Atrum Coal’s (ATU) Elan Project in Alberta, Canada is a rare undeveloped, high quality hard coking coal (HCC) asset, with multi-mine potential. Elan has a current resource of 298Mt with an exploration target of an additional 210-900Mt. Elan dwarfs both the tenement holding and resource potential of Riversdale Resource’s (public, unlisted) neighbouring Grassy Mountain project, which was recently the subject of an $804m takeover offer by Hancock Prospecting. The Riversdale offer of $2.70/sh implies an EV/ Resource value of ~$3.62/t, 7x higher than ATU at ~$0.52/t. A 20,000m drilling program will commence in June 2019 aimed at defining multiple open pit areas. A Resource update is due in Q4 along with a Scoping Study on the first proposed mine at Elan South. Argonaut re-initiates coverage with a Speculative Buy recommendation and $0.92/sh target price.

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