Seehttp://www.carabellaresources.com/Investors/BrokerReports.htmS...

See

http://www.carabellaresources.com/Investors/BrokerReports.htm

Something interesting to compare CLR with BTU.

http://www.asx.com.au/asxpdf/20110217/pdf/41wv5df23l38dn.pdf


BTU

2Mtpa by 2015 (not inc N Bulla)
US$184M including capex and vendor payments
Funding via large equity placement
US$92M capex per 1Mpta of coking coal

CLR

5.2Mtpa by 2016
US$362 capex
Funding assumed via 20% asset sale and 50/50 debt equity
US$69M capex per 1Mpta of coking coal



CLR advantages over BTU

Dont need vendor payments at an early stage which required large placements.
Possible capex finance by 20% asset sale and debt, limiting further share dilution.
Corporate potential next door to Anglo.
Larger exploration targets.


BTU advantages over CLR

Superior quality and operating cost
Multiple mine options
Completed BFS and closer to production and cash flow
No MRRT


BTU is much more advanced than CLR planning for initial production next year, ramping up over the following three years where broker report has assumed CLR start in 2015. The strong run since listing imo is from investors taking a closer look at CLR's coking coal resources, lease position, potential production profile and strong supply/demand for coking coal.


Stumping up A$29M in cash just four months after listing at 450% premium to the ipo price shows alot of confidence in the company, its management and that all involved believe CLR is still undervalued. Worth checking some of the assumptions on the broker report, if 20% of the Grosvenor West can be sold for 80% NPV which is over A$1B....then this would almost cover CLR's equity component using at 50/50 debt/equity ratio to fund the project capex.

Although this is while out in the distance, the implication is that CLR may not issue significant script to move into production from here.

Other interesting point is CLR's leases are next door to Anglo's Moranbah coal mine. Appart from BHP, the majors appear to be short on coking coal production exposure, hence RIO's move on RIV and the current dash into Mongolia and Indonesia.


Would expect Anglo to monitor CLR's progress and possibly run the ruler over CLR's potential production, capex and opex from their point of view, which should be lower on the cost side. Not sure how likely any corporate deal is however potential is there with lease position next to majors and recent deals in coking coal sector involving RIV, NEC, Whitehaven Coal, Massey Energy and others plus recent positioning in HUN and AKM shows alot of interest for "buying" coking coal tonnes.


Not talking down BTU here at all btw, point is CLR has potential to catch up to a rising BTU over next 12-24 months. Used BTU as they are the next pure coking coal
producer on the asx plus similar size JORC and 2015/2016 production profiles.


For traders dont forget 3B is out on 30th, expect some selling but only st weakness. First escrow shares come out on 25th of May and 1st of June.