scrap paper valuation, page-14

--------UPDATE--------

I have redone the 2015 valuation with higher thermal coal prices (to be more realistic but still displaying a worst case scenario) and also factored in a 60/40 ratio between domestic and thermal coal respectively. Also i have added in valuations for 2011 and 2013 online with new projects coming in line (with Mihal being a major help as usual). I believe these valuations are quite close to the mark :)

Continental Coal Limited (2015 conservative - based on company presentation figures):

Number of shares + options: 5.5 Billion (Up from the current 4 billion as there is the possibility that shares may need to be given out to partners/government)

Annual tonnage: 4MT Export quality/ 6MT Domestic quality (Extremely conservative given the potential for the ratio to be 50/50)

Thermal Coal Price: $150/T (Again, extremely conservative given the current supply shifts from the floods forcing the spot price to be around $130 right now and constant growing demand mainly from the BRICs and the general global economy)

Costs for export quality: $60 (Conservative to allow for higher costs from the current $55)

Costs for domestic quality: $18 (Conservative to allow for higher costs from the current $15)

Operating Margin (Domestic quality): $12 (Conservative given $15+ potential)

Operating Margin (Export quality): $90 (Fairly conservative given potential for thermal coal to be $200+)

P/E Ration 15 (Quite average considering the Sectors P/E Ration is about 16, All Ordinaries is about 14, BHP 14, FMG 15)

Profit = 4MT x $90 + 6MT x $12 = $360,000,000 + $72,000,000 = $432,000,000

EPS = $432,000,000 / 5,500,000,000 = 0.0785 (3DP)

Share Price = P/E Ratio (15) x EPS (0.0785) = $1.18

Market Capitalisation: $1.18 x 5,500,000,000 = $6,490,000,000

SOURCES: http://www.conticoal.com/uploads/media/Continental_Coal_-_September_2010_Presentation.pdf

This valuation has not factored in Botswana which had the potential to add 20c+ and the figures here are quite conservative as they try to show what the worst case scenario would be like so CCC may actually be valued around $2.50 in 2015...


2011 (based on Mihal's figures):

Profit= $49,630,000

EPS = $49,630,000/ 4,000,000,000 = 0.0124

Share Price = P/E Ratio (15) x EPS (0.0124) = $0.186

Market Capitalisation: $0.186 x 4,000,000,000 = $744,000,000


2013 (based on Mihal's figures):

Profit = $300,400,000

EPS = $300,400,000 / 4,750,000,000 = 0.0632

Share Price = P/E Ratio (15) x EPS (0.0632) = $0.95

Market Capitalisation: $0.95 x 4,000,000,000 = $3,800,000,000

I have factored in an extra 750m shares every 2 years for possibly future shares/options given to the government/future partners

I hope this gives CCC holders an idea of what they bought into. If you see any holes in my logic please speak your mind :)