Mines and Mines of Ore
Despite the raucous, and sometimes obnoxious, rants and raves of Jim Cramer, you gotta like the guy. He would surely be voted “best-guy-to-get-seated-next-to” at a Catholic wedding. Partially because of his contrarian viewpoints and partially because of the fact that he unabashedly shouts those viewpoints, we like to hear what he has to say and just a chuckle out of how he says it.
Now, Motley Fool may not have the I-am-at-my-espresso-limit manner of speaking. They may not even have those very cool baby-crying/stock-tanking/game-show-winning sound effects. But they, like the Cramer, have built their fan base by being strong minded, straight talking, contrarians. And, we’ll graciously forgive the marketing move of wearing those dreadful hats for the sake of a cool name.
Motley Fool also falls into our good graces based on a common opinion about the mining trend in the global economy. In December, Motley Fool asserted that 2008 will be an amazing year for iron ore – with an estimation that the price of iron ore will increase as much as 75%. And as much as we would like to think this is our (and Motley Fool’s) little secret, the banks funding iron ore projects seem to agree.
$15 million Retainer Would Go A Long Way
Monday, U Mining Resources Inc. (OTCPK: UMNG) announced the preliminary agreement, a BOOT (Build – Own- Operate – Transfer) mining concession for the exploration, development and production of a world-class iron ore resource in the country’s Mount Simandou region. Management believes the agreement holds an initial potential of $15 million and possibly upwards of the $100 million mark longer term.
But wait there’s more . . .
UMNG was back in the news on Tuesda with yet another promising corporate development announcing the receipt of a term sheet from a reputable New York-based Merchant Bank. UMNG is to receive financing of $7.5 million for phase one of the Guinea project. With the financial lending climate constricting, financing of this sort for UMNG’s business venture may be a testament to its potential.
Also in this week’s press, U Mining stated that the “. . .preliminary agreement for the infrastructure development phase of the project alone called for UMNG to be awarded a USD $15 million retainer fee to commence operations. . .” With positive announcement after positive announcement, we could be looking at a strong market performer as well as a very solid business venture.
Commenting on Tuesday’s news, UMNG CEO Jean Michel de Montigny stated “This step is yet another important one made towards being officially awarded this long-term contract in Guinea; something that will ultimately have a prodigious effect on our revenue growth and on increasing shareholder value in the medium to long-term.”
More On the Project?
UMNG management has publicly stated the opinion that their latest concession will soon become a world-class iron ore resource. According to a recent press release issued by the company, the property covers a 55-km-long zone in the Simandou Mountain Range. Drill assays from previous exploration programs on the Simandou Range indicated a high-grade hematite, with a concentration of over 67% Fe (Iron), and an estimated of 3 billion plus metric tons of iron ore resources (Source: UMNG/Guinea Ministry of Mines and Geology, 2005).
More on the Company:
1. The company’s primary division is involved in the acquisition and development of uranium resource properties. U Mining’s uranium project interest is mainly focused on properties in Quebec.
2. U Mining’s second division is involved in the identification, acquisition and development of emerging alternative (or green) fuel technologies.
3. A third focus/division for U Mining was announced in October-2007, and involves project management for a major infrastructure development and energy and precious resources development project in the West African nation of Guinea.
Given management’s recently stated optimism regarding the future potential of its pending deal with the Republic of Guinea, the general optimism in the market about the potential price increase of iron ore and estimates that the region to be explored contains more than 3 billion plus metric tons of iron ore resources, we feel that UMNG is only scratching the surface of its market. But with the new ample financing, UMNG should have no trouble “digging in”.
