Resource Stocks: This speculative Australian mining stock is set to break out
By J. Christoph Amberger
Taipan Group's Dynamic Market Alert
Resource Stocks: This speculative Australian mining stock is set to break out
by J. Christoph Amberger, President, Taipan Financial News
The World Fact Book has not much to say about Somalia. When it comes to natural resources, it laconically states, “uranium and largely unexploited reserves of iron ore, tin, gypsum, bauxite, copper, salt, natural gas, likely oil reserves.”
Apparently, the likelihood of finding hydrocarbons at the horn of Africa has greatly increased.
On August 30, 2005, the regional administration of Puntland, a self-declared autonomous region in northeastern Somalia, signed a concession agreement with a (presumably) Maldives-registered company, ceding the sole and exclusive rights to all mineral and oil exploration, as well as development on and offshore. This company in turn sold 50.1% of their rights to a small Australian company.
This deal had initially been energetically opposed by Somalia’s temporary caretaker, (TFG) Prime Minister Geedi, who took his objections to the Australian Security Exchange. His letter caused enough of a stir that the company requested the temporary removal from the trading board. Mr. Geedi, however, suddenly did an unexpected about-face and fully endorsed the deal.
On April 21, 2006, our little Australian company secured a letter of intent from Korean National Oil Corporation to buy exclusive rights to 75% of the land covered by the concession. If the deal goes through, they would receive US$10 million signing bonus.
We may never know why Mr Geedi “voted against the deal first, before he voted for it.” The deal has sparked intensive debate among Somalis, especially among the founding groups of Puntland and its current administration. Government action has sparked violent confrontations resulting several deaths in the areas targeted for initial contract works.
Last Thursday, May 24, the Australian oil exploration announced that it had acquired the remaining 49.9% of the Puntland rights from the Maldives-based company. On May 16, the stock had already experienced a more than 30% surge, thanks to a bullish report on Street Talk. Still the company, which might be sitting on one of the largest undeveloped oil properties at the outer fringe of the Arab peninsula, is trading at less than AU$1.
This is a stock like a live wire. You don't play around with it if you don't know what you're doing. You need a Crisis Trader to properly handle this one. We took the liberty of putting together a free Special Research Report for you, which we put up at http://www.taipanfinancialnews.com/resourcestocks0507.html. I recommend that you take a few minutes this holiday weekend to study it.
Quote of the Day
“Imagine a group of greedy businessmen and their cohorts in a room with utterly incompetent representatives of a government in desperate financial situation. Throw in some cash in the mix and it is very likely that you will end up with something similar to the oil and mining exploration deal Puntland authorities signed.”
- Omar M. Abdi & Salah Fatah, April 28, 2006
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