Resources Prima

For RTO, the Purchase Consideration was reduced from S$400 million to S$265 million. The issue price for each Consideration Share was reduced from S$0.25 to S$0.20. Current price? Only 13.9 cents. Why like that?

We attended a recent presentation by the CEO. Look out for our report!

Article: www.nextinsight.net/index.php/story-arch...880-resources-prima-

Joes wrote: For RTO, the Purchase Consideration was reduced from S$400 million to S$265 million. The issue price for each Consideration Share was reduced from S$0.25 to S$0.20. Current price? Only 13.9 cents. Why like that?

--The reason is, as far back as Sept 2012, the RTO consideration was set at S$400m. Back then, the price of coal was much higher than today. Coal prices will remain weak in the near term. Any hint of a sustained recovery in price will certainly have a direct impact on the stock price of Resources Prima (now 15.9 cents). There are other catalysts which are more near-term, including a profitable quarter (in the absence of one-offs) + the award of the 2nd permit for the remaining concession area.

How can this make sense? To short, someone borrows just 1,000 shares (market value about $135) and pays a minimum fee of $50 to the shareholder?

UOB Kay Hian is expecting Resources Prima to achieve US$16 m for the current FY which started on April 1.



In the more immediate time frame (ie by end-next month, June), Resources Prima share price (13.8 cents last week) could run up with the award of the 2nd permit for mining its concession.