I have redone the 2015 valuation with higher thermal coal prices (to be more realistic but still displaying a worst case scenario) and also factored in a 60/40 ratio between domestic and thermal coal respectively. Also i have added in valuations for 2011 and 2013 online with new projects coming in line (with Mihal being a major help as usual). I believe these valuations are quite close to the mark :)
Continental Coal Limited (2015 conservative - based on company presentation figures):
Number of shares + options: 5.5 Billion (Up from the current 4 billion as there is the possibility that shares may need to be given out to partners/government)
Annual tonnage: 4MT Export quality/ 6MT Domestic quality (Extremely conservative given the potential for the ratio to be 50/50)
Thermal Coal Price: $150/T (Again, extremely conservative given the current supply shifts from the floods forcing the spot price to be around $130 right now and constant growing demand mainly from the BRICs and the general global economy)
Costs for export quality: $60 (Conservative to allow for higher costs from the current $55)
Costs for domestic quality: $18 (Conservative to allow for higher costs from the current $15)
Operating Margin (Domestic quality): $12 (Conservative given $15+ potential)
Operating Margin (Export quality): $90 (Fairly conservative given potential for thermal coal to be $200+)
P/E Ration 15 (Quite average considering the Sectors P/E Ration is about 16, All Ordinaries is about 14, BHP 14, FMG 15)
Profit = 4MT x $90 + 6MT x $12 = $360,000,000 + $72,000,000 = $432,000,000
EPS = $432,000,000 / 5,500,000,000 = 0.0785 (3DP)
Share Price = P/E Ratio (15) x EPS (0.0785) = $1.18
Market Capitalisation: $1.18 x 5,500,000,000 = $6,490,000,000
This valuation has not factored in Botswana which had the potential to add 20c+ and the figures here are quite conservative as they try to show what the worst case scenario would be like so CCC may actually be valued around $2.50 in 2015...
2011 (based on Mihal's figures):
Profit= $49,630,000
EPS = $49,630,000/ 4,000,000,000 = 0.0124
Share Price = P/E Ratio (15) x EPS (0.0124) = $0.186
Market Capitalisation: $0.186 x 4,000,000,000 = $744,000,000
2013 (based on Mihal's figures):
Profit = $300,400,000
EPS = $300,400,000 / 4,750,000,000 = 0.0632
Share Price = P/E Ratio (15) x EPS (0.0632) = $0.95
Market Capitalisation: $0.95 x 4,000,000,000 = $3,800,000,000
I have factored in an extra 750m shares every 2 years for possibly future shares/options given to the government/future partners
I hope this gives CCC holders an idea of what they bought into. If you see any holes in my logic please speak your mind :)
CCC Price at posting:
80.0¢ Sentiment: LT Buy Disclosure: Held
