I think this attempt to arrive at a valuation is probably...

I think this attempt to arrive at a valuation is probably misguided. Like investors in many mineral commodities we are faced with the "lower for longer scenario". In addition for coal, we are faced with the climate change/global warming issues and the proposition that a good deal of coal may become a "stranded asset". So-called "valuations" are just dreams.

I already anticipate all those arguments that Atrum is a pure metallurgical coal play with a premium product compared with coking coal. This is true in a perfectly competitive economic world but:
- the thermal and metallurgical coal markets are not perfectly separated. At the margin they are substitutable and that means they influence each other. The prospects for thermal coal are scary.
- Demand for steel is soft and uncertain. Steel producers are nervous so while they might like the idea of reducing their costs by using high quality raw materials, they don't necessarily want to sign on for long term contracts (which a start-up producer like Atrum needs)
- In the short term it is rational for high cost producers (often supported by their governments) to continue to supply the market at below cost it these circumstances. Eventually that will change but small wannabes like Atrum have to recognize the Force.

So what is the strategy for our Board. I reckon the priorities are:

1. Conserve Cash. Get the overheads down. I like the idea of relocating as many functions/executives/directors as possible to Canada.

2. Get all our permits/ licences/ native title claims sorted with minimum up-front cost.

3. Get as much of the testing of the product done as possible - the bulk samples etc.

4. Try to tie up the logistic chain with minimal up-front commitments.

5. Try to get all the engineering and financial feasibilities done with minimal upfront costs (ie on a promise)

The medium term objective is to get "project ready" so the company is ready to take advantage of a change in the market As much as we all might resent the ex-directors taking their knowledge and trying to use it for their own advantage (if that is what is happening) spending money on lawyers just weakens the company. Those guys are way behind the company (if it doesn't get distracted) . Let them run around trying to reproduce our situation. The time to take them on is when Atrum is up and running and can afford the legal costs.

I have a small parcel of shares and am not inclined to increase my (now much diminished) investment right now but I will keep an eye on the situation and might wade in if I can see the medium term scenario improving. I would like to see the Board set out a realistic plan for the next couple of years.

These are hard realities but lets face up to them.