsible for pioneering and managing world class mining, energy and transport infrastructure operations throughout Africa, Australia and the Asia-Pacific region. He was CEO and developer of the largest open cut coal mine in the Southern Hemisphere, PT Adaro Indonesia, and is a former Managing Director of New Hope Corporation Limited (1987 – 2005). In 2010, Mr Robertson was awarded the Coaltrans Lifetime Achievement Award for his contribution to the coal industry.
Atomic Resources will shortly dispatch an addendum to the Notice of 2010 Annual General Meeting (together with a new proxy form), which will be held at 11.00am (WST) on Tuesday 23 November 2010 at the London Room and Courtyard, The George, 216 St Georges Terrace, Perth. Shareholders are encouraged to read the addendum (which contains information in relation to the Placement).
The funds raised through the Placement will be used to fund a near-surface drilling and exploration programme at the Mbuyura/Mkapa and Mbalawala coal fields in the Ngaka Coal Basin, commencing in December 2010 and will enable Atomic to commence small-scale coal mining before the end of this calendar year.
The Placement was arranged and advised by Intrasia Capital Pty Ltd and Perth-based Delta Capital Pty Ltd.
AfrAsia Bank raises Rs274m of FDI through Tier 1 Capital increase
October 6, 2010
AfrAsia Bank raises Rs274m of Foreign Direct Investment through Tier 1 Capital increase and attracts significant shareholding from world-renowned PROPARCO (Groupe Agence Française de Développement) for continued international expansion.
AfrAsia Bank Limited today announced the addition of an important world-class strategic partner, PROPARCO, to its shareholding structure as a vote of confidence in its financial performance and positioning in the local and regional markets. The new shareholder, a development financial institution whose main shareholder is the Agence Française de Développement (AFD), will contribute to the development of the Bank’s regional corporate and private banking growth strategies. PROPARCO’s mission is to be a catalyst for private investments in developing countries which target growth, sustainable development and reaching the Millennium Development Goals (MDGs).
PROPARCO finances investments that are economically viable, socially equitable, environmentally sustainable and financially profitable. It tailors its sectoral strategy to the level of development of each country and focuses on productive sectors, financial systems, infrastructure and private equity investment. PROPARCO invests in a vast geographical area that encompasses both the major emerging countries and the poorest countries, particularly Africa.
To date, AfrAsia Bank’s growth plans and strategic vision have been clearly validated by the encouraging response from new investors, including South African shareholder Dale Capital Group, the Singaporean private equity firm, Intrasia Capital and now PROPARCO. PROPARCO is taking a 9.22% stake in the enlarged share capital of AfrAsia Bank which has just concluded a Rs274m rights capital expansion. This capital increase also sees existing shareholders Dale Capital of South Africa and Intrasia Capital of Singapore increase their stakes in AfrAsia to 9.99%. The fresh foreign direct investments into Mauritius will count as Tier 1 capital for the bank.
Mr Arnaud Lagesse, Chairman of AfrAsia Bank declared that “Since inception, AfrAsia Bank’s vision is to bring change and innovation to Mauritius banking and to grow regionally. After 3 years of operations, we are seeing our growth in 4 regions, namely South Africa where the Bank has 2 representative offices, Singapore, India and now France with the PROPARCO shareholding, which will help with French connections as well as develop relationship with the African regions where they have already strong presence with investments in different sectors”.
Mr James Benoit, CEO of AfrAsia Bank added that “Despite market turmoil, the bank’s performance has been truly encouraging which has attracted world class shareholders on board with us. Now with PROPARCO, we will continue to deliver on our promise to be a truly one-stop boutique regional bank linking Mauritius and the Africa-Asia trade corridor”.
He further added “AfrAsia Bank was among the first to recognize the growth potential of the African Lions to match the rise of the Asian Tiger economies. Much of our strategies and growth are coming from this mission to be the reference Private and Corporate Bank in the region to facilitate Africa-Asia trade and investment flows. This can be seen in our strong customer and financial growth which is hard to find elsewhere in the world these days”.
