sxp valuations, page-7

Don't get me wrong I realise SXP isn't a 'coal company'. The coal they would be seeking I realise would be extremely low value coal- stuff that probably wouldn't even go in your weber- I was just trying to put into perspective the amounts that were being discussed. Even if the basin does hold 30 Billion tonnes a HUGE if is where its located in the ground.

Strip ratios determine coal mining profitability (of course amongst others but it plays a big role). So if the stuffs deep- Open Cut is out of the question and I don't see any underground coal mines opening in outback South Aussie anytime soon. And if they're going to make $ out of any sort of coal then they have to mine the stuff obviously.

Then theres the reality of treating the cool which would require infrastructure and you can't ship coal hundreds of k's around the desert from separate deposits. Freight is hugely important to margins on bulk commodities- and surely this applies even more if the stuff has a low $ to ton ratio worth. I think max $1 or $2 could even be speculated on here- you would think probably in the cents per tonne. Domestically in the US poor thermal coal (power station fuel) sells for about $15-20AUD and the margin in that price is only a couple of dollars.

In terms of their 600MT JORC. Is it Reserves or resources? Because there's a big difference.

I'll stop there because it sounds like Im playing this down. As I said, seems like an interesting proposition.
Just wanted to add my 2c.

Who knows what will go on in the next few years. With the options out to 2012, maybe we'll be around to see.

Cheers