Hi Banksy88Not much action around CPL which seems range bound at...

Hi Banksy88

Not much action around CPL which seems range bound at the moment due to a variety of factors such as the perceived risk in world markets ect. CPL also appears to have become a toy of the big boys with their algorithmic trading systems probably as a result of being part of the ASX 200 index. There appears to be no genuine buyers around just your sophisticated day trading systems where .1c or .2c on your daily volume weighted average price are the becoming the norm. Anyhow , it is what it is I guess.

With respect to the coming months I expect news flow to really pick up as per CPL's last presentation. We have less than 4 months remaining and are expecting the below all of which have the potential to be real price catalysts.

Vista South Resource Upgrade (Mid 2011)
Determination of Product Yield on Vista (Mid 2011)
Initial Vista South Coal Quality Results (Mid 2011)
Vista Ultimate Pit Design and Productive Capacity (Mid 2011)
Secure Agreements with Rail and Port Providers (2nd Half 2011)
Completion of Bankable Feasibility Study (Late 2011)


I guess the key word here is potential. Whether we see prices north of $4 this year, next year or in 2014 I don't know however, at the end of the day I believe fair value will be just a matter of time and that fair value will be determined by the board. Whichever way CPL decide to go in financing and developing Vista, as shareholders, we will all be winners and real share value will be achieved. As I have said previously valuations should be north of $4 after BFS but whether this will translate to a buyout over $4 who knows. Alot depends on Board and Managements plans and I believe off take agreements and funding arrangements may provide some insight into those plans. Only time will tell.


I also think the appointment of Colin Steyn as Chairman is significant for CPL as they enter the project financing stage. Not only does he have the most to gain from any potential corporate activity and financing through the Highland Park shareholding he has also done it all before with LionOre and successfully steered them through a bidding war between Xstrata and Norilsk to the tune of a US 6 billion takeover.

At the end of the day the value is clearly evident. At $1.60 on a fully diluted basis CPL is trading at an approx EV/tonne of 74c. A comparison of international thermal coal companies contained in a recent TVN presentation highlights the average EV/tonne for Chinese thermal producers is US$4.00, other Asian producers US$3.10 and Australian approx $2.6. Taking a low, low EV/tonne of $1.50 with current resources would see a fully diluted approx $3.24 per share. Value is clearly evident it is just a matter of time.

Cheers

Danash