Thursday, July 03, 2014

Resurgere Mines and Minerals: Location of Mines
CMP: Rs.3.22 (BSE in Lower Circuit) and Rs.2.70 (NSE in Upper Circuit)
Inference: Strong Buy 
Target: Rs.10 plus
Company Overview:
Resurgere Mines & Minerals India Limited is a Public Limited Company engaged in the business of extraction, processing & sale of Ore and exploration & development of mining assets. Presently the Company is enjoying long term raising and purchasing rights for Bauxite Mine in the State of Maharashtra and mining rights for Soapstone in the State of Rajasthan.

The Company has also 99.98 % equity holding in Shree Warana Minerals (India) Pvt. Ltd. having another bauxite mine in the State of Maharashtra through its wholly owned subsidiary i.e. Warana Minerals Private Limited. 

The mining is already taking place in Soapstone Mine in Dhelana, Rajasthan. In case of some of the mines, the company had been given allotment, but the approvals in the form of environmental and forest clearances are yet to be obtained. This is normal, for commencement of any mining activity. If the clearances are given fast by the current NDA government, then mining activities, can start at any time, after the monsoons.

Initial Mine Development Expenses:
In open pit mining operations, removal of initial overburden and other barren waste materials are necessary for economical extraction of ore. The process of mining overburden and waste materials is referred to as stripping. The management has decided to amortise such expense in 60 months from the date of incurrance of the expenditure at Maharajpur Mines.
Expenses on initial development at “Tatibha Mines” continue being amortized over a period of 5 years from the month in which the expenditure is incurred as estimated by the management.

Subsequent Mine Development Expense:
During FY13, the Company during the course of excavation activity at the Nuagaon mine situated in the State of Orissa has found soft ore (blue dust) in the said mine. Soft Ore has significantly lesser economic value and the company after considering all commercial implications has decided to discontinue excavation activity on the said site within the mine. The company has already started development of an alternate site immediately adjacent to its existing mine site. The management has decided to amortise the expense in 18 months from the date of incurrance of the expenditure. 

Face value of equity shares has been consolidated from Re.1 to Rs.10 each with effect from 15th June 2012. (Shareholder’s approval was taken by way of postal ballot, of which the results were declared on 20th March, 2012. Corporate action with stock exchange was done with effect from 15th June, 2012, the record date)

Subsidiary Companies:
As on March 31, 2013, it has six subsidiary companies, namely:
1. M/s Warana Minerals Private Limited
2. M/s Shri Warana Minerals (India) Private Limited
3. Resurgere International FZE
4. M/s Resurgere Sponge Iron Limited
5. M/s Resurgere Ferro Alloys Limited
6. M/s Resurgere Industries Limited
The above companies are wholly owned subsidiaries of the company. M/s Resurgere Sponge Iron Limited and M/s Resurgere Ferro Alloys Limited were incorporated on 1st March, 2011 and the M/s Resurgere Industries Limited was incorporated on 10th March, 2011. In addition to the above, the company has one limited liability partnership namely “Resurgere Coal India LLP” with a 70%stake. 

Please Click on the Photo to get an Enlarged View

a. M/S Exfin Shipping (India) - Partnership Frim
b. Victory Sponge Private Limited -Company
c. Eminent Steel private Limited -Company
d. Runwell Steel Private Limited -Company
e. Spear petroleum Private Limited -Company

Therefore, the shareholders are sitting on a "Huge Pile Of Wealth"--waiting to be unlocked and distributed. Am I right?

There are talks that Narendra Modi government will form a single window to hasten such clearances. The NDA government has already made arrangements for online submission of papers, to get the clearances.

It is surprising to see the shares of a company having so many MINES and whose IPO was placed in the price band of Rs.263--272, in August, 2008, is trading below its face value of Rs.10; and which perhaps can happen in India only, because here most investors are either not well informed about the markets or have no idea, about the scrip they are purchasing.  When I was asking all to buy A2Z Maintenance Engineering Services Ltd at Rs.11-12, many were reluctant, to touch it with a stick, and today I see, there are more than 13 lakh bids at Rs.20.90, as the scrip moves from one Upper Circuits to another. What do you call Indian Markets? Immature?

Also, have you seen, a stock, hitting the UPPER CIRCUITS in one EXCHANGE (NSE) and the LOWER CIRCUITS in another (BSE), on the SAME DAY (and at the same time) in India. Our Stock Exchange Regulators are really, world-class, who can create such miracles, unparalleled in the world.....Huh!! Another thing is that in one exchange the circuit limit for Resurgere Mines and Minerals Ltd is 4.72% and in another it is 3.85%--don't know which fertile brains are regulating such activities in BSE and NSE. Do they deserve Nobel Prize in Economics? Think!! 
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