Ferret's Stock to Watch: RESOURCE PACIFIC HOLDINGS LTD08:07,...

Ferret's Stock to Watch: RESOURCE PACIFIC HOLDINGS LTD
08:07, Monday, 14 March 2005

RICH HUNTER VALLEY COAL MINER MOVING INTO SERIOUS PRODUCTION

Sydney - Monday - March 14: (RWE Aust Business News)
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OVERVIEW
********

Here's another coal producer that looks to have good prospects,
although the market is still to realise its potential because it hasn't
been around the stock market long enough.

Resource Pacific has only been a publicly listed company since
the end of November so there is only one relevant month to the latest
half year.

However, the company has filed an encouraging half-year report,
pointing to sharp increases for semi-soft coking coal, pushing it 45 per
cent above thermal coal prices.

This has given Resource Pacific Holdings confidence to
concentrate on preparations for a full expansion of its Hunter Valley
coal mine.

A bankable feasibility study of the company's "expanded case" to
increase production to four million tonnes per annum is being reviewed by
participating project finance banks for the proposed debt funding
component of the expansion cost.

Following their credit approval, a decision will be made on the
need for any additional equity.

Directors say planning is on track for the company to make a
decision in June on the expanded case, to enable the proposed longwall
operation to be installed and in production by January 2007.

Managing director Paul Jury says that recent coal prices,
together with the fact that the mine development was running to plan, had
provided confidence to pursue the expanded case.

Mr Jury says directors now view the base case as a fall-back
option.

Prices achieved by Resource Pacific have continued to increase
and currently are close to $US80 a tonne.

This compares with average prices of about $US58 tonne for
contracted sales during the year to June 2005 and approximately $US68 a
tonne for contracted sales during the year to June 2006.

The prices augur well for substantially higher earnings for the
half to June 30, 2005.

SHARE PRICE MOVEMENTS
*********************

Shares of Resource Pacific on Friday rose 2c to $1.37. Rolling
high for the year is $1.43 and low is 85c.

Resource Pacific's Newpac colliery has been producing semi-soft
coking coal since April 2004.

It has sales contracts for 100 per cent of its 2005 and 2006
production with six major steel mills in Japan, Korea and Taiwan.

Significantly, the volume of these contracts is expected to be
increased as Newpac's production levels grow as a result of the proposed
longwall expansion.

Resource Pacific chairwoman Carol Holley says the company's
results are in line with management expectations at the time of the PIO.

Mine production during the six months to December 31 generated
$8.5 million in revenue.

This result reflects only two and a half months of operational
activity from October 15 when the Newpac assets were purchased by
Resource Pacific Holdings.

After the IPO and associated restructuring costs, the company
recorded a loss of $330,000 for the half.

The full year, however is expected to be profitable, with
earnings before interest and tax rising from $290,000 in the first half
to between $700,000 and $1 million in the second half.

BACKGROUND
**********

Resource Pacific Holdings Ltd is a relative newcomer to the
Australian Stock Exchange list, making its debut on November 29, 2004.

Its key driver is the Newpac Colliery No. 1, an Australian-owned
underground coal mine located in the Hunter Valley region of NSW.

Newpac is a greenfield project which began operating in March
2001.

With a resource of 255 million tonnes of high-quality
semi-coking and thermal coal, Newpac is strategically positioned to be a
reliable, low-cost supplier to both the export and domestic coal markets.

Current production at Newpac will be up to 1.5 million tonnes a
year, with plans to increase production to five million tonnes a year.

Newpac is well located with respect to existing coal preparation,
handling and distribution facilities and utilities and
existing rail loading facilities to the port of Newcastle.

And it has significant reserves estimated to be around 255
million tonnes.

This is a substantial figure when compared to other leading
Hunter Valley producers.

The current mine planning has been designed to suit expanded
production with plans in place to produce five million tonnes per annum
within two years.

Newpac also has access to substantive infrastructure capable of
handling up to 15 million tonnes per annum.

Newpac's coal products are of high quality and therefore strongly
sought after by customers.

The mine has the flexibility to produce a variety of marketable
coal products including:

* High-grade semi-soft coking coal;
* High-grade export thermal coal; and
* Domestic thermal coal.

Newpac is strategically placed to be a reliable, low-cost
supplier to both the export and domestic markets.

Contracts are already in place to supply a large Asian steel mill
and the nearby Macquarie Generation power stations which supply almost 22
per cent of south-eastern Australia's electricity needs.

Macquarie Generation's main coal delivery conveyor is immediately
adjacent to Newpac's surface infrastructure.

Newpac's production is mainly exported to major Asian markets,
the dominant overseas customers for semi-soft coking coal and high grade
thermal coal.

Newpac has contracts in place with several major Asian steel
mills and power utilities to purchase the mine's high-quality semi-soft
coking and thermal coal.

Its first major export shipment was made in July 2001.

ENDS

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I don't hold RSP