By Dr. Michael Green
MetalNRG shares rose sharply yesterday afternoon on the highly compelling news that the company has made a breakthrough in its ongoing civil legal proceedings in the English High Court against Brit Energy Holdings LLP (LLP), Mr Pierpoalo Rocco and BritNRG Limited (Joint Venture Company).
The hot news is that MNRG’s application for summary judgment against the LLP and the Joint Venture Company for inter alia (legal speak for among other things) on three important matters. Firstly, the striking out of the defences filed by the LLP and the Joint Venture Company.
Secondly, a declaration that the series of agreements entered into in April 2021 should be set aside. And last but no means least, is that the recovery from those defendants of monies paid to the LLP totalling £1,019,999, plus interest and costs, has been granted.
It looks like there is no going back as an application by the LLP and the Joint Venture Company for leave to appeal and an application by Mr Rocco, the LLP and the Joint Venture Company for a stay of execution, were all dismissed at the same hearing. Of course, they could appeal to a higher court (and have 21 days to do that) but given the judgement would they want to waste a lot more money?
MNRG has the judgement that it was looking for and the verbal logic and the reasoning behind it. It will be waiting to get the full written judgement and find out when interest will be paid. Plus, there will be news on the amount of costs and the court order to pay. Now MetalNRG has just to make sure it gets paid.
With the shares trading at 0.135p, the company now has a lowly market cap of just £1.6 million. MNRG is not alone in seeing its stock price hammered over the past 12 months as a similar fate has been dealt out to a whole host of juniors. With the legal action going on there was a lot of investor concern – legal spats are rarely a positive matter for a company. MNRG had a summary judgement hanging over it and out there in the big bad stock market were a lot of ridiculous claims being made by non-regulated individuals. We now see that MNRG is due a serious rerate.
The focus moving ahead is definitely on green energy. £1 million is very useful spending power to have to fuel growth via MNRG’s working relationship with AIM listed gasification technology business Eqtec for developing green energy projects. The first plant under this relationship looks as though it will come on stream soon. This is an Italian project where MNRG has a c.26% stake for putting €750,000 into the project.
It has to be pointed out at this stage that MetalNRG’s €750,000 represented both an equity portion and a shareholder loan. Once the plant is up and running and the revenue stream has been established then MNRG will move to get this shareholder loan refinanced with debt finance – this will free up the funds for the company to invest in the next green energy project.
MNRG invests at a really late-stage and ignores green field projects, concentrating on ones that need to be refurbished, so plants that have been in operation in the past. Investing late stage means that the chosen projects can be revenue generative in 12-18 months. Apparently, there are no shortage of such projects, and the constraint is having the money.
In addition, it looks likely that some of these new funds will be applied to the company’s GoldRidge Gold Project in Arizona where recently there has been firm evidence that seems to point towards the real possibility of a larger gold/base metal system that is just begging to be discovered here.
In the summer, investors learnt that MetalNRG had completed a Phase I geochemical campaign at its Gold Ridge Gold mine property and the team reported very encouraging results that pave a pathway to further exploration work to be focussed and planned. In a nutshell, the findings of the geochemical programme encouraged the company to conclude that the area may host a larger mineralisation system controlling all the surface mines and showings.
At the time, this was a point that the project’s Senior Geologist Bart Stry elaborated on by commenting that, “These results confirm our previous beliefs, that there is indeed a real possibility of a larger un-discovered gold/base metal system at Gold Ridge; we are now working with the Board to establish the next steps.”
Giving a bit of background, the Gold Ridge Gold Project lies 85 miles east of the Tucson in Dos Cabezas Mining District, Cochise County, in Arizona. MetalNRG has a 100% interest in this project which covers an area of 9.3km². This is a brownfield gold exploration play where there are ample opportunities for development as the area remains underexplored for the past 35 years and looks to have plenty of potential for making new gold discoveries.
The Gold Ridge Project spans a large area which includes three historical underground gold mines called Gold Prince, Gold Ridge and Dives. They were each mined over various intervals between discovery in 1877 and 1996. Historical production at the Gold Prince Mine through to 1996 saw a total of around 22,000 ounces of gold mined above the #6 level. This mine was operated from 1984 to 1996 by Phelps Dodge, Queenstake Resources and lastly Western States Mining Corp.
We appreciate that a lot of things have changed since we initiated coverage of MetalNRG with a Conviction Buy recommendation and a 1.2p target price back in January 2021 when the stock was trading at 0.335p. At this depressed price we are happy to confirm our Buy stance as our view is that the stock has been woefully oversold and now has potential multiple near term value realisation catalysts. Currently at the 0.135p mark, we see a potentially good buying opportunity.
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