At the time of the last upgrade the companies projection for coal price for the new year was substancailly lower. Now the importance of the price staying inflated for a much longer period should be significant for the company as they have said the price they receive is based on a 3 month average. (platts HCC spot price) This should mean they are in a good position to upgrade earnings on Monday or at latest the 6 monthly report due out in Feb. Last guidance was based on $268 USD a tonne and 73 kiwi $. Last 3 month ave is $370 USD and 68 kiwi $ Now more importantly the current price of $435 USD will ensure, even if the price comes down somewhat, that the next 3 month average will still be exceptionally high and the kiwi $ is at 65. I run a few numbers and put them on $125m EBITDA should the price ave $300 for the year this takes into account hedging position and kiwi $ at 68. A $350 Ave and 68 kiwi $ ave, which is less than both are now, I put them on EBITDA OF $160M. BRL have very consistent cost of production so you will see substancailly higher cashflow growth if the price of product remains high. By FY 2022 they could have 50% of the current company market cap ($133m) in cash. I am surprised at current market value so change my sentiment from hold to buy as given the fundamentals and assets this should be trading 50% higher.
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