BORNOIL (7036) - October Highlight - Bornoil - Gold Blast
Oct 2, 2014
Borneo Oil Berhad (Bornoil - 7036) was used to be known as Sugar Bun Corporation Berhad back then before 2007. However, due to the company new direction in it's involvement in the downstream oil and gas, renewable energy and mining, Sugar Bun Corporation Berhad had since then changed to Borneo Oil Berhad to reflect the diversified business in the group. Currently under Bornoil's active business portfolio includes
- Gold Mining Division
- Fast Food Franchise Division (Sugar Bun)
- Oil and Gas Division
- Property & Management Division
Let's have a quick look at the latest price chart of BornOil.
BornOil had been consolidating at the range of RM 0.65 for a period of 9 months. The consolidation had saw a series of saturation and will be looking to see a new burst of volume visiting Bornoil after a corporate exercise which had saw a PAR value reduction of RM 0.90 from RM 1.00 which is effective on 25th September 2014. Bornoil will be looking to trend higher in the coming days ahead, and will be on a positive mark in breaking RM 0.70 convincingly.
While the mother share had been looking promising, BornOil-WB will be an even attractive target after being traded with a 6.8% discount from the mother share, as exercise price is being revised to RM 0.10, putting BornOil-WB into a huge discount. At the current closing price of BornOil at RM 0.66 as of 1st October 2014, BornOil-WB should be trading at RM 0.56 after exercise price had been revised to RM 0.10. To put it more interesting, the expiry of the warrant is slated at 28th February 2018, putting it more attractive to be trading at a premium instead of a discount.
BornOil - Gold Rush
BornOil had finally found it's way to a golden land after securing a gold mining contract from Champmark Sdn Bhd for gold prospecting and mining on a 400 acre area for 5 years and renewable option of another 5 years in Merapoh, Mukim Batu Yon in Lipis, Pahang. To recap back, MMC Corp Berhad had leased the mining land from Perbadanan Kemajuan Negeri Pahang which in turn contracted it to Champmark Sdn Bhd for mineral prospecting and mining.
In June 2014, BornOil had successfully recovered 43.5 kg of gold (current market worth RM 5.655 million) after processing 187,255 tons of alluvial which contain gold dust and fragments. Back then at 2012, Minarco Mine Consult had a site study and estimated around 4.02 tons of gold in the alluvial. However, a further study conducted by Professor Li Sezhuan of Champmark Sdn Bhd had indicated that the site might contain an estimated 30 tons of both indicated and inferred gold reserve (Worth RM 3.9 billion at RM 130,000 per kg) - Source (The Star - BornOil look for Gold in Pahang)
Currently, BornOil is operating in area 4-1, whilst another 6 more gold mining sites will be operation in the coming days once the green light is given by the authorities.
Whilst the Gold Rush had been the most interesting and exciting development in BornOil, it's longest operation asset - Sugar Bun, will be looking for a greater expansion in the Johor, Sabah and Indonesia. BornOil appointed franchisor SB Franchise Management Sdn Bhd had awarded an exclusivity to Indonesian firm PT Mitra Adidaya Perkasa to operate Sugar Bun restaurant in Jakarta, Medan and West Kalimantan which will see 20 new outlets to be set up by 2018. The first outlet will be phased in Ayani Megamall, the biggest shopping mall in Pontianak, West Kalimantan.
To further spice up the whole prospect in BornOil, the involvement in downstream Oil and Gas which focuses in bio diesel storage tank facilities had also kick out with a contract secured from Shell Timur Sdn Bhd for the engineering, procurement, construction and commissioning of 2 palm oil methyl ethylene bio diesel storage tank facilities in Kuala Baram, Miri and Labuan. With the government initiative to support a bio diesel roll out plan in the whole Malaysia in 2015, BornOil will be seeing more contracts in this division in the coming days ahead.
