What am I missing?, page-45

I phoned the company, and here’s what I understood:

The debt is around $50m. The $102m “Performance Guarantee Facility” is for mine rehabilitation for the Queensland government for when the mine eventually closes. RRP are paying interest on that and are rehabilitating the mine as they go, but if you want to be extremely conservative you can count it as debt.

Current life of mine is 10 years, but they are exploring their large 50km tenement.

Their estimates are fair, i.e. neither conservative nor based on ideal scenarios.

The CR is after the consolidation. So instead of 250m shares, it will be for 25m and probably on usual terms like 20% discount to vwap, so I figure maybe 80c if the s/p is $1 after 10:1 consolidation. So raising about $20m. This CR is just for compliance.

Valuation estimate: $45 margin x 2.3m tonnes (RRP’s share) gives $100m at PE of 4, 5, or 6, which is what coal miners get, gives you minimum of $400m m/c.

Risks: Coal price, government policy, exploration (faulting, dip variation, complex geology).

My impression: Seems legit and well run, based on one conversation.