Poyndexter has (as usual) done a stellar job of summarising...

Poyndexter has (as usual) done a stellar job of summarising proceedings at the AGM. For what it's worth, here's my two bob -

1. We know that EPG have a LOT of land already permitted or under application, but it was made clear by Anthony that, at least in EPG's view, they control most, if not all, of the prospective ground for CBM / CMM in France - full stop. In his view, they essentially have had no competition for their current crop of leases (he mentioned there were no challenges lodged in the mandatory 90 day response period for the about to be granted Lons Le Saulnier permit) , and consider themselves to be 'at least 2 - 3 years ahead of any competitor in France' (Anthony's words).

2. We may well have all underestimated just how big, and how prospective, the Lons Le Saulnier permit is. While it hasn't been awarded yet, Anthony pointed out that the 90 day public response period has passed without challenge, and in his view was '95% of the way there'. While he pointed out that anything could happen, they were fairly confident of being awarded the permit in the not too distant future.

This lease is literally several THOUSAND kilometers square, with a history of coal that could not be mined because it was too gassy!!! Anthony considered the permit too big for EPG to tackle on their own, and stated they would most likely partner with a major to develop this lease. He was of the view that preliminary studies to determine the best drill sites would run to 'several million Euros'.

3. Was interesting to note they are actively looking in Germany, though consider they will have much tougher competition for prospective ground there. Anthony made the point that the Lorraine coals are just the south western tip of a massive series of formations that extend through the Ruhr(?) region all the way to the northern reaches of Germany. HMMMMM....

4. For the Folschviller well - they found 80% more coal than projected, and 17% higher gas content. As we know, they also found gas in the interburden rock.
Anthony alluded to the fact that this is all going to result in a very, very significant upgrade to the resource estimate for Lorraine.

5. To a question from the floor about cash burn, Anthony's response: 'The name of the game at the moment is capital appreciation for shareholders', and in his view, they have progressively removed a great deal of risk from the project. With upcoming resource upgrade, pilot wells, and imminent granting of new leases, he was of the view that 'the smart money is getting in now' (his words).

6. European listing - stated they are likely to list in France. I agree with 'Dexter, this is politically a very smart move, and French Parochialism SHOULD NOT BE UNDERESTIMATED.

7. Drilling of Pilot wells - This was the only real red flag that was raised for me. I asked Anthony why the pilot production drilling was not happening until Q2 2007 - was rig availability a factor? Answer was 'Yes, rig availability is a factor'. I THINK he said the rig was booked but not confirmed. KEEP A SHARP EYE on this - I have seen several projects delayed indefinitely (albeit in Australia and U.S.) because they could not secure a rig.


Ultimately, I went to the AGM to get a read on how the directors presented themselves - to 'see the whites of their eyes'. I left very impressed with Anthony McClure's form. He came across as a very level headed, no nonsense operator. IMHO, the company is in very good hands.

Finally, was good to meet Poyndexter, HotNickel and Rob - and look forward to meeting those we missed at future EGM / AGM's.


Mickey.