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Tin hat on I offer up a couple of thoughts on our favourite oil and gas joke company valuation play US Oil & Gas (USOP) and a little company on AIM, Great Western Mining (LSE: GWMO). You see they are from the same stable and the connection does not end there. Both companies were set up in Liam McGrattan’s pub in, how can I put this, one of the less salubrious parts of Dublin. It is the sort of place where I try to overcome having an English accent by ostentatiously wearing an old London Irish rugby shirt. These days there are different folks fronting up the operations but if they wanted to they could share on travel expenses as while US’s Brian McDonnell heads off to Nye County Nevada to look for his oil, Western’s Emmett O’Connell heads off to Mineral County Nevada to look for his uranium, gold and silver. And guess what? These two counties are right next to each other.
I explain the very serious valuation issues about US Oil & Gas in detail here
Truly I am proud to be of Irish origin knowing how our brave boys in green are engaged in such an impressive land grab on a corner of Nevada which may not actually be producing any oil or metals right now but is clearly bonanza territory for both. I am so proud that we got in there and grabbed this piece of turf before those English bastards at Rio Tinto and BP. To Emmett, Liam and Brian I say:
mo dheartháireacha, thaistil tú ar fud na farraigí an Iarthair mar a rinne Niamh agus embarr. Beidh tú ar ais chuig an tír mar laochra na Fianna
Back in the present time, I note that when Great Western presented its results for calendar 2007 when it was on PLUS it trotted off a stunning list of gold, silver and uranium grades discovered and stated:
“These outstanding results are the most recent of several previously announced surveys over the past year.
2008 promises to be as busy a year as its predecessor. Establishing the extent and volume of the resource of precious metals and U308 will be a top priority. Another will be to seek out a suitable joint venture partner to develop the resource in an expeditious manner. To facilitate both objectives, the Company has retained a firm of Geological Engineers to publish a Competent Persons Report on the overall project; its history, regional geology, local geology, mineralogy, review of sampling programmes, and a suggested work schedule and scope for summer 2008. The Company is well funded to achieve these goals, which your directors believe will provide market validation of the extent and value of our discovery.”
That was on 24 April 2008.
Four years seven months, and six fund raises later investors have lost most of their money and there is no joint venture partner but in his most recent statement Emmett says:“Great Western Mining is approaching a defining stage in its four year quest for a definable economic discovery of a copper/silver/gold ore body in one of its seven prospects in Mineral County, Nevada.
It is anticipated that a nine hole drilling campaign will be initiated in the Autumn following suitable funding and statutory Nevada State Planning permission for drill site locations, a process that has already been initiated. The release of results, post period, of the Company’s Phase 1 Exploration programme has allowed the Target defined prospects and core drill locations to be selected.
Like all shareholders, we look forward to when the drill bit bites the rock and learning what our labours have wrought.”
In November Emmett clarified his top goal: “Target 4 prospect is believed to be a mainly copper bearing structure with some gold and silver values attached.”
Needless to say the most recent fund raise will only be enough to fund that nine hole drill campaign and the ongoing operating loss. Then it will be time for fund raising seven.
My point (apart from the funding issue)? Well I hope you notice that back in 2008 old Emmett was raising cash for the exciting precious metals and uranium he had found in Mineral County. But these days it is largely copper. I presume that the gold, silver and uranium is still there but that the copper is now even more exciting
Oh boy. And to think that there is masses of oil just down the road as well. Those English bastards won’t be making any more “thick Mick” jokes at our expense any more will they. Come on you boys in green. The prayers of a Rosemary Scallon and the whole nation are behind you.
At a £2.2 million valuation I cannot say that I would be rushing to snaffle shares in Great Western although compared to US Oil & Gas with its joke valuation one might regard its share price as almost reasonable.
To read my article yesterday on US Oil & Gas and its battle with Bulletin Board posters click HERE
Libertarian investment writer Tom Winnifrith writes extensively for a number of US and UK financial websites. All of that material appears on his own blog, which also carries his extensive original non financial material, at TomWinnifrith.com – for alerts on all Tom’s follow him on twitter at @tomwinnifrith
