comparison with mcc, page-2

And the idea of a 'free' option for the thermal projects is so good it's almost ridiculous to think about COK without valuing it in.

PCI production target is 2.8Mtpa but the thermal production target is 12Mtpa just from Woori, Tin Hut/Bottle Tree and the Anglo mines. It's disappointing that the thermal projects have stretched out from 2014 to 2016, but that's due to the delay in the Surat Basin rail, not COK's fault.

Not sure who we could use as a comparison producer for Surat thermal, maybe NHC. Not a perfect fit for several reasons but probably the closest we've got.

NHC produced 6Mtpa of equivalent coal in 2010. MC is $4.25B currently, but I think there is a large premium attached to New Acland so the current MC doesn't reflect the 6Mtpa current production. But let's say $2B which would bring the PE down to around 12. So that's $330M per 1Mtpa of thermal. So COK's 12Mtpa equity coal would be worth $4B to MC, compared to $2.67B for the Bowen coal.

Obviously capex costs for the Surat project will be a lot more than the Bowen, so the dilution will be a lot more but that's still a pretty good 'free' option if you ask me! Must be worth after dilution at least another dollar to the SP.

That ignores the NSW projects including Bylong management fees.

Maybe a SP target of $3 by 2016? It looks doable and pretty conservative, as long as COK meets its timelines and coal prices stay decent.