City 1866 - had a bit of a dig in the S32 annual report. Looks like they had written Eagle Downs' value to nil. Not sure why SMR wouldn't acquire it for $1 to get off S32's hands and develop it over time if the coal price stays high. Interestingly, S32 (and the auditors) were valuing Eagle Downs on the basis of a long term coal price of less than USD$200 and exchange rate of AUD:USD of 70 cents (plus).
Also interesting was the over 1b tonnes of resource identified. That is a big pile of coal and while a lot won't ever be economic to extract there must be some value at some point......
There must be more to the story than I have identified - otherwise why not transact at a notional value. If nothing else, S32 can point to the fact that they are getting out of coal.
What am I missing?
Best regards,
BSP
SMR Price at posting:
$3.15 Sentiment: Buy Disclosure: Held
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