I guess the closest companies for comparison are Aston (AZT) and Bandanna Energy (BND).
As Nick Thom as pointed out AZT have about 630 mil tonnes JORC with approx 1.2 bill market cap and a mixture of thermal and soft coking coal. Production is contingent on significant infrastructure uncertainties. Therefore EV/ $2 per tonne.
BND has 1300 mil JORC, $300 mil market cap, however dont own all of their leases and also have significant infrastructure uncertainties. This from their Annual report
"Ultimately all of our Galilee and Bowen basin project developments will depend upon large integrated infrastructure construction, much of which will be beyond the control and timetable of Bandanna."
As far as taking out an assumed premium for speculation of bids/takeover I think you raise a good point. I posted previously the below which illustrates what off-take partners are prepared to pay to secure supply.
Whitehaven Coal in August 09 entered into an agreement with a Korean company Daewoo to sell 7.5% of their 77.5% stake in their Narrabri underground thermal coal project for + $125 million. Narrabri contains a total of 438 mil resource tonnes measured, indicated and inferred. 77.5% of this is 339 mil tonnes. Therefore Daewoo are paying $125 mil for approx a 25 mil tonne stake equating to approx $5 per tonne in ground and secure supply.
With respect to sensitivities of the DCF model to exchange rate variances they are significant. Changing the fx rate to .9 gives a value of $2.75 per share. However, on the same criteria if we leave the fx rate at .9 and increase price of coal to a value of $100 per tonne we get $4.03. Therefore every parameter used has an effect on valuation. What I have attempted to do is pre-empt the parameters of the PFS (based on scoping study) and hopefully provide an indication as what CPL could be worth as we move along the development curve and the project is de-risked. Given the DCF model is favoured by analysts I am also endeavouring to pre-empt what value Canadian brokers potentially may give CPL in ensuing weeks and months. However, I am not an analyst and could be out on the assumptions used.
With respect to the 20/25 year time frame I based this on two understandings. Firstly DCF models dont really work out past 20/25 years. Case in point. I took the model out to 40 years on the same parameters and ended with a valuation of $4.23. Therefore, an extra 15 years of production only added 40c per share in value.
Secondly, Gene Wusaty has mentioned 20 years previously. From what I can gather CPL are more intent on maximising tonnes out of the ground over a 20/25 year timeframe rather than extending a mine to 30/40 years where little value is attributed. To put this another way they would rather mine economically 15 mil tonnes over 20 years than say 8 mil over 40 years as the real value is in the first half of a project.
BC, just my views and I hope this helps. Anyhow, welcome to the CPL thread.
Regards
Danash
CPL Price at posting:
92.5¢ Sentiment: LT Buy Disclosure: Held
(20min delay)