www.unuudur.com » Aspire Mining: to benefit from Russia, China, Mongolia infrastructure deals

Aspire Mining: to benefit from Russia, China, Mongolia infrastructure deals

[Нийтэлсэн: 11:00 17.07.2014 ]


- Aspire Mining Ltd (ASX: AKM) owns the Ovoot Coking Coal Project (Ovoot), and is also progressing the Northern Line Rail Line (NRL) in Mongolia.

- Ovoot is one of the largest undeveloped coking coal projects globally. Its appeal is evidenced by the Aspire / Noble Group alliance.

- Along with Tavan Tolgoi, Ovoot is recognised as one of the key potential coal suppliers to Mongolia’s Sainshand Industrial Park.

- Current off take interest in Ovoot coking coal exceeds targeted production.

- The Ovoot project requires a 547km ($1.3b) rail line linking the project to existing rail infrastructure.

- Request for a Concession from Northern Railways LLC is awaiting approval for construction by the Mongolian government. This would de-risk the entire Ovoot project.

- The NRL could become an important link for Russian/Chinese trade. It is moving from a project specific rail connection to becoming part of a network

- Financing interest (EOI) has already been received for US$1.3bn to construct NRL. It may also find funding support from Russian institutional investors for both NRL and Ovoot development

- Mongolia has embarked on a massive upgrade of its railway system that should see the development of the NRL, as part of a new and upgraded country wide network

- We believe that downside risk for Aspire is limited while infrastructure risk has been reduced

- Based on a peer company analysis, we consider Aspire Mining to be significantly undervalued. We believe that the rail concession could be granted within the next six months and hence a catalyst for a major re-rating of Aspire’s share price. We forecast a 6 – 9 months share price target of $0.125 per share (see analysis and valuation) after rail concession is granted for NRL.


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