ccc growth projections, page-117

Bobs, further to my above post, let me show you the figures I was using to confirm the company's margins.

For export coal production at Ferreira I have assumed FOB costs of $75/t and a spot price of $110/tonne. This would give us a margin of $35/tonne.

Now as we move on to De Witt and Penumbra, I would anticipate spot prices for thermal coal to continue to drift around the $120/tonne mark and this would be reflected in our sales contract. FOB costs have been quoted at $61/tonne, and this is how I got the margin of approximately $60/tonne for these two prospects. I was conservative and stayed with the $35/tonne margin for Ferreira in 2012 purely because I wouldn't want to over-estimate the value of the prospect.

From 2013 onwards, provided that FOB costs remain around the $60/t mark, CCC's projected annual earnings will rise by about 1.5% for every dollar above $120/t that our sales contract is signed for. For the thermal coal bulls out there who see $130/t as being a reasonable expectation for 2013, that would increase the projected earnings by about 15% on top of what I have estimated for the 2013 calendar year ($212M). This does not include Vlakplaats which could produce anywhere from 0.5-0.8 MTpa(E) and 1MTpa(D), adding a further $40M+ in earnings on top of what I have already quoted.

In the perfect world (FOB $60/t, Coal $130/t, Vlakplaats producing), we could be looking at annual earnings of ~$250M+ by the beginning of 2014. Put Botswana into the equation which has an estimated shallow resource of 2.7Bt and you have a recipe for a fantastic long term investment.

People are going to tell you that CCC is overrated but they can never show you why. The only one who has crunched numbers to oppose some of the projections from us here is HotRock, and I respect his/her thoughts on the coal market. But at the end of the day, Mihal has reminded us that there are numerous writings out there by professional analysts suggesting that the thermal coal market will remain strong over the next years. Once we hit production all that matters is that prices stay up, and costs stay down. It's that simple.

Some of the doubters are speculating that the shares on issue will double by then, and this is just a downramping fantasy at it's finest. We have the projects ready to go, and big time earnings are on their way soon. CCC will be a multi-billion company within a few years, don't lose sight of that.