why they can't make profit ?, page-9

"Ferreira is approaching end of mine life."

According to the AGM presentation Ferreira mine life is due to be extended by 2+ years.

IMO, the best strategy would be for Conti to acquire an operating mine close to the Delta plant rather than continue to buy in coal - to take advantage of the spare capacity in the wash plant, as well as the Ermelo-RBCT rail siding. When the BBBEE deal (finally) gets completed, there will be cash available for this, plus the BBBEE credentials or "social capital" to gain increased rail/port allocations.

The drilling program in Botswana was supposed to be completed in mid December 2011, so that CCC could inform the Botswana govt which portions they have chosen to relinquish, by end Dec 2011. Coal assay samples are due to be processed in SA by end January 2012 (at the earliest). I have no idea what the Botswana results will be worth to the SP - but there appears to be zero dollars ascribed value to this exploration program, so far.

For the record I bought some more heads today. I see limited downside from here, but substantial upside - once all the overdue news we are expecting comes through. CCC has been & is a massive test of one's patience and wits. The main reasons I initially invested in Conti was because of their ability to get Vlak into production swiftly, secure a LT offtake agreement with EDF, plus the operational/industry reputation of Don Turvey. Also, the ability of Conti to secure the support of KORES, ABSA/Barclays and SIOC-cdt/Kumba/Anglo shows that major, global corporations are prepared to back in DT and the Okap crew - in spite of those here who regard them as shysters. I trust that EDF, KORES, ABSA and SIOC/Kumba/Anglo have done more thorough DD than the indefatigable Rod178 & his ilk.

nzak - thanks for running the numbers - we should be getting a half yearly report soon (last year's came out 28/2/2011) - this will give a more accurate indication of Conti's profit/loss situation, and the financial performance of Vlak, Ferreira + the Delta ops.

Some wildcards for 2011 could be in developments at Vlakplaats/Wolvenfontein, (wishful thinking?) KORES will take a non-dilutive equity position in CCC, progress with the Total Vaalbank JV, Colombian coking coal or any other move to diversify CCC assets outside of SA. Also, given that Koornfontein is only running at about 30% capacity, Glencore/Optimum Coal would quite probably look to take the coal from DeWittekrans in the form of a JV agreement with CCC/CCL. It's worth remembering that DT was integral to the establishment of the Koornfontein operations when he was working for BHP.

Then there is Penumbra - which is due to hit monthly production rates of 42ktpm saleable export coal by end 2012, at approx $30pt margins.

Cheers

M.