broker report and forward earnings value

Below is an extract from the GMP broker report... they have given a value to the company of 333Mil. After analysing the potential of most projects I feel they have been very conservative in the true value.

As many key projects will generate cash flow relatively quickly. In addition forward earnings should be around 2c ps in the MT. Meaning current value has only a forward earnings PE of 3.3. Most other producing Coal companies have greater than 20x PE forward earnings prediction. As coal is naturally in huge demand and a continuing cash cow. The PE is usually a bit higher than many other commodities. As we will always need more and more coal in the emerging and developed countries for a long time to come.

Over the next year we should see a rerating when many projects cash hits the bank. Forward earning of a consevative 2c with PE= 20 can justify a 40c SP. Huge discounts now apply as the Coy works out the integration of the acquistion.

Very bullish on this stock now compared to the 12c BUY reccmmendation from GMP Securities.

Whomever still does not have a copy pls feel free to ask for a copy...my email in sig... I needed to email a dozen people to get the report.

Looking very nice as a risk-reward play now, with multi bagger potential in the medium term. Should be a great 2011 for this play. Very undervalued compared to peers.

DYOR-IMO

Cheers JAY

>>CCC brings in Korean Resources to fast track
Vlakplaats...

CCC signs JDA with Korean Resources to fast track Vlakplaats...

Continental Coal (CCC) reported today that it has signed an agreement with
Korean Resources (KORES) whereby the two companies will jointly develop
the Vlakplaats thermal coal project, along with a BEE partner. CCC, through its
South African subsidiary CCL will hold 50% of the project, Korean Resources
37% and the BEE partner 13%. KORES and CCC?s BEE partner agreed to pay
R96.2m and R33.8m respectively to acquire their shares in the project. KORES
and CCL will commit R32.5m to fund the BFS which is expected to be
completed within 18 months. CCL will act as the project manager and in turn it
will receive a 2% management fee.
Off-take agreement with KORES


KORES has agreed to enter into an arms length coal sales and marketing
agreement within 30 days of a decision to mine and will have an exclusive right
to take 100% of the Richards Bay export quality thermal coal production at the
international benchmark price.
Valuation impact neutral but a great deal in our view
In the absence of a FS we value the project using an EV/resource tonne
multiple. We apply a multiple of US$0.28/resource tonne (in line with the global
thermal coal explorer/developer peer group) to Vlakplaats? 122Mt resource,
valuing CCC?s 50% of the project at US$17m. While this does not add too much
to our valuation we believe that this is an extremely positive deal for the
company as it brings in a world class resources investor.


Maintain price target; re-iterate Buy rating
We value CCC using a sum of the parts valuation based on DCFs for the company?s
operating projects at Vlakvarkfontein and Ferreira and for its near-term development
project at Penumbra. We use EV/resource multiples to value the company?s other
projects. This yields a valuation of A$333m or A$0.12 per share.

We maintain our price target at A$0.12 and re-iterate our Buy rating as we believe that the stock is significantly undervalued.<<

IMO - DYOR

Cheers JAY