on radar screen in canada - haywood securities, page-10

Hi Jgocar24

Many thanks for obtaining access to the Haywood Securities research. I am sure all on the CPL thread appreciate your efforts. I am looking forward to seeing what value they ascribe to CPL once they research fully and provide their recommendation.

It appears updated coal washability results will be out in early July. Haywood have stated this as being a price catalyst so would be interesting to see if CPL is able upgrade the coal quality from the stated 6212 kcal/kg assessed some 30 years previously. Hopefully advances in coal washing processes over the past 30 years can add further to the calorific value.

We can then look forward to a maiden JORC on the Coalspur leases probably sometime in August. I have no idea what this could be but it is sure to put us over the combined 1 billion tonne mark first up. What do others think?

However, the biggest near term catalyst to me appears to be the release of the pre-feasibility study on the amalgamated Hinton leases in late Q3. This puts its release at about the time CPL plans to list on TSX. The timing could not be better.

The economics should prove outstanding with hopefully 10 million tonnes at production and FOB costs of approx $40 per tonne. Based on CPL's previous scoping study parameter of an average price of $87 per tonne for thermal coal over mine life it would equate to average pre-tax cash margins of approximately $470 million per year. Whatever value model is applied it is easy to see we have a project valued in the billions even allowing for project value model discounting. This is just for Hinton not to mention the Coalspur lease project which would likely become a separate operating mine leveraging of the Hinton mine infrastructure.

One last point is that the trading of the last week is interesting in that buying pressure seems to increase in the last two hours of trading. Hence we have closed at all time highs the past three trading days. It has been mentioned to me that this is possibly buying out of Europe. Just an interesting thought given Colin Styen resides in London and I would suggest so to do some of his investment contacts.

Regards

Danash