I did a back of the envelope calc for EER by comparing EER's market cap to CEY's. They would have roughly the same resources i.e. around 2 billion tonnes JORC compliant.
Key differences: 1. CEY's a producer, EER is not 2. They have a different mix of coal types 3. CEY's got transport sorted, EER has not 4. CEY's resources comprises measured, indicated and inferred. EER's is inferred 5. EER needs the capital to move this into production.
CEY market cap is 1.72 billion dollars. EER is 21 million dollars.
Say we take into account all the supposed shortcomings of EER compared to CEY, and say it should be only worth 10% of CEY, that would value EER at $172 million dollars.
Say we consider that to be too high and say it is only worth 5% of CEY. That would still be $86 million dollars which is still FOUR FOLD the current price.
Now for any of these valuations to be borne out, EER need not actually proceed to production. It is possible that their asset may be taken over by another company which has the wherewithal to develop the resource.
Happy for any other issues to be raised. I do believe this is significantly undervalued but I am not one to argue with the market. Far too many stocks with a disconnect between fundamentals and share price. Too often the only thing dividing fairly valued companies and undervalued companies is how well they capture the market's attention. You just need one newspaper article, interview with Kohler on Sunday or analyst report to send the share price rocketing.
