Today I’m running late for a performance by one of my fabulously talented children, so I have to give you just a brief answer and open up the floor for questions and comments — let you, in short, do the research without much of a head start from me. I can, however, at least tell you my solution for the name of this “secret” teased company.
The tease is from Christian DeHaemer, for his Crisis and Opportunity newsletter, and it uses similar arguments to his old Mongolian oil pitch (a stock which has performed spectacularly since he teased it and I wrote about it a year ago) — but this time the tease is for a uranium play in Mongolia.
And he provides very little in the way of hints or clues, but that’s OK — the mighty, mighty Thinkolator is still up to the challenge.
Since I’m not going to fully detail the arguments and clues he provides today, you can always check out the teaser ad presentation here if you like. As usual, it includes some stern-faced photos of Dehaemer, and pics of the Mongolian outback where this resource is located.
And here’s the key bit of info from the tease:
“When a Russian state-owned energy company attempted to seize control of this land, the battle was on. There were months and months of lawsuits, court battles, and wars of words in the press…
“But when the dust settled, a small North American miner was left standing — with a very big assist from China.
“And that’s where we come in today, with the partnership between this tiny mining company — currently valued at a rock-bottom price of less than 60 cents — and energy-hungry China, established and ready to move forward.
“But what is it, exactly, that this little-known firm needed China’s help to secure control of and fend off an overly aggressive Russian state energy agency?
“To put it simply: an estimated 52.5 million pounds of uranium.”
So who is it? Well, based on the estimated 52.5 million pounds number, I can suggest a company that might match (their estimate actually claims 52.9 pounds of probable reserves on the two most advanced of their claims, the ones likeliest to be mined in the relatively near future) — but that’s not enough for the kind of absolute confirmation that I like to have before I mention a microcap stock to a few thousand of my closest friends.
But indeed, this company has been close to partnering with the Chinese National Nuclear Corporation — CNNC offered to buy them out about a year ago at a decent premium, in fact, though they later backed out of the deal. I don’t know if there’s still a cross-ownership or partnership with China.
So I looked to another source of occasional enlightenment: photos. At the top of the teaser ad, DeHaemer showed a picture of the valuable “wasteland” that this company owns. And whaddya know, but as far as my inexpert eyes can tell that picture was lifted directly from this same company’s website — so that’s enough to tell me that he’s almost certainly (though I won’t go so far as to claim my usual 99% certainty this time) talking about a little Canadian company called Khan Resources (KRI in Toronto, KHRIF on the pink sheets). It does trade for less than 60 cents, it’s at 50 cents as I type.
If you’d like to see that matching photo, and the description of their property, it’s here on Khan’s website.
Unfortunately for Khan, they apparently no longer have those uranium mining or exploration licenses in Mongolia — from what I read, they didn’t win the dispute with the Russians thanks to Chinese partners, they lost, and the Mongolian government took back the permits for the Dornod Uranium Project to partner with the Russian nuclear agency, in part because the Russians are going to help them build a nuclear power plant somewhere nearby (the uranium site is fairly close to the Russian border).
The latest news I saw is that Khan Resources has officially taken the Mongolian government to arbitration over this decision to try to get their asset back (or their interest, at least — they apparently had held, or do hold if you think that stands in some way, 58% of the interest in that mining zone).
So from the very, very little research I’ve done on this, it looks like Khan is worth not so much unless Mongolia somehow gives them back their licenses. Maybe I’m misunderstanding the situation, and we’ve certainly seen cases of Mongolia backtracking on investor-unfriendly moves (like the huge windfall tax that was going to be due on gold and copper mining — when that was scaled back Ivanhoe Mines and their Oyu Tolgoi project suddenly got a lot more valuable). If you’re an aggressive speculator and like what you see otherwise, you might think of these shares as some kind of a call option on the international arbitration — after all, Khan is asking for $200 million in damages, and the company itself has a market cap of only about $30 million. And yes, the fact that they’re so teensy means that the stock can move for any reason, or for no reason at all — I imagine anyone speculating in this is just placing bets about whether they’ll get any redress for those permits they thought they owned, and even the fact that I’m mentioning it here is likely to move the stock regardless of what I say about them. As far as I can tell in a quick look, Khan doesn’t own anything else or have any other projects outside of Mongolia.
There are also other folks looking for uranium in Mongolia or hoping to restart old exploration projects, among publicly traded stocks I’ve seen a bit of chatter about the much larger ($400+ million market cap) East Asian Minerals (EAS in Canada, EAIAF on the pinks), which has a number of projects in Mongolia and Indonesia and seems pretty active, and the pocket-change sized Pitchblack Resources (Yahoo Finance says they have a market cap of just $3 million — that’s PIT in Canada, CHXMF on the pinks), which seems to have had an agreement to buy EAM’s Mongolian uranium assets — don’t know if that deal ever went through, and as far as I can tell Pitchblack (used to be called Cash Resources) provides only minimal public information and seems to have backed out of a number of deals in the last year.
I certainly don’t know enough about any of these to tell you whether they’re worth anything, but from the clues given it sounds to me like DeHaemer must be teasing Khan Resources — if you’ve got a better solution (or a better uranium story — that commodity is heating up again in teaser-land) I’d love to hear it, and if you’d like to start your research on this one feel free to share as you like with a comment below. Thanks!