what's next?, page-2

As a long standing shareholder, the last thing I want to see right now is an opportunistic takeover bid at (say) 15 cents. There are plenty of stockholders in at 20, 30, 40, maybe 50 cents a share who did not abandon the stock on the way down, so a takeover bid before real value can be extracted by management would not be welcome. Full shareholder value is never extracted in a takeover has been my experience.

IF funding is sourced for current mine expansion, 3 million tonnes per annum at $30 per tonne net profit (the figures represented by management) is $90m net profit pa. Applying industry sector p/e of say 10 is an entity capitalization of $900m which is about $1.15 a share across 800m shares following the Hume share arrangement being ratified by shareholders.

Right at the minute, I would not like to see either an opportunistic takeover, or a major share dilution by going to the market for mine expansion funding. The company needs time, post funding announcement, to extract value from the current asset, and get it somewhere close to 3m tonnes via WICET stage 1. I suspect the majority of funding will come from a current shareholder, thus tightening the register, and making COK less of a takeover target.