As we expected and hoped, Athabasca Minerals (ABM.V) announced two related pieces of excellent news today: First, the government has approved its closure plan for Susan Lake, meaning the regulator has signed off on the reclamation work the company has performed and proposed to close off the now-depleted site.
Second, and more importantly, the company has settled its lawsuit with Syncrude.
Recall that the parties were to be in court today, a prospect that typically concentrates the mind. So we thought they would settle just before that unpleasant experience and we were right on that score.
Why is this good news, apart from the removal of a potential liability? Because Athabasca is fast-becoming a potentially institutional-grade story, especially if and when it announces a financing plan to carry through with the development of the White Rabbit and later the Montney frac sand projects (not to mention other frac projects it may be working on). Plus we believe the emerging technology platform (Aggregates Marketing’s Rockchain, with $45 million in bids outstanding) could also attract serious investment interest, especially if spun-out. The company continues to consider this option.
The lawsuit, however, had prevented many bigger investors from picking up shares, as institutions often have blanket policies against investing when legal matters cloud the story.
The clouds have now parted and expect interest from institutional players now. We hope to hear a financing plan for White Rabbit soon and possibly news of a spin-out of Aggregates Marketing.
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