MODUN Resources continues to focus on sourcing a local partner to help fund development of the Nuurst Thermal Coal Project. The ASX-listed company says that discussions with a number of potential partners remain ongoing.
In addition, the company's Mongolian representatives have continued to hold discussions with the Mongolian Government to progress completion of a previously announced offtake agreement, however the timing for the government to sign the agreement remains uncertain.
In June Modun completed a share placement to a sophisticated investor raising Aus$200,000. In addition, at a general meeting on June 10, shareholders approved a placement to family interests associated with company director and chairman Hugh Warner, raising another $200,000 via the issue of shares.
Despite the success Modun has achieved in generating a 478 million tonne JORC 2012 compliant coal mineral resource at Nuurst it has not been able to convert this asset into growth in the company's share price nor has it been able to bring the project into production. The resource comprises 326 million measured tonnes, 104 million indicated tonnes and 48 million inferred tonnes.
As a consequence, chairman Hugh Warner says the company has been considering other opportunities available to it to bring value to its shareholders. The consideration of these opportunities has led the directors to develop three alternative strategies:
- Continue to explore and focus on the Nuurst project solely; or
- Keep the Nuurst project and continue to explore and develop that project while also looking at and acting on opportunities to acquire additional assets, and develop both of these assets side by side; or
- Sell the Nuurst project and focus on identifying a new asset that the directors consider could bring value to shareholders.
The company has been investigating the opportunity to diversify into the technology sector via the acquisition of a technology business. The company has been advised by the ASX that if it does pursue this strategy, then it will most likely need to re-comply with Chapters 1 and 2 of the Listing rules. Shareholder approval will be required to sell the Nuurst project.
Hugh Warner says, "Clearly we could maintain our focus on the Nuurst project and not suffer any compliance burdens but history has demonstrated that this is not a value creating strategy and so it is not our preferred course of action."
Nuurst encompasses a 2497 hectare mining licence area, is 120km south of Ulaanbaatar and 6km from existing rail infrastructure which links directly into China.