ccc growth projections, page-123

Have been making additions/alterations to 5shareholders excellent projection figures which I believe to be pretty much worst case scenario, particularly as they do not include Vlakplaats expected profit of ~$40m in 2013. Not trying to steal his thunder but merely trying for a less conservative figure that is more into the possible/probable category for long term investors.
2013 Calendar Year Production

Vlakvarkfontein 60% (but effectively 100%)
10Yr Mine Life
Margin: $7/t(D)
1.2MTpa(D)
$8.4M profit

Penumbra 100%
20Yr Mine Life
Margin: $7/t(D) and $60/t(E)
0.1Mtpa(D) and 0.5Mtpa(E)
$31M profit

De Wittekrans Complex (all 4 mines) ~90%
30Yr+ Mine Life
Margin: $7/t(D) and $60/t(E)
4.2Mtpa(D) and 2.8Mtpa(E)
$176M profit

Vlakplaats
30Yr+ Mine Life
Margin: $7/t(D) and $60/t ?(E)
1.0Mtpa(D) and 0.5 - 0.8Mtpa(E)
$40M+ profit (estimate)

2013CY Projected Earnings: $255.4M

2013 Q4 Share Price Evaluation

With all this in mind, and realising that we will earn over $200M in 2013, it's worthwhile seeing where this would value our company. Because of the massive expansion in projects, it is only fair that we include a risk factor of 25%. As our two biggest prospects, Penumbra and De Witt, are expected to last 20-30 years, we would expect the market to pay a PE of 12-13 in my opinion. We can also expect to have debt to pay off for the developments of Penumbra and the DW Complex. I would imagine ~$150M - $200M in debt wouldn't be unreasonable.

I would take the earnings of $255M, multiply it by the risk factor to get a mean risked earnings of $191M. Give that figure a PE of 12.5 which would give our production an EV of $2387M. Take away our hypothetical debt balance of $150M, and we have a company worth $2237M. On our current registry, that would give us a value of 55.6cents per share. (When Penumbra, De Wit and Vlakplaats are up and running, ie derisked, we can do away with the 25% risk factor and then look at 75.5cents per share). I must stress that this is still quite conservative as the margins are based on current thermal coal prices of $120/t and by all reports these prices are set to rise towards $200/t over the next 5 years. A $10/t increase by 2013 would add $40M to earnings for that year and 12c to the share value.

If management can pull all this off within the expected timeframe, CCC will be worth $2B in value by the end of 2013, simple as that. Given that management have stated that they will not dilute the share register unless they are acquiring a producing prospect, it is safe to say that any more dilutionary effects on us shareholders will be offset by even more earnings flowing into Continental's cash balance. For the time being, I see no reason to be bailing on this stock. I will happily take 500%-600% gains from current prices within 3 years. Furthermore, if we are successful in Botswana, the rise and rise of AFR over the past 6 months highlights how much CCC could grow in value from that prospect alone. A mere handful of drill holes in their tenement (no JORC) has AFR valued at $300M+. Just imagine what an extensive drilling campaign (90 holes) on our part would do to the value of our tenements. At merely the same valuation as AFR, $300M, it should add 7.5cents per share.