this is going to be one hecova play

Yesterdaqy's China Daily news again that many provinces are experiencing severe shortages of thermal coal and hence electricity supply in what is shaping up as worst winter in history

Domestic coal / energy prices expected to substantially increase next year

Further case for REY (and also nukes).

Cant believe REY's soft price atm

Been squirreling these away in the super fund since the issue took sp below issue price ...... underwriters got a few to cash in I guess.

Current FOB Oz port for thermal coal is about USD 50 bucks a tonne.

I work on IG fair value about AUD 50c / t. Based CURRENT 500 mill tonnes JORC resource (which is about 5% of expected later), gives me a buck a share fair value for REY now.

Based their projected 2 mill tpa STARTER, means about 100 mill bucks pa gross CURRENT coal price(but export price likely to increase by 30% next year ?)

Assume conservative 50% PFO before tax and about 35 mill net after tax, or about 15 cps .... also easily supports a buck+ a share FV.

Key will be capex requiremnt and PF source ..... should be simple PF exercise.

MAJOR ADVANTAGES are that (1) REY control the port facilities for planned starter project size (2) they are located CLOSEST to PRC and India hence shipping advantages !!!

Longer term of course no reason why they cant upgrade project size by at least x 5 IMO.

Might find a hungry sino partner will soon start talking re serious BUCKS and no surpise to see the current BID add a "1" in front of it if they really want to get serious.

Havent seen a mid term emerging moral as this in a long time. Breaking any piggy banks I have left for this one haha.

IMBOOC