here are my comments, originally posted on the ContiCoalers...

here are my comments, originally posted on the ContiCoalers site:

1."Our favorite stock for exposure to the recovery in the Thermal Coal price is Continental Coal (CCC AU, Mkt Cap: A$140m). It is ramping it's production to 1.7Mt pa in 2011, up from 63Kt in 2010."

I wish these GMP guys would do some simple homework, read the company announcements properly & give the correct figures!

The current MC (using: 3.6B shares+options listed on ASX, see page 3 of 3B notice appended to 20/12/2010 Penumbra ann.) is approx $270m at today's closing price of 7.5c.

Conti has had approx 6 months production from VlkVkfontein from June - Dec 2010 at about 100Ktpm = 600Kt. Plus 93Kt (73Kt export + approx 20Kt domestic) from Ferreira - see this report. So production figures from 2010 should be around 690,000t. (slightly more than 63Kt!!!)

These guys need a rocket! Where's Rodney Eade when you need him, or Ron Barassi for that matter? Not sure who the Canadian equivalent would be?"

2. "While it is good news that GMP are promoting the company, I find their valuation methods, poor data & results very disappointing, and inadequate. For example the 2012+ production figures only include VlkVk, Ferreira & Penumbra, with no mention of Vaalbank, DeWittekrans, etc. It is highly likely that we will see coal from Vaalbank and Dewittekrans in 2H 2011.

There is no mention of the 6 drilling rigs currently at work in SA which will upgrade and expand the current resource/reserve base. Also the 2012 figure for Penumbra is stated above as 213Ktpa, not the projected 500Ktpa: no explanation for a +50% discount on this production rate, esp. considering the company has out-performed it's own production targets so far with VlkVk & Ferreira.

The share issue figures are also wrong (see above comments), as are the cash at bank figures (shows $0 for 2010, which is ridiculous given all the cap raisings, cash flow from 2 producing mines & draw-down on EDF loans). The debt figures look dubious too. The pre-tax profit figure of $20m for 2011 is about half of what I estimated. The price chart for RB coal, which drops below USD100 in 2016 makes no sense either, given what we know about GDP growth in China/India & their trillion dollar spending plans on coal power plants & infrastructure, for the next decade.

Amazingly, there is no mention whatsoever of the Botswana leases (which could easily add 20c+ to the SP). And no mention of the fact that RB prices just hit $USD129! See this Chart.There are so many other errors & failings in this financial summary report, that I would be embarrassed to send this out to clients if I worked for GMP. Let's hope UK RenCap and the Aussie brokers do a much better job."