Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Waratah Resources Aims For Cash Flows From Commodities Trading

Waratah Resources (ASX:WGO) has ambitions to fashion a global commodities trading house with emerging cash flows after it made a start to trading Indonesian sourced thermal coal in 2014.

An important piece of the strategy was this week's announcement of an agreement with Amanie Holdings to form a joint venture for the purpose of funding its commodity trading business.

Coal trading is poised to step up as the Middle East markets are added to global trading from its contacts base with over 50 years commodity trading experience with BHP and BlueScope Steel.

This business will source, manage and trade commodities from Indonesia and other countries to large scale end users throughout Asia and the Middle East.

Other key pieces are working on three new mineral licences in Gabon to expand holdings in the country and completing Aero Mag surveys over these licence areas.

Waratah is also working towards a trade sale and/or an Initial Public Offering through a special purpose vehicle for the African assets on the AIM market in London.

To that end due diligence is underway to determine if a part sale of the Gabon assets could be achieved via a London stock exchange listing in the second or third quarter of 2015.

A program of exploration activities for the coming months is planned subject to successful capital raising.

Amanie Holdings

On 31st March, Waratah announced that it had entered into a non-binding Letter of Intent with Amanie Holdings to form a Joint Venture for the purpose of funding its commodity trading business.

The intention is for Amanie to assist in the provision of the necessary finance and other commercial relationships to enable Waratah to rapidly expand its trading business.

Amanie is one of the global leaders in Shariah advisory and consultancy services, setting the standards in terms of performance, transparency and long term commitment to its business and clients.

Commodity Trading: Indonesian Thermal Coal

The division has progressed toward the development of a logistics and supply chain from mine to end user.

In May 2014 Waratah announced that it had assisted in a 50,000 tonne export cargo of thermal coal from South Kalimantan, Indonesia bound for Shanghai, China.

In September 2014 9,000 tonnes of thermal coal was dispatched from South Kalimantan to an International coal trading company.

Waratah is planning to expand its activities and use its growing trading experience to trade thermal and coking coal sourced from Indonesia into the Middle East.

Thermal Coal - Customer and Supply Development

Coal Quality Coal is typically high quality and in demand as blending material around 5500-7000kcal/kg, 14% ash, 1% Sulphur. It is similar to premium Newcastle thermal coal. It has a low production cost.

Transactional Risk Management

Payment terms are in $US - no currency risk with tiered payments against independent laboratory testing.

Final payment is after Government issued export documentation.

Waratah intends to build an experienced on-site team with daily inspection of coal source and stockpile quality and continuous inspection of barge loading.

African Division

The Company has been exploring the options for generation of optimal shareholder value from the African assets.

These include establishing a special purpose vehicle in the UK to hold the Gabon assets and work towards a trade sale and/or IPO on the London Alternative Investment Market.

To date, Corporate Advisory and PR firm Blytheweigh in London have begun the process of appointing specialist advisers in the following fields of accountants, lawyers, NOMADS and investment bank /brokers.

The Company has appointed Clive Sinclair-Poulton as Advisor to the African Division.

The African division was established to support the progression and development of Waratah's flagship asset in Gabon, the Mekambo-Est Iron Ore Project.

Gabon Mines Ministry has allocated a further three licences to the Company. These are located in strategic locations within Gabon, in different minerals, encompassing Nickel, Gold, Copper and Rare Earths.

Exploration work was taken out in the mid 20th century by the French Government and remains highly prospective for different metals. Before the break-up of the tectonic plates - Gabon was attached to north eastern Brazil. This resulted in similar rock types, structures and formations with similarities for iron ore, gold and copper.

Mekambo-Est Iron Ore Project Mekambo licence was granted in 2011 after surveys and GPS mapping confirmed the licence area was located wholly within the boundary of The Republic of Gabon.

The licence covers an area of over 1224km2. Extensive work has been completed on site and the surrounding area.

Diamond drilling was first undertaken at Mekambo-Est in January 2012 using two of Waratah's portable drill rigs.

To date, the Company has drilled 34 holes for a total depth of 1441 metres. The drill core recovery has been good with the interception of high grade iron ore.

The strike at Mekambo-Est is estimated to be 37 kilometres long and the Mekambo ridge is 60 metres higher than the regional average and varies from 10 to 200 metres in width.


Waratah is distinguished from other small-cap resource companies with a two prong strategy which looks to deliver both cash flow and profit growth in commodities trading, while providing investors with opportunities to take advantage of long term demand forecasts.

As well, Waratah continues to seek capital and partnerships to develop its resource projects.

This dual track strategy targets sustained shareholder value and access to potential opportunities within the commodities sector.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.