PROPARCO’s CEO Luc Rigouzzo remarked that the strategic vision of AfrAsia Bank was compelling to them:”PROPARCO supports AfrAsia’s vision of Mauritius as a value-adding platform for Africa-Asia financial flows, in line with the idea of development of the South-South trade fostered by the AFD Group.”
Laurence Breton, Director of AFD in Mauritius, further explained that “The transaction was part of the group’s more general approach to build up strong relationships with Mauritian conglomerates and accompany them in their investment strategy abroad, notably in Africa and Madagascar.”
Two New Contracts Awarded to Techenomics
September 27, 2010
Techenomics International have recently been awarded two new contracts. One contract was won by PT Tekenomics Indonesia and the other was awarded to Techenomics Australia.
PT.Tekenomics Indonesia successfully won the tender for the KPC Sangatta Oil Analysis contract and will start services immediately.
The three year contract covers the supply of oil analysis, grease, coolant and fuel testing for the large coal mine operated by Kaltim Prima Coal in East Kalimantan, Sangatta Indonesia. At this site the company operates a large mobile fleet exceeding 100 dump trucks and associated support equipment, power station, coal process plant and ship loading facilities.
PT.Tekenomics Indonesia will relocate an existing Sangatta laboratory to the Sangatta mine site and are expected to achieve ISO17025 accreditation by the end of the 2010 calendar year. All test work reporting will be provided to KPC via the company’s revolutionary Blue Oceans software, the ultimate in condition monitoring software.
The winning of this contract will help improve the credibility, reliability and quality of service in that region for PT.Tekenomics Indonesia, further emphasizing their vision to be the best Oil Analysis provider in East Kalimantan and the dominant Oil Analysis service provider in Indonesia and ASEAN.
“ We are committed to continuously improving our services and range of test work, together with total concern with quality and the development of new customised services to meet customer requirements.” Says Chris Adsett, CEO, PT. Tekenomics Indonesia.
“PT.Tekenomics Indonesia would like to thank KPC for this opportunity to support their Sangatta operations and look forward to a long and successful business relationship” continues Mr. Adsett. Techenomics Australia was also awarded the BOOM Logistics Tender for the provision of Lubricant Analysis. BOOM logistics maintain a national presence and is Australia’s leading supplier of integrated lifting solutions operating in excess of 619 cranes with up to 500 tonne capacity across Australia.
The Tender is a two year National Wide contract that will cover 62 depots; consisting of more than 619 cranes and another two and a half thousand pieces of equipment.
For more information please visit the Techenomics News Desk
Atomic Resources completes BFS, boosts resource at Mbalawala to 251 million tonnes
September 20, 2010
Western Australia based Atomic Resources (ASX: ATQ) has completed a bankable feasibility study for a proposed open pit mine at Mbalawala, located within the Ngaka Coalfield in south-western Tanzania, with an initial reserve of 40 million tonnes.
The BFS was based on these parameters:
- Conventional open cast mining
- 40 Mt JORC Code compliant Proved Reserve (based on Run-of-Mine cost of US$32/t)
- Local market to supply 450MW power plant
- Capital cost of US$205M
- Tanzanian Strategic Investor Status and Special Mining License
This results in a 25 year mine life at a production rate of 1.5Mt per annum with a hurdle rate of 25%. This is without the additional exploration that will be performed over the next few years.
The study indicates that there is high potential to increase the Proven Reserve component of the Measured Resource, in both open cut and underground mining areas, by continued mine development planning.
A review of the modelled coal outside of the ultimate pit design has defined a potential underground mining inventory of 40Mt tones of coal.
Atomic’s joint venture partner in Tanzania, the National Development Corporation have indicated their satisfaction with the BFS at this stage.
The Mbalawala resource has increased 18% to 251 million tonnes, with Atomic identifying an exploration target of between 160 and 320 million tonnes, and the Wave Engineering Solutions bankable feasibility study confirming the economic viability.
