If you're interested in copper or molybdenum mining companies check out Marengo Mining (MRN.to). It is a microcap mining company based in Australia but owns the major Yandera Copper-Molybdenum-Gold project in Papua New Guinea. I wrote about Marengo last year when I read that Quantum Partners LDC (a Soros fund) scooped up 20% of the equity during a capital raise. With MRN trading at 0.16/share on the Toronto Stock Exchange, the stock is essentially a call option on the Yandera asset and expansion. As of 9/23/2010 Marengo had 738.8 million ordinary shares outstanding and 84.7 million options open to acquire shares at various prices.
On August 23, 2010, Marengo raised C$20 million at C$0.084 from various investment funds in North America. The company has no revenue except for interest on cash and has netted losses every quarter due to expenditure burns. For the quarter ended 6/30/2010, Marengo had A$59,498 in revenues, a net loss of A$(4,284,756), A$6,984,582 in cash +A$24,000,000 capital raise, A$25,769,730 in total assets and A$22,443,518 in equity. I put up snapshots of annual and quarterly trends from the Q3 release. It's pretty clear what's been going on, they burn cash and then raise after a year. But going forward, if $COPPER breaks out (IMF says 'few signs' metals supply can keep pace with demand, Copper Will Trade at $11,000 in a Year, Goldman Says), Asian economies boom, inflation hits and/or currencies debase; Yandera could be a hidden gem. The biggest risk here would be lack of capital to survive.
Marengo's been spending money on a "definitive feasibility study" which is expected to conclude by the end of 2010. When they finish the study they'll be able to arrange financing for the project. See videos with Les Emery, Managing Director of Marengo, explaining the Yandera project. According to a recent Marengo presentation, Marengo is "one of the largest undeveloped copper resources in the Asia-Pacific region" with "resources containing 4.9 billion pounds of copper, 176 million pounds of molybdenum plus gold, silver and rhenium". Keep an eye on this copper penny stock. Charts and tables after the jump.
Quarterly Results (Revenue, Net Loss, Per Share, Cash, Total Assets
Marengo Balance Sheet Trend
Annual Income Statement Trend, Key Balance Sheet Items
MRN.to on Toronto Stock Exchange (FreeStockCharts.com)
MRN vs. Copper Price (StockCharts.com)
Copper from 2007 ($4 resistance)