New technology using shale oil to reduce coal-burning pollutants makes this miner worth a punt. David Haselhurst reports.
Oil shale hopeful Greenvale Mining has nearly doubled in price during the past month and, after making a cryptic announcement to the stock exchange, there’s a likelihood it could go much higher.
Company chairman Leslie White has announced that a letter of intent has been exchanged to acquire technology that’s expected to slash pollutant emissions from coal-fired powerhouses. It’s claimed the technology, based on injecting crushed oil shale combined with pulverised coal into power station boilers, could eliminate sulphur dioxide emissions by 50%, nitrous oxides by 70% and mercury compounds by as much as 90%. At the same time, it would also generate valuable carbon credits.
Greenvale and its associated company, Esperance Minerals, own vast shale deposits within 70km of the Queensland port of Gladstone. The rich Alpha deposit comprises 104.4 million tonnes containing 89.5 million barrels of oil.
The companies have had to sign non-disclosure and confidentially agreements that bar identification of the parties concerned until a final licensing agreement is signed. That’s expected by the end of July.
What has been divulged is that one of the licensing parties is a US government laboratory that specialises in oil shale emission control technologies. The other is a Californian-based company claimed to be the world’s leader in combustion and pollution-reducing technologies.
Greenvale and Esperance say that an agreement will give them exclusive rights to the technologies for Australia, New Zealand, Japan and India. This may open opportunities for the export of their shale, which they claim could be open-cut mined and crushed for about $US12 to $US15 a tonne. With a heating value of around 4000 British thermal units, it compares well with brown coal and should have a similar market value.
Exploitation of their deposits has previously been stymied because mining and retorting the shale on site to extract the oil has many environmental problems. If development goes ahead, the companies aim for an initial production of 50,000 tonnes of shale per day.
The accompanying chart shows the complex structure that links Greenvale, Esperance and a third listed company, East Coast Minerals.
Greenvale has an issued capital of 12.8m fully paid shares and 9.01 million 5¢ contributing shares that have 15¢ yet to be called. At $1.35 each for the fully paids, the company carries a market capitalisation of $17.4m, net cash at the end of March of $958,000 and an expected deficit for the year to June 30 of about $300,000. Esperance, at 65¢ per share, has a market capitalisation of $16.85m. At 18¢, East Coast is valued at $7.02m.
I’ve gone for Greenvale, and will buy more if enough shares come on the market.
Apart from that, we’ve bought into Quickstep Holdings. It is a Perth-based company that boasts a patented method of making composites, such as carbon fibre, faster and cheaper than present technologies. A string of reports should come from this company in coming months and we’ll examine its prospects next week. To pay for it all, we’ve sold a few holdings.
GRV Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