A surface drill program of more than 50 surface boreholes will commence later this year with the drilling programme extending into 2011.
Additional concessions over the coalfields of Liweta, Mbamba Bay and Mhukuru remain largely untested and may represent considerable upside coal potential.
Techenomics International and M-Power form a strategic alliance
July 20, 2010
Techenomics International is please to announce the formation of a strategic alliance with M-Power Australia to develop markets for Oil Analysis and state of the art condition monitoring practices in Taiwan.
M-Power Australia is an organisation that specialises in modern fuel and lubricant enhancers and having already established itself a market position in Taiwan, Techenomics see this alliance as a huge way forward for the company.
“Our companies have worked closely together in other markets and this opportunity to establish joint operations in a new market, Taiwan, we believe is a very positive step for the future for Techenomics,” said Mr Chris Adsett, CEO, Techenomics International.
The strategic alliance with M-Power Australia fits Techenomics’ global business model of positioning strategically located laboratories so as to service diverse geographical markets with a fast turn around and viable costings.
All product delivery will be available via the company’s Blue Ocean software that is revolutionising the condition monitoring industry by its combination of various tools within one package to allow the equipment owner to focus on areas of cost improvement, better utilisation and reduce downtime.
Techenomics’ complete range of products and services will be available via this alliance together with the advanced fuel and lubricant enhancers in the M-Power range.
Experts Put Ngaka Project’s Coal Reserves at 800 Million Tonnes
July 19, 2010
Tanzanian Daily News
Exploration data have strongly suggested that the Ngaka basin could have coal reserves as large as 800 million tonnes, according to Atomic Resources.
The company has said Ngaka Coal Project, examined by Dr Pascal Semkiwa, Principal Geologist at the Geological Survey of Tanzania (GST), offers high prospects. Dr Semkiwa’s recent visit to Ngaka coincides with the opening of test pits to enable bulk sampling for domestic customers.
Dr Semkiwa has studied Tanzania’s vast coal deposits his entire career and completed his doctorate degree in Germany researching on coal formations in the mineral-rich south western Region of Ruvuma, where the Ngaka Coal Project is located.
The doctor is arguably the most qualified and experienced geologist to have ever explored the Ngaka Coal Basin, and he continues to be a very strong supporter and advocate of the Ngaka Coal Project in his dealings with the Tanzanian government.
“The weight of available exploration data, including drilling conducted by the British Colonial Development Corporation (CDC) and now Tancoal, strongly suggests that the Ngaka basin could have resources as large as 800 million tonnes.
“I am now confident that this target is realistic and would greatly benefit Tanzania as well as many other countries,” said Dr Semkiwa.
During his visit, Dr Semkiwa examined coal seams and visually inspected coal samples being extracted from the test pits at Ngaka. Dr Semkiwa added: “The quality and consistency of the coals I saw outweighs what I anticipated it to be.”
“Exploration drilling gives a very good idea of what lies beneath, but nothing can compare with the excitement for a geologist to be able to see the coal uncovered. This will be the commencement of commercial coal mining in a country that has always imported all of its coal needs, yet has vast coal resources in the Ngaka basin.”
“Additionally, Tanzania could now also be exporting good quality coal to neighbouring and overseas countries.”
Dr Semkiwa added that, “the quality of the coal at Ngaka is very good and consists of a high proportion of bright bands and fewer dull bands, making the coal quality a high standard when compared to other coal regions. This means that the vitranite indicates a higher quality and therefore higher calorific value.”
“Not only is the calorific value very good, but the sulphur content was low, which made it a good coal for use in a thermal coal-fired power station and reduced the incidence of spontaneous combustion (caused by high sulphides) which makes it a more sought after coal.”
Atomic is in the process of preparing a Bankable Feasibility Study (BFS) on its Ngaka Coal Project, which currently has proven JORC resources in excess of 212 million tonnes.
The company has indicated its intention to announce a major resource upgrade shortly which it anticipates will substantially increase the size of its coal resources in the Ngaka Basin.