whats happenning ???, page-33

Hi Again,

Exella, generally I dont post at all unless its a subject i know a little about. About me: Im a process engineer for a company called Sedgman who design coal wash plants thus why I would share my opinion on this stock.

The main reason I am skeptical on the viability is this bigstar:

Export thermal coal is generally less than $100/tonne (someone posted $80/tonne today, so im being generous) which is a fairly low price/tonne when you work out the current conditions of the company.

Firstly, their shallow seams are still at 60-80m deep which are high ash (above 12%), high moisture (above 6%) and relatively average all round. meaning they will definetely be classed as thermal coal. Mining down 60m to get to that coal will be expensive, how expensive exactly? it depends on a whole range of things, but I would budget $40-60 per tonne.

Secondly, No current transport and if rail does get built, it has a cost of its own. rail is fairly cheap to use for coal, around 1-2$ per tonne in australia i believe but thats a big IF for the viability of this resource. trucking coal will cost $10-30 per tonne depending on where labour is sourced from.

Thirdly, washplant operation (which will definetely be required) is going to be costly. In australia it costs ~$5 per tonne to wash coal (product tonne) and thats with a recovery of up to 95%. The recovery factor stated by them is 57%, which means your looking at $10-25/tonne. The reason it could cost A LOT MORE is that for every tonne you use lose a small amount of magnetite from your washing circuit (around 0.05% if operating correctly). Magnetite is expensive and the worse recovery, the more you lose.

SP projections I won't do, because this stock is purely spec atm. A lot of non-informed investors could hear about a 2.4billion tonne resource and ramp it to 10c, who knows.

On the upside of this stock - it has a large resource and as china/india ramp up, the price of coal will too. if you could hit 100$/tonne with a rail option, this could be worth 100million dollars, if not more, however at current times and economic conditions (europe and america slowing, thus china coal usage may also drop as exports drop) this resource isnt viable in my opinion.

As for stocks I am positive on.. currently there are few - ABU - recently partnered with Tanami to become a low-level producer this year. LYC - bought in early this year at the low in anticipation of malaysia deal. Very risky i know.

Recently sold out of MAD for a 100% profit, company im still positive on, just sold prior to a pullback. I will buy in if it drops to around 35c.

Ofcourse i hold longer positions on some of the bigger stocks as a dividend collection.

As for director buying, he may know something I dont which could change this entire deal, or he could be looking to ramp the SP himself then sellout later. you never know.

this is all just speculation.