Looking good. I think we're starting to see market awareness of the met/coking coal sector.
China's steel production continues to boom to new heights, likewise with India who have no domestic coking coal reserves and are ultimately competing with China to become the largest importer of coking coal. Strong demand also exists from steel mills in Europe and Latin America.
With demand for steel production increasing due government stimulus across the globe spurring on infrastructure projects, it's hard to see the bullishness for coking coal subside anytime soon.
In terms of New Elk, by blending Blue seam (or Primero) coal with Pratt coal, a high fluidity coking coal is obtained, which is exactly what Indian and Chinese steel mills are looking for. The market is there and waiting while the margins are astounding.New Elk, former producing mine in Colorado with significant resource of 673m metric tonnes with 45m metric tonnes saleable right now.
Will be in production by June 2021 or earlier.
Initially will sell 1.5m-2m tonnes per year into the market with plans to ramp up over the next few years.
Term sheet on debt already in place for capex (US $13.5m). Fully permitted, ready to go.
FOB cost around US $80 per tonne. Coking coal prices around US $150 per tonne. Approximately US $70 margin per tonne. At 1.5m tonnes pa ~ $105m or 2m tonnes pa ~ $140m. Enormous upside whichever way you look at it.
The Connotes would have also been churned today. Incredibly undervalued at the moment but market awareness has just begun.