Current Catalyst
To fully kick start all the planning and to put them into work, BornOil estimated a need to raise a total of RM 35.5 million through a 20% private placement earlier in July 2014. The RM 35.5 million raised will see an allocation of RM 10million for new mining plant and equipment, RM 5million for gold exploration activities, RM 5million for new fast food central processing plant, RM 4.63million being PAR value of RM 0.10 for 46,248,000 new shares from private placement, while the rest will be used for repayment of hire purchase and expenses related to corporate exercise.
To raise RM 35.5 million from a 20% private placement, or 46,248,000 shares, the price for the private placement must be above RM 0.7675 in order to reflect the proceed.
Calculation
RM 35,500,000 / 46,248,920 shares = RM 0.7675 / share
However, while the private placement had been fixed at RM 0.56 per share in 25th September 2014, raising approximately RM 26 million, BornOil current ongoing gold recovery in Merapoh will had saw a further convincing result that will be looking to spiral the company further.
BornOil will be looking to recover at least 250 kg of gold in the end of 2014 in the current operation. which will be worth RM 32.5 million.
I believe BornOil will be an interesting counter to be looked upon in the coming days. With the huge potential into tapping a huge reserve of gold amounting to 30 tons which is worth RM 3.9 billion, a skeptical 50% slash cut will still put the figure at RM 1.95 billion worth of gold to be recovered. Currently trading at a 30% discount from it's NTA at RM 0.95, BornOil will be a shining leopard in the coming days.
In summary, Bornoil will be good for a long term outlook based on
- Potential tapping into 30 ton of gold reserve worth RM 3.9 billion
- Fast food arm - Sugar Bun, expansion into higher populated area such as Indonesia
- Involved in the downstream sector of the Oil and Gas, focusing in Bio Diesel tank storage which will see great prospect in 2015 once government open up whole Malaysia for Bio Diesel program
- Already secured several contracts from Shell for the engineering, procurement, operation and commissioning of the Bio Diesel storage tank in Kuala Baram, Miri and Labuan.
- Trading at 30% discount from NTA of RM 0.95
Place in your cards? You decide.
Bone's short term TP : RM 0.75
Reference
- The Star
- The Borneo Post
- The Edge Malaysia
Cheers and have a nice day
Regards,
Bone
http://bonescythe.blogspot.com
Oct 2, 2014
Borneo Oil Berhad (Bornoil - 7036) was used to be known as Sugar Bun Corporation Berhad back then before 2007. However, due to the company new direction in it's involvement in the downstream oil and gas, renewable energy and mining, Sugar Bun Corporation Berhad had since then changed to Borneo Oil Berhad to reflect the diversified business in the group. Currently under Bornoil's active business portfolio includes
- Gold Mining Division
- Fast Food Franchise Division (Sugar Bun)
- Oil and Gas Division
- Property & Management Division
Let's have a quick look at the latest price chart of BornOil.
BornOil had been consolidating at the range of RM 0.65 for a period of 9 months. The consolidation had saw a series of saturation and will be looking to see a new burst of volume visiting Bornoil after a corporate exercise which had saw a PAR value reduction of RM 0.90 from RM 1.00 which is effective on 25th September 2014. Bornoil will be looking to trend higher in the coming days ahead, and will be on a positive mark in breaking RM 0.70 convincingly.
While the mother share had been looking promising, BornOil-WB will be an even attractive target after being traded with a 6.8% discount from the mother share, as exercise price is being revised to RM 0.10, putting BornOil-WB into a huge discount. At the current closing price of BornOil at RM 0.66 as of 1st October 2014, BornOil-WB should be trading at RM 0.56 after exercise price had been revised to RM 0.10. To put it more interesting, the expiry of the warrant is slated at 28th February 2018, putting it more attractive to be trading at a premium instead of a discount.BornOil - Gold Rush
BornOil had finally found it's way to a golden land after securing a gold mining contract from Champmark Sdn Bhd for gold prospecting and mining on a 400 acre area for 5 years and renewable option of another 5 years in Merapoh, Mukim Batu Yon in Lipis, Pahang. To recap back, MMC Corp Berhad had leased the mining land from Perbadanan Kemajuan Negeri Pahang which in turn contracted it to Champmark Sdn Bhd for mineral prospecting and mining.
