Oil and Iron Ore bottom fishing opportunities?

Jack_Aster

Newbie
7 0
Hello Everyone,

been a while since I posted on here. Was wondering what a few of you thought about these two small cap stocks. One is an oil play based in Mississippi and Louisiana and the other is an Iron ore company in Canada that's restarting an old Iron ore mine. Due Diligences below from their financial reports:

The Canadian tickers are much more active than the US tickers.


Symbol US: NHRIF CDN:NFE
Price: $0.02
Shares Outstanding: 95,727,875 common shares (recent placement included)
Insider Holdings: Just under 25% as per www.sedi.ca
March 2015 Presentation on their website: http://www.northernironcorp.com/

NFE Financials(Most Recent Out Ending June 30th 2014)

Cash: $829,258 ($952,400 raised in December at $0.05c a share, 3 times the current price)
Receivable: $84,785
Prepaid Expenses: $4,385
Deposits: $205,264
Intangible Assets: $145
Property and Equipment: $350,740
Exploration Assets: $9,573,315
Total Assets: $11,047,892 (Without PP funds)

Liabilities/Debt: $59,270(All Payables)

Quarterly cash burn: $188,313 for 3 months or $563,953 after 9 months. Roughly $200k per quarter

- $952,400 raised at 5c a share by one individual who is now a director/insider
- More financing offered to get this NFE’s Iron Ore project into production
- Company has three contracts signed that's slated for production deliverance in 2016

News Highlight:
Basil Botha, president and chief executive officer of Northern Iron, said: "The investment agreement entered into today is significant for the following reasons:

"The private placement is being done at a 152-per-cent premium to the 20-day volume-weighted average price of Northern Iron shares.
"The initial tranche of capital from the private placement, when completed, is expected to secure Northern Iron's short-term working capital needs.
"The $30.2-million in further capital provided for in the underlying agreements to be entered into on closing is expected to bring the project to the completion of the bankable feasibility study stage.
"These transactions provide Northern Iron with a clear path forward at a time when financing for juniors is extremely difficult.
"Northern Iron is now aligned with Danieli Centro Metallics, one of the world's leading equipment suppliers to the steel industry (see press release dated May 7, 2014, regarding co-operation agreement with Danieli), and with OMC, a firm that has access to major Chinese steel producers.
"Globally, steel mills are looking for a reliable source of value-added raw materials that can assist in the production of quality and speciality steels, while reducing emissions, being more energy efficient and producing less waste. Canadian HBI [hot briquetted iron] produced in Northern Ontario can accomplish this and the transportation infrastructure is in place to make it happen."





Symbol US: KFGRF CDN: KFG
Price: $0.08
Common Shares: 50,581,144
Insider Holdings: 16%

Financials ending October 31st 2014:
Assets
Cash: $ 1,836,298
Receivables: $403,296
Prepaid Expenses: $32,380
Reclamation Bond: $20,000
Property & Equipment: $1,222,247
Total Assets: $3,514,221
Liabilities
Accounts Payable: $726,247
Deposits from Co-Owners: $38,373
Total Liabilities: $764,620
Management Discussion and Analysis Highlights
The Company is a small independent energy company engaged in the development of onshore oil and gas reserves with activities concentrated in Concordia and Catahoula Parishes, Louisiana, Adams, Jefferson, and Wilkinson Counties, Mississippi and Comanche County, Kansas.

Overall the Company has recovered from giving up 25% of its interested in the Fayette Field wells at payout. Currently, with the MacNeil wells and Craig wells at payout, revenues are on a growth pattern again. The Company was able to grow just utilizing cash flow. Several new projects are in the pipeline and the Craig #3 well will payout in the next few months increasing that revenue stream. KFG will have no problems financing growth through its internal cash flow throughout the remainder of its fiscal year ending April 30, 2015. In addition, the Barnum #2 well is on production as of mid September 2014. The Craig #4 well was recently completed as a dryhole. With the Company’s current cash position and a quick ratio of 2.5, theCompany is in a good position to weather the current collapse in oil prices from about $84 in October 2014 to around $55 - $60/bbl at this writing and will still show positive cashflow. The Company’s operating cost per bbl is currently $18.85/bbl.

The Company reported net income of $611,881 for the six months ended October 31, 2014 compared to net income of $238,365 for the six months ended October 31, 2013, with the increase in net income a result less operating expenses plus better prices for oil and new oil from the Craig and McNeil bases due to increased working interest in the wells as well as total overhead charges remaining virtually unchanged.
The Company reported net income of $151,781 for the three months ended October 31, 2014 compared to net income of $124,840 for the three months ended October 31, 2013, with the increase in net income a result less operating expenses plus new oil from the Craig and McNeil bases due to increased working interest in the wells.
During the quarter ended October 31, 2014, the Barnum #2 well was completed producing in excess of 100 BOPD. The Company has a 9% working interest in that well jumping to 16% at payout. The Company plans to offset that well in February 2015 as well as drill two new prospects. Gross income from oil sales increased 15% in spite of declining prices.
Outlook
Production at Fayette is stable and has started a slow decline. With the Dale lease back on production and new production coming off the Craig and Parker leases, KFG will have adequate internal cash flow to develop existing leases as well as support several new prospects in the coming months. Unless the price of oil collapses, the Company will generate sufficient capital to fund its requirements throughout 2014 internally. The Company’s outlook for the next six months is positive. With a current ratio of 2.97, KFG is well positioned to proper during this period of much lower oil prices. At this writing, no projects will be put off or delayed. The Company anticipates its 2015 drilling program starting in February 2015.
Share Capital
The total number of shares outstanding as at October 31, 2014 and December 22, 2014, is 50,584,144. As of October 31, 2014 and December 22, 2014, there were no stock options or warrants outstanding.
 
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