Coal is finished until the end of this decade. All the other coal companies like BND, SMR, COK, GUF, EER etc etc have a lot of downside in them over the next few years because price projections for coal are still well below the cost of production. Dilution is inevitable.
BND is a stand out only because it has $100m in the bank - this is a very valuable asset in a resources bear market. You will note that BND does not really trade at any premium to cash backing. The market has said that BND is only worth the value of the cash it has on hand.
So it doesn't matter whether these companies find JV partners now or later, the share prices of all coal companies especially exploration and development companies will be suppressed for years in my opinion.
I rather like the idea of a merger between CBX and MTE. It gives MTE exposure to a commodity that in my opinion is at the beginning of a multi-year bull run. Sure it may not be translated to a higher share price but it was in my opinion the best way for MTE to go forward.
As an explorer/developer in a commodity that trades and is likely to trade below cost of production or thereabouts for years the MTE Board of directors in my opinion have done the right thing.
DYOR into bauxite and especially about Indonesia and China.
The share price is what it is because Mathees Capital has and probably still is a seller - they seem to have either made up their mind that COAL is doomed short to medium term and/or facing their own financial problems hence the selling and continual selling lower and lower everyday.
Let's face it, the smartest guys in town (Glencore Xstrata) have said NO to greenfield coal developments for the short and medium term.
This in my opinion is the reality for COAL as much as it hurts me.
This is all just my opinion and acceptance of reality.
MTE Price at posting:
3.6¢ Sentiment: None Disclosure: Held
