paydirl march 2011 article, page-18

I agree cost of funding is an issue, perhaps for a little further down the track though. As I've said before, I think they ok for this year. Provided the balance of the $15m cvt is still available, and the $9m asset sale is still supposed to happen. (They are a little untrustworthy no that sort of stuff). Your point on the open cast thing certainly helps. The bulk of the $40-70m spend may be for well into 2012. Amazing that there is one fact that seems to have been underpromoted...Mihaaaaaaaaaaallllllllll. (I hope he would laugh at that).

I know you said potential to be a multibillion dollar company. Thats true in the sense that anything could happen. Coal prices through the roof, successful exploration etc. However, the mult billion valuations for CCC given on hotcopper are just wrong. The discounted value of CCC's own business plan comes to something round half a billion (Obviously a lot of upside in shareprice if you back the plan). Like the three analyst reports say. People argue their a bit conservative but there are arguments the other way too. Most notably ignoring the BEE minority which I don't think even JB will ever do again. Those valuations use the company assumptions and have different methods, but all come out about the same.

The hot copper valuations have 1 or normally all of the following flaws:

1. Ignore BEE 26pc share.
2. Ignore overheads, outside mine cash costs.
3. Ignore value of options as an outide interest in the
equity.
4. Use forward earnings but ignore cost of capex and or cost of funding to get there.
5. Lastly and most important. They take what is a forward EBITDA number (at best) and multiply it by a PE multiple. For instance, a 2013 PE of 12 when the EBITDA mu1tiple would be more like 4, if your lucky.

Unfortunately, no one ever comments. In fact, amazingly they give thumbs up. I think most people must know the numbers don't make sense but don't comment as long as a log. I disagree that they help themselves. It just creats this strange, too good to be true story that put some investors off. Maybe the most important ones.

Thats not to say some people may think its worth more than an inherent valuation. A lot of company trade cheap to any sort of valuation like that. Also, management view is vital. I don't realy trust them, so to me its worth less. Other people who know mgt well, such as Mihal, still very much trust them and would pay a premium to invest in their company.

The other factor poster mention is coal prices. Some people say that because coal is likely to go up it should be worth more. I don't think thats right really. CCC could one day be worth more if coal up but the company has very specific risk and returns that determine its value. KOL US would be much more of a play on the expected future coal price.