Morien Resources has a market capitalization under $14 million but doesn’t act much like a junior resource company. Instead of issuing shares to raise money for projects, the cash-rich royalty firm is buying back stock as its partners build out the assets.
Morien owns royalties on the Donkin coal mine in Cape Breton, Nova Scotia, and the Black Point granite deposit in Guysborough County, Nova Scotia.
CEO John Budreski expects the fully permitted Donkin, owned by a subsidiary of the private Cline Group, to go into production later this year. That would trigger both milestone payments to Morien and royalties.
“We have cash in the bank, about $2.5 million in the bank, and we expect that the coal mine goes into production this year, and we start to receive royalty cheques from that coal mine,” he said.
There’s a possibility that volatile coal export markets could delay the startup of the mine, Budreski said, but the owner is bringing in mining equipment and hiring employees.
The Black Point aggregate deposit, owned by NYSE-listed Vulcan Materials, is in the final stages of environmental permitting. Budreski expects a government decision before the end of June.
Donkin has a 25-year mine life and Black Point, which is expected to go into production in 2019, has a 50-year mine life.
“We expect to be receiving royalty cheques for decades to come,” Budreski says.
Morien Resources is presenting at the Subscriber Investment Summit in Toronto on March 5. This is not investment advice.