re: northern energy (nec)
Great overview but I am working on $5/t coking coal JORC resource in the ground. My expectations are that we are going to see an initial 7 - 10 m/t ($35m/$50m - Market Cap, work on 75% of project and you have a share price of 58c-83c), Their seems little doubt this is going to increase as this area is only part of the "hatched" area of previous mining. The seam is think and is dipping at a reasonable angle, some methods of underground mining may have to take place but the longwall seems to be exposed allowing open cut potential at least initially. The expectation is that coking coal prices will continue to be strong at least for the next 2 years and this commodity is certainly considered a scarce resource compared to Thermal coal. Infrastructure may be an issue but even a boutique style opperation would make money at US$80/t, not bad economics. The Taroom assets also are a call option on the infrastructure in the area, Xstrata totally surrounds the area, they are pushing very hard for the rail line to be extended, if this occurs that project is worth many millions. In all this is in the right place at the right time and when the market starts hearing more news and gets an initial JORC resource one should not be surprised to see it trading above 50c to start with with significant upside if they expand their resource.
