mining maven review of conti, page-3

The wilful naivety of these analysts never ceases to amaze me.

CCC is targeting 7Mt of run-of-mine coal production
in 2013, a figure includes a typically ambitious full
year of production from De Wittekrans which is still
in financing discussions, demonstrating the speed at
which these pipeline prospects can be developed.

In this paragraph they have recognised that since DeWitt is nowhere near financing, let alone construction, a "full year of production" from DeWitt in 2013 is claim that will raise eyebrows.

Good work, most analysts just blindly accept the figure and slap on a target price of 80c.

But then these guys go on to say that it reflects, not the fact CCC consistently makes outlandish promises it has no hope of keeping, but that it demonstrates "the speed at which these pipeline prospects can be developed"!

Incredible. Conti does not have a snowball's chance in hell of delivering 7Mtpa coal next year. If they are lucky they will mine some coal from DeWitt because it will be dug out as the open-cut section of the boxcut for the underground mine. But they are not going to reach full production by January 1, 2013.

I like Conti's prospects but I'm really tired of them treating us like idiots with their unrealistic timelines. They can't even meet realistic timelines like Vanmag, does anybody seriously believe they can meet this one? It does far more harm than good in the long run because it makes CCC a laughing stock (literally). If the market was confident about this company keeping its promises maybe it would be comfortable valuing in a decent forward premium.