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Australian listed metallurgical coal explorer and developer Aspire Mining Limited (ASX:AKM) is focused on the exploration and ultimately to the advancement of the metallurgical coal assets in Mongolia, i.e. starting with Ovoot Coking Coal Project (Ovoot Project).
The Company owns 100% of the Ovoot Project along with 90% of Nuurstei Coking Coal Project and 80% of Northern Railways LLC.
Aspire Group Investment Structure, December 2019 Quarterly Report
Interesting Read: Aspire Scouting Steel Mills Customer in N.E. China: Sinosteel MECC Signed MoU
How has Company Initiated the Strategy to Reach Present Definitive Environmental Impact Assessment (DEIA) of OEDP?
It all started back in August 2018 when AKM entered the definitive and binding documentation with Mr Tserenpuntsag Tserendamba – an existing substantial holder to invest around A$10 million as part of a $12.1 million strategic financing package to implement the OEDP (Ovoot Early Development Project).
Later to further fund the OEDP, Aspire Mining agreed with Mr Tserenpuntsag Tserendamba to invest an additional A$36.3 million through the Placement of A$33.5 million and A$2.8 million by the exercise of options.
Hence, the raised capital, i.e. A$36.3 million along with the existing cash reserves is likely to fully fund the mine feasibility study and road components of the OEDP to support a proposed project financing and decision to mine in the 2H2020.
How Northern Railways LLC Will Aid Aspire?
Northern Railways LLC, a Mongolian rail infrastructure subsidiary owns a Concession Agreement from the Government of Mongolia to construct and operate 549km rail network from the town of Erdenet to the Ovoot Coking Coal Railway in northern Mongolia. The network between Erdenet to Ovoot Railway gives the optimal transportation mode of coal from the Ovoot Project and Nuurstei Coking Coal Project.
The railway construction is reliant on achieving several conditions involving land access agreements and funding. If commissioned, the rail line between Ovoot to Erdenet is anticipated to support up to 10Mtpa of high-quality washed coking coal from Ovoot on a long-term basis at a low cost.
Aspire To Benefit Community, Do Read: Aspire’s Ovoot Early Development Plan (OEDP) To Benefit Community
Significant activities of AKM in last 6 months
The Company went in for 1 for 10 shares consolidation, which ended on 5 December 2019. As of 31 December 2019, company had 507,636,985 ordinary shares outstanding.
Mr Tserenpuntsag secured 52.5% shareholding in the Aspire Mining via placement and options exercise as mentioned above and approved by the shareholders in AGM, held on 29 November 2019. Apart from being the prominent investor to AKM, he is a well-renowned entrepreneur in Mongolia having robust bilateral political connection across all levels of Mongolia's government.
Also, it is worth mentioning that the Mr Tserenpuntsag exercise option and Placement at a price higher than the stock price of the Company, i.e. A$21 cents in a share placement and exercise option at A$18 cents, adds optimism among the investors.
AKM Asset and Cash and Cash Equivalent
At the end of 31 December 2019, the Company has a net asset of worth ~A$80.47 million. Where the current asset comprises of Cash and cash equivalents at A$2.98 million, Short term deposits of ~A$39.22 million and trade and other receivable of ~A$0.45 million, a perfect example of Cash Backed Bargain.
Click To Know More About Cash Backed Bargain: Aspire Mining: A Cash Backed Bargain
Stock Information
The stock is trading at A$0.071 on 11 March 2020. Its 52 weeks high and 52 weeks low stand at A$0.3 and A$0.065, respectively, with a market cap of ~A36.55 million.
