{"id":47,"date":"2018-02-17T23:38:22","date_gmt":"2018-02-17T23:38:22","guid":{"rendered":"http:\/\/www.cheapertrader.com\/?p=47"},"modified":"2018-02-22T11:56:54","modified_gmt":"2018-02-22T11:56:54","slug":"ncondezi-energy-limited-potential","status":"publish","type":"post","link":"https:\/\/www.cheapertrader.com\/index.php\/2018\/02\/17\/ncondezi-energy-limited-potential\/","title":{"rendered":"Ncondezi Energy Limited – a stock that could explode"},"content":{"rendered":"

Ncondezi Energy Limited (LON:NCCL), the coal mining company based in Mozambique shot up by 11% yesterday.\u00a0 But could the stock be a multi-bagger?<\/p>\n

Ncondezie Energy appears to be riding a wave of positive sentiment. The company recently found development partners in General Electric (GE) and China Machinery Energy Corporation (CMEC), and have been making good progress in making the coal mine project a reality. It looks like General Electric and CMEC have a history of successfully working together in the past (e.g in Nigeria<\/a> ) in bringing mining projects to fruition and investors are feeling very positive about the company’s prospects as a result.<\/p>\n

The partners were initially granted a period of exclusivity until 30 April 2018 to develop and conclude a Joint Development Agreement(JDA). However, in Dec 2017, an update was provided by NEL on the progress towards confirming a JDA. Although good progress is being made, the expected finalization date has now been pushed back until July 2018. However, if confirmation of an agreement can be given in the coming months, the prospects of the company will become increasingly attractive.<\/p>\n

At the moment, the company only has a market cap ~\u00a313 million. Many may view this as fairly low considering the current prospects of delivering a major integrated thermal coal mine & power plant. I suspect this market cap will increase sharply in the event the JDA is agreed. However, investors must keep in mind that the creation of a power plant is no small feat, and that the plant is likely to have costs of up to $1 billion. How will this be funded?<\/p>\n

The company does not have a lot of cash. In terms of cash, the company raised \u00a3750,000 in equity at the end of last year, and confirmed that this should cover corporate costs up until Aug 2018. But who will fund the actual creation of the power plant?<\/p>\n

Will it be funded by more equity (diluting shareholders in the process), debt? Or will there be a joint profit sharing agreement with partners? The answers to these questions will be more evident with time. In terms of Ncondezi Energy as a long term pick, I think the company has a fairly low market cap at the moment. Of course, as with many mining projects, things could go sour, but so far, good progress has been made partner wise and I would probably hold the share for now as there could be significant upside if things do fall into place. And by significant upside, I mean multiples of the current share price!<\/p>\n

As always though, please do your own research; the opinions above are only my personal views.<\/p>\n","protected":false},"excerpt":{"rendered":"

Ncondezi Energy Limited (LON:NCCL), the coal mining company based in Mozambique shot up by 11% yesterday.\u00a0 But could the stock be a multi-bagger? Ncondezie Energy appears to be riding a wave of positive sentiment. The company recently found development partners in General Electric (GE) and China Machinery Energy Corporation (CMEC), and have been making good […]<\/p>\n","protected":false},"author":1,"featured_media":50,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"offerexpiration":[],"class_list":["post-47","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk-companies"],"_links":{"self":[{"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/posts\/47","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/comments?post=47"}],"version-history":[{"count":8,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/posts\/47\/revisions"}],"predecessor-version":[{"id":109,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/posts\/47\/revisions\/109"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/media\/50"}],"wp:attachment":[{"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/media?parent=47"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/categories?post=47"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/tags?post=47"},{"taxonomy":"offerexpiration","embeddable":true,"href":"https:\/\/www.cheapertrader.com\/index.php\/wp-json\/wp\/v2\/offerexpiration?post=47"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}