In June 2014, BornOil had successfully recovered 43.5 kg of gold (current market worth RM 5.655 million) after processing 187,255 tons of alluvial which contain gold dust and fragments. Back then at 2012, Minarco Mine Consult had a site study and estimated around 4.02 tons of gold in the alluvial. However, a further study conducted by Professor Li Sezhuan of Champmark Sdn Bhd had indicated that the site might contain an estimated 30 tons of both indicated and inferred gold reserve (Worth RM 3.9 billion at RM 130,000 per kg) - Source (The Star - BornOil look for Gold in Pahang)Currently, BornOil is operating in area 4-1, whilst another 6 more gold mining sites will be operation in the coming days once the green light is given by the authorities.
Whilst the Gold Rush had been the most interesting and exciting development in BornOil, it's longest operation asset - Sugar Bun, will be looking for a greater expansion in the Johor, Sabah and Indonesia. BornOil appointed franchisor SB Franchise Management Sdn Bhd had awarded an exclusivity to Indonesian firm PT Mitra Adidaya Perkasa to operate Sugar Bun restaurant in Jakarta, Medan and West Kalimantan which will see 20 new outlets to be set up by 2018. The first outlet will be phased in Ayani Megamall, the biggest shopping mall in Pontianak, West Kalimantan.To further spice up the whole prospect in BornOil, the involvement in downstream Oil and Gas which focuses in bio diesel storage tank facilities had also kick out with a contract secured from Shell Timur Sdn Bhd for the engineering, procurement, construction and commissioning of 2 palm oil methyl ethylene bio diesel storage tank facilities in Kuala Baram, Miri and Labuan. With the government initiative to support a bio diesel roll out plan in the whole Malaysia in 2015, BornOil will be seeing more contracts in this division in the coming days ahead.
Current Catalyst
To fully kick start all the planning and to put them into work, BornOil estimated a need to raise a total of RM 35.5 million through a 20% private placement earlier in July 2014. The RM 35.5 million raised will see an allocation of RM 10million for new mining plant and equipment, RM 5million for gold exploration activities, RM 5million for new fast food central processing plant, RM 4.63million being PAR value of RM 0.10 for 46,248,000 new shares from private placement, while the rest will be used for repayment of hire purchase and expenses related to corporate exercise.
To raise RM 35.5 million from a 20% private placement, or 46,248,000 shares, the price for the private placement must be above RM 0.7675 in order to reflect the proceed.
Calculation
RM 35,500,000 / 46,248,920 shares = RM 0.7675 / share
However, while the private placement had been fixed at RM 0.56 per share in 25th September 2014, raising approximately RM 26 million, BornOil current ongoing gold recovery in Merapoh will had saw a further convincing result that will be looking to spiral the company further.
BornOil will be looking to recover at least 250 kg of gold in the end of 2014 in the current operation. which will be worth RM 32.5 million.
I believe BornOil will be an interesting counter to be looked upon in the coming days. With the huge potential into tapping a huge reserve of gold amounting to 30 tons which is worth RM 3.9 billion, a skeptical 50% slash cut will still put the figure at RM 1.95 billion worth of gold to be recovered. Currently trading at a 30% discount from it's NTA at RM 0.95, BornOil will be a shining leopard in the coming days.
In summary, Bornoil will be good for a long term outlook based on
- Potential tapping into 30 ton of gold reserve worth RM 3.9 billion
- Fast food arm - Sugar Bun, expansion into higher populated area such as Indonesia
- Involved in the downstream sector of the Oil and Gas, focusing in Bio Diesel tank storage which will see great prospect in 2015 once government open up whole Malaysia for Bio Diesel program
- Already secured several contracts from Shell for the engineering, procurement, operation and commissioning of the Bio Diesel storage tank in Kuala Baram, Miri and Labuan.
- Trading at 30% discount from NTA of RM 0.95
Place in your cards? You decide.
Bone's short term TP : RM 0.75
Reference
- The Star
- The Borneo Post
- The Edge Malaysia
Cheers and have a nice day
Regards,
Bone
http://bonescythe.blogspot.com
