Could this small cap with a lot of coal gradually become a lot larger?

Do you still believe exciting investment stories?

I have to say; I don't, on the whole. The same thing that would've excited me in my 20s and 30s arouses cynical suspicion in my late 40s.

So it was in this happily optimistic and positive frame of mind that I decided to have a look at South African coal mine owner Strategic Natural Resources (LSE: SNRP). This decision followed coverage of the firm by private investor Paul Rutherford who organises groups of shareholders to enable better two-way communications with various companies. Paul also co-founded ishareinfo.tv.

And I have to say, I couldn't find a lot wrong with it, so decided to buy a few shares. The main reason is the company owns 74% of a huge undeveloped coal mine in South Africa with around 200 million tonnes of coal now and more than 95% of the property yet to drill in an area of over 700 square miles in the Eastern Cape province. In return for this, the company's market capitalisation is £37.8m at the current share price of 22¼p.

Before I go any further, though, this isn't a share for the proverbial widows and orphans, or for income seekers for that matter. A small AIM-listed company with an African-based mine is a case of "heard quite enough" for many investors. And no-one can blame investors who've been around the block a few times for such an attitude.

The plan comes together

But if you're still reading at this point, then the basic investment case is well explained by the company's Communications Director and former CEO, Jeremy Metcalfe, in a video interview with Proactive Investors last week. He paints a picture of everything seemingly coming together for the company with the first shipments of coal expected in June/July of this year, saying: "We are funded. We can go for it. This is something I know shareholders have been waiting for and we're not going to disappoint them."

The funding he's referring to is an injection of £8.2m from Richardsons Capital for a near 30% stake announced on 7 March.

He acknowledges the company's future need for further cash as production increases, which is always the investor's fear in such situations, but believes future funding can come from bank debt. In order for this to…

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