Riversdale is cash backed to $1.80 a share, and it’s Benga coal project in Mozambique is worth 98 cents a share based on what Tata Steel paid for 35 per cent of the project. This suggests a value of $2.78 a share without assigning any value to Zululand Anthracite Coal operating in South Africa, which returned a profit of $16.2 million last financial year. RIV is unhedged and has no debt, so there are no complications in this story. Being in Africa, it’s not without risk, but it’s cheap. The stock was trading below $2.70 on November 14.
RIV Price at posting:
$2.42 Sentiment: LT Buy Disclosure: Held
