http://www.theaustralian.com.au/business/mining-energy/many-penny...

http://www.theaustralian.com.au/business/mining-energy/many-penny-stocks-are-flops-or-badly-run-but-not-all-are-dreadful/story-e6frg9ex-1225988991241

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Sitting pretty

PUNTERS pushed Resource Equipment (RQL) to a 52-week high of 73c on Friday, no doubt excited about all that work waiting in Queensland and elsewhere for its mine dewatering business.

It is not quite as simple as that.

For one thing, the company is already very busy with a large order book. It can take two to three months to get new piping, and orders for pumps from manufacturers may not be filled until as late as November. Equipment supplies have been under pressure for some time due to the global resources boom; all this flooding will just exacerbate the problem as companies send in their urgent orders.

Then there is the matter of finding somewhere to pump the water to; it could be between six and eight weeks before this can start happening. And some dewatering could require environmental permits.

Longer term, though, RQL seems to be sitting pretty. The company, which took over the shell of the former listed debt collector Repcol, expects to get calls from mining companies outside its present client list.

RQL has found it something of a hard sell until now. While many miners buy their own equipment off the shelf, RQL designs and builds systems tailored to individual mines. It's unlikely to be such a hard sell from now on. Plus, mines are getting deeper -- hence, more dewatering.