its a circus !

The recent valuation downgrade should not be a complete surprise.

Back on Dec 30th I posted concerns about the expert's calculations - here is an excerpt of part of that posting

"I have noticed some things in the expert geologist's report that appear to me to be anomalous:-

1.In his conclusions (page 21) he writes "A coal seam with a thickness of 2.5m over an area of 50 sq km amounts to 350Mt (density 1.4)."

By my calculations it is only 175Mt (50 000 000 x 2.5 x1.4)

2. On page 20 in his Comparable Transaction Valuation he states that EPC1045 is 240 ha in extent, whereas it consists of 279 (or maybe 272 - he gives two different numbers for the sub-blocks comprising this EPC on page 5) sub-blocks . According to the annual report it is 906.75 sq km.
(In the table at the bottom of page 20 he gives the area as 280 ha)

So if it is 906 sq km then the value per sq km is $2,980 and $29.80 per ha and not the $11,250 per ha that he gives.

Actually his table at the bottom of page 20 appears to give all the EPC areas incorrectly - he has stated them as ha whereas the numbers he gives would more closely reflect the real areas if these numbers were sq kms not the ha he states.

However, I am no expert, but the expert's table looks inaccurate to me.

What do you think ?"

That the company has not supplied any explanation for the changed figures shouldn't come as any surprise - they keep us pretty much in the dark on a lot of things

- they didn't give much explanation for the lack of the anticipated JORC estimate by the end of 2008, apart from "technical reasons"

- they didn't tell us that they had been threatened with legal action at the Dec meeting, just that objections from a shareholder were the reason for deferring those 4 resolutions

The threat of legal action was revealed in the recent auditor's report though.

The Independent Expert's Report of October 2008 has other serious failings too. On page 14 they state that the area of a number of BWN's coal tenements as "undisclosed" and they cite the 2008 annual report as their source of the area figures, yet in the geologist's report which is included in the overall report there are area figures given for all the coal tenements, though he made errors too. And the 2008 annual report does give area figures for all the tenements.

I think it is unacceptable that the Independent Expert's Report contains such nonsense. I also think it reflects quite adversely on the Board that they let these silly errors be published.

And I wonder whether WHK Horwath will be refunding any part of their fee for producing the report as compensation for these errors ?