what's the go?, page-9

Beardy,

If the deal hadn't been so absolutely appalling to COK, I would agree with you. But now there are so many shares on issue that 20c would give a market cap in excess of $850M.

The NPV of the entire project was only a bit over $1B when the BFS was done, and it will be far less than that at today's met coal prices. The other assets are essentially worthless now that Wandoan is on ice, and BWD are bringing nothing to the table except more stranded resources that will cost precious money to maintain the tenements.

On a P/E basis they will probably justify a 10x value. For a SP of 20c that means their NPAT would have to be $85M, which from 3 Mtpa means they need a net profit margin (not gross) of about $30/t. That is extremely high and at the moment they wouldn't even clear that gross, let alone net.

So on both valuation methods 20c looks to be an upper limit. COK may just scrape over 20c when Baralaba is at full production if met prices are good, but I can't see it going significantly higher.

When I think of the raising the Koreans pulled out of at 53c, I could just about cry. Instead it went through at 4.5c, and now we're at 3.3c. But I guess the Koreans, as major holders themselves, have had their investments wiped out as comprehensively as the rest of us, so they've only themselves to blame.

If not for them, COK could have been well over $1 on Baralaba alone.