Took them a while but finally got a note out on CLR (this mob...

Took them a while but finally got a note out on CLR (this mob did the last raising)

http://www.carabellaresources.com.au/Investors/BrokerReports.htm


An initial indicative valuation, based on the open cut option, values Grosvenor West at between $2.79 and $3.20 per share. This valuation is based on long term coking and thermal coal prices of US$200/t and US$95/t respectively, an A$/US$ exchange rate of 0.85, capital cost of $1.0bn and operating cost (including royalties) of approximately $126/t.

This valuation excludes any value for any inferred resources at Grosvenor West and is based on a mineable resource of around 85Mt and a mine life of 20 years. It also excludes current cash and any exploration upside from the company’s other exploration tenements.

It must be noted that the valuations are highly sensitive to coal prices and exchange rates. We estimate the impact of a 10% change in coal prices on the Grosvenor West valuation to be around $330m or $2.33 per share, while a 5c change in the exchange rate has a ~$195m or ~$1.38 per share impact.

Based on the above, Carabella is trading at a significant discount to our valuation - we retain our BUY
recommendation.