Ann: March 2022 Quarterly Report, page-21

I want to do some basic math here, assimple as possible to see where we stand financially at the endof this quarter.

Equity sales of produced coal of 3,527tones.
$315 per ton sale price. Revenue for the quarter would be315 x 3.527 = $1,111M
Cost of $84 per ton, total profit perton of $231.

231 x 3.527 gives us total EBITDA for the quarterof $814.7M.
Depreciation and amortisation is $70M per quarter onaverage based on past reports (high end of the scale)
EBIT wouldbe $744.7M
Apply 30% income tax and we get a net income of$521.29M for the quarter.
For reference, net income for the halfyear, last two quarters combined, was $340M.

Coal prices forthe last quarter are expected to average A$430 per ton.
On theconservative end we should achieve at least $550M net revenue for thelast qtr of the year.
521.29 + 340 + 550 = $1,411.29M of netrevenue.
Market cap as of today is 4.64B.
4.64 divided by 1.411gives us a current PE ratio of 3.3
This makes WHC extremely cheapat the current market cap considering the coal industry averagePE is around 15. WHCs PE ratio peaked at 11 during the 2019 commodityprice cycle.

With all this in mind, lets see what the likelyfull year dividend will be based on WHCs payout policy of 20-50% ofnet income. The full year dividend calculations are as follows.
1.411x 0.2 = 28.2 cents per share
1.411 x 0.5 = 70.5 cents per share

This means that the full year dividendyield for WHC in percentages, based on the current SP of $4.80, wouldbe between 4.2% and 14.7%.

If we take off the 8 cents already paid forthe half year we are left with a possible dividend payment inAugust/September between 20 and 62 cents per share. Management willlikely pay shareholders towards the higher end of this scale becausethere is simply too much cash and nothing to do with it. Winchesterand Vickery are not ready for a major cash injection for development.

Another key is the net tangible assetsper share of the company. This gives a good look at the assets theyhold, which we have claim to as shareholders on every share that webuy. Total equity at the end of the lasthalf was $3,052.713M

Total shares outstanding is now atalmost exactly 1 billion shares after 16.8 million shares wererecently bought back.

If we divide these two we get NTA of$3.05 per share. Since the half year announcement theremaining $400M of debt has beenpaid off., WHC is now completely debtfree. Cash on hand has also increased by $54M since the last report.

Accompanying our quarter report is thereserves update for Winchester. Reserves have increased considerablywhich will be taken into account when calculating the totalshareholder equity in Aug/Sept when the full year report is released.But even without taking the increased reserves into account we stillhave a NTA per share of $3.60 as it stands today. This gives us astrong margin of safety.

Based on all 3 basic metrics, WHCpresents a compelling investment at todays SP. Dividend yield, PE andNTA are all very strong compared to the broader market and WHC'shistoric performance. With a SP well below historic peaks that gavemuch lower coal prices, we will likely see all time high SP movement to accompany all time high coal prices.
DYOR