acquiring mashala, page-41

given that I am unable to add I'll correct my previous post with an attempt at a current valuation based on domum's excellent valuation for when conti is a producer (here)

Apologies for the big mistake in the last post. 3.5mta should be around 1.6 mta. This is broken down as follows:

MPUMALANGA : WESSELTON MINE, UNDERGROUND - 420,000 t/a
MPUMALANGA : WESSELTON MINE, OPENCAST - 240,000 t/a
MPUMALANGA : PENUMBRA MINE, OPENCAST - 840,000 t/a
KWAZULU-NATAL : GELUK - 60,000 - 120,000 t/a

This gives roughly 1.6 mta. If you assume that only 30% of PENUMBRA MINE coal is exported and the rest goes to Eskom that will give a breakdown of domestic vs export as follows:

domestic: 688,000 t/a
export: 912,000 t/a

Add on to this domestic production at Vlakvarfortein which currently should be around 50,000 t/m or 600,000 t/a we can now plug the following 'soon to be' current production figures into domum's calculations (hope you don't mind domum - i've just changed the figures for the most part):

export production: 900,000 t/a
domestic production: 1.2 mta

*note: i've rounded down the figures keep it simple and more conservative.

=================== domum's formula =======================

D&D report gave MARGIN figures of

* $7/T unwashed DOMESTIC

* $14/T washed DOMESTIC

* UP TO $40/T EXPORT.

I believe CCC has strong intentions to wash the Domestic production coal but imo its still prudent to perhaps make the assumption that not all domestic production will be washed so I'll take a $12/T margin on domestic given thermal coal prices are very strong atm.

The export figure is UP TO $40/T,but again this would be based on very good quality export thermal so again, based on the good thermal coal price market, if we go with $30/T this would give margins on 2010 production as

Domestic 1.2 MT X US$12/T = US $14.4M

Export 900,000MT X $30/T = US $27M

Total profit margin $41M APPROX.

Tax 29% brings us back to US$12M APPROX.

Now Im going with a P/E of 10 given the balance between export Vs domestic production in 2010 and converting for $US/Aus at 90c US we get $45.1M profit

Apply this to 2.7B FULLY DILUTED is around 1.6c/share.I'll discount by about 15% to about 1.4c.Multiply by P/E of 10 and we get an sp of about 14c or a market cap of $378M.

plus inground resource of 500MT equates to a market cap of $878M or 32c per share.

please correct me if i'm wrong as I am certainly no expert and ofter prone to the odd mistake! I like that I am getting similar figures valuing this acquisition different ways though.