This may become an essay, but to try and bring some clarity to...

This may become an essay, but to try and bring some clarity to those who are unsure or new I will try and provide a clear view on CKA. I was at the recent meeting and have been a shareholder for around 6 years. I am no coal guru like Sharejagger, and no monster holder (think number 42 from Sharejagger's intel), so enough for me.

Anyway the journey for CKA has been a tough one, like most penny stocks on the ASX. There have been many false starts of coal going down the river, but the reality at all the times in the past is it was no where near that point. Dom and the team have done a great job on little money to get the mine and the logistics opportunity where it is. It is logical to ask why not do it quicker as we did missed the massive coal prices of 2022. The reality is it would have diluted the company too much as the company valuation was too low at that time and it would also have been hard to raise as coal is not in favour on the ASX, therefore Dom had to take funding facilities (Eddie Chin). We thought when Eddie's money came in that that was it, the surge when to 25c powered by sky high coal prices, but the reality again was that the logistics was just not in place to sell enough coal.

What I believe Dom has been doing is building the opportunity for alternative funding. He has made CKA more credible and able to ship coal, but to do it in the volumes required to make real money, more investment it required. He doesn't want to go to the market and dilute, and he doesn't want to take a high interest funding facility. With CKA the product has never been in question, but the location has. The irony is it is the location of the mine is probably the savior for CKA. With our positioning relative to Petrino's mine and them wanting to use our logistics it has enabled us to get a funding facility from them. They have been doing due diligence for around a year and decided CKA is in a credible enough position to be used by them. They are providing "low" interest funding considering the amount for infrastructure and barges so that they can facilitate shipping from their mine in circa 12 months. Their success is reliant on our success from a logistics perspective which is a great position to be in given their size and experience in mining and contract management. Now CKA are in a different situation than before, previously we have done things slowly on no money and now we have a power house backing us and providing funding, but it needs to be executed well and in a timely fashion (circa 12 months). This is where I see that CKA will need to step up and deliver as it is different than they have operated before. If they fail to deliver then I doubt Petrindo will keep paying and it could be a problem for CKA (the risk part and the reason the SP is low) as well as the fact we currently aren't shipping the volumes required to generate enough revenue and profit to warrant a higher price.

But let's look at some figures. This is where from the latest presentation we can do some very basic projections. Dom has stated figures, but we have heard this before. So here is a one minute model which takes a more pessimistic view than Dom has stated.

Dom has said:

Cost - $135 HCC / $120 PCI
Sale - $200 ish
Volume - 15,000 tonnes a month
Volume intention - 100,000 by the end of FY2025

Now I have done a different model where the sale price is less and the cost is more. I have not considered shipping coal until November to allow for logistics improvements, overburden removal, rain to return, and only starting at 15,000 tonnes the previous amount. The volumes are incremental and less than expected according to CKA FY2025 targets:



Even on this we are looking at a revenue figure more than the market cap and a nice profit that would pay down some higher interest debt. If the volumes are greater, the costs lower or sales price is higher (both are the aim) then the model looks better. Dom suggests increased volume will enable lower cost, and as they get reputation they can get a higher price, coupled with market changes (2025 meant to be increased prices according to futures).

Now the talk is always on the 2mtpa or scaling to 6mtpa, but lets even look at just less than 1mtpa:



I guarantee if a quarterly said $48m in revenue and a profit of $15m then the market would wake up. This is the real driver, not another announcement of funding that facilitates the company to do something. CKA have had this before and not managed to produce what has been their target. So now it is down to the actuals, every month what are you shipping and collecting in customer receipts at what cost.

Now let's look at the dream, the 6mtpa target



Now this is why I see that the company could be anywhere from a $400m - $1 billion market cap, or around 40c - $1. A lot of execution required, time, coal prices going the right way, but hopefully this provides a really simplistic way to view things for anyone new.

The way I see it, the next 12 months is pivotal for the company. Everything is set up, but execution needs to be impeccable to keep Petrindo and Petrosea in the game. I never try to advise anyone on what to invest in, and the reality is most of mine is in a ETF, but every so often there is a golden opportunity. CKA is not the standard lifestyle company on the ASX, the management are not paid huge salaries, they don't CR regularly to just pay that management. Dom at times has given interest free loans which just doesn't happen. Dom was good friends with Peter Lynch (RIP), and I believe some part of him wants this to succeed for him.

New mines are slow to start up and expensive, it's been many years, but hopefully this the actual start and not another false one. Respect to everyone on the forum, one of the best on hotcopper (apart from a few people haha). Feel free to laugh at my numbers, it is only a 1 minute view as all IMO and no advise to anyone.