valuation and reality

Based on the announcement today I've redone some of my earlier calcs to take in to account the reality of where conti are today. I've come up with the following:

Current Production
MPUMALANGA : PENUMBRA MINE, OPENCAST - 500,000 t/a export + 180,000 t/a domestic
Vlakvarfortein - 600,000 t/a domestic

Totals: domestic: 780,000 t/a, export: 500,000 t/a

domum's formula
Plugged into my slightly amended version of domum's valuation we get:

Assumptions: $12/T margin on domestic, $30/T margin on export

Domestic 780,000 MT X US$12/T = US $9.3M
Export 500,000MT X $30/T = US $15M

Total profit margin $24.3M APPROX.

Tax 29% brings us back to US$17.3M APPROX.

P/E of 10 given the balance between export Vs domestic production in 2010 and converting for $US/Aus at 90c US we get $19M profit

Apply this to 2.7B FULLY DILUTED is around 0.007c/share.I'll discount by about 15% to about 0.006c.Multiply by P/E of 10 and we get an sp of about 6c or a market cap of $162M.

plus inground resource of 631MT equates to a market cap of $793M or 29c per share.

Note: I've also plugged the figures into the d&d spreadsheet as a cross check and came up with a similar figure.

A few peer comparisons
To bring this figure back to reality it's probably worth looking at some actual market valuations also. There are others I could and probably will do over the coming days/weeks but here are a few to start with.

Note: please check these figures for yourself as I cannot guarantee their accuracy:

Company : Continental Coal (CCC)
Fully Diluted Shares (approx) : 2700000000
Share Price: 0.07
Market Cap: 189,000,000
Current Production: 1.28 mta
Reserves: 631Mt

Company : Cokatoo Coal (COK)
Fully Diluted Shares (approx) : 602,507,380
Share Price: 0.5
Market Cap: 301,253,690
Current Production: 600ktpa
Reserves: 827Mt

Company : CZA
Fully Diluted Shares (approx) : 556,002,161
Share Price: 1.79
Market Cap: 995,243,868
Current Production: 4.2 mtpa
Reserves: 1,700Mt

Company : Macarthur Coal (MCC)
Fully Diluted Shares (approx) : 254,333,109
Share Price: 13
Market Cap: 3,306,330,417
Current Production: 5.26 mta
Reserves: 1,815.2Mt

Company : Whitehaven (WHC)
Fully Diluted Shares (approx) : 493,650,070
Share Price: 5.42
Market Cap: 2,675,583,379
Current Production: 3.7 mta
Reserves: 1,190.3Mt

In the short term I think a comparison with COK (which is also seen as undervalued) is more than appropriate given that conti's production is greater but their reserves slightly lower.

I think in the medium / long term (3-5 years) Botswana could be the Elephant in the closet as it could add an extra 1billion + to conti's reserves. This is when we can start to look towards the lofty heights of some of the others.

Hope this is of use. Please as always do your own research and feel free to correct me on any inaccuracies in my calculations or assumptions.