Target $18.72, page-6153

Hey Rick, Yes that is correct (EPS of ~$1 for FY) without factoring in development costs for Vick/Winch

We did the same calculations at $300, $250 and $200 but look where the coal price is now. Production boom from India and China was swift to take hold of large profits. We also saw booming accidents and fatalities from both countries in the sector. I sold out a while ago, SP is lagging coal price on the down trend as it did on the uptrend.

I do not expect coal price to bottom out until late 2024. Weakening economic conditions are as much to blame for commodity slumps as production. In part, commodity prices were high when money printing was abundant and now low with money being taken out of the economy through interest rates.

I know all the counterarguments and plethora of news articles to indicate otherwise, because I was the one researching them and arguing why coal price would not fall below $300 a while back. I and many others underestimated many factors, especially supply response and economic impact.

Prices are still good and supply needs to be squeezed by price before we hit the bottom. Likely, the same high cost producers that began to meet the high prices need to get squeezed and curtail their production before we can see another rally. Depending on what international producers' unit cost is will determine the bottom of the cycle. If it is similar to WHC, then we may see a bottom somewhere between US$60-$80 per ton which would need to remain for some time to weed out production. In that time, global economies will recover and demand will increase while supply decreases.

Thats the short story. So you can see that EPS at $150 per ton means little, especially when SP is at best fairly valued on current coal prices. IMO, it is overvalued. Big funds that bought in on the way up are not eager to sell, with likely internal governance on holding times, prices and percentages forcing them to hold. Once these internal conditions are met, funds may begin to dump the stock and we could possibly see SP of sub $2 again.

WHC is still a great company, it is just no longer the bargain that it was when selling for under $1.