Quite right. A $150 MCap is beyond silly when just the new longwall they installed last week cost $90M. There's still 500 MT of coking coal in the ground and huge amounts in equipment and capital works that are currently operational. And they will be shipping more than 1 MT coal this year at >$150/T despite all the disruptions from the expansion project.
I suspect that since output expansion is a long and capital intensive process this gives the opportunity for short sellers to beat down the price over an extended period and drive the non-professional investors to despair.
Anyone buying now have to factor in (1) carbon tax (2)interest payments on capex loans and (3) lower coke prices if China slows.
I believe that GNM will make good profits even with the full effect of all three factors above. We will have to wait for 2013 for to see the light though.
GNM Price at posting:
15.0¢ Sentiment: LT Buy Disclosure: Held
