Ann: Clarification Regarding Ramp up of Production, page-35

It all comes down to valuation.

I have shown below (all based on CKA own guidance), that at current met coal prices US$240/t --- CKA's net realization will be $181/t

CKA has guided for total cost of US$135/t. I think it will be easily north of $150/t. But lets take a range starting from US$135/t to north of US$150/t to see what the range of outcomes will be.

CKA's current Enterprise Value is ~US$96 mn, including debt.

Almost all coal companies are trading at somewhere between 2-3x EV/EBITDA. And these are very very strong cash flow companies with no business risk and huge net cash flows coming every quarter.

Lets be VERY VERY GENEROUS to CKA and assign them a 3x EBITDA multiple -- despite all the risks that comes along with a venture like this.

So at 3x multiple and US$96 mn Enterprise Value -- CKA needs to generate US$32 mn EBITDA annually to justify its current stock price == 9.6 cents

At the US$180/t net realization and a range of total cost at between US$135 - US$160/t ---- the EBITDA/t for such an enterprise will be US$21/t to a MAX US$46/t

Even at a MAX US$46/t EBITDA, CKA will need to get to an annual sales volume run-rate of 692,000 tonnes.

BUT CKA owns only 60% of BBM mine. So actually at the BBM mine level, the annual sales volume runrate will need to go up to 1.15 million tonnes or a monthly runrate of 96,000 tonnes --- SIMPLY TO JUSTIFY THE CURRENT STOCK PRICE OF 9.6 cents.

This is also assuming the BEST CASE EBITDA/t margin of US$46/t.

At the US$30/t margin -- which I strongly think if where the operations will normalise at --- BBM monthly sales volume need to be 142,000 tonnes per month to justify the current stock price.

Before anyone talks about the debt owned by the other BBM owners. Not a single sane investor will believe that until the company actually publicly starts talking about it. Not hidden somewhere in a report in a subtext with a single phrase mention. It just seems there is nothing owed to CKA. So no value is going to be assigned to it -- until proven otherwise.

Most of you will continue to see CKA continue to languish at the current price for another 12-18 months and wonder why is that. Save this for that time, because these calculations will tell you what you are not willing to ask yourself or listen yourself right now.