Green Iguana,Thanks for that link. It’s difficult to get...

Green Iguana,

Thanks for that link. It’s difficult to get up-to-date information. I had older information that phase 4 of the Majubu UCG project (350MW IGCC) would be completed in 2011. It looks like they are encountering some problems if they now intend to aim for 40MW by mid 2013.

SSKim,

Yes, coal mining employment is a factor for Eskom. However, the electricity market in South Africa is in a shambles at the moment. Power prices are rising 30-40% per annum and there is massive shortfall in electricity generation. This is a much bigger political problem for Eskom and its government owner. They need power and they need it now. Remember also that Eskom is one very very big government monopoly. A 300 or 400MW UCG power project would be a small component of Eskom’s generation portfolio. I think the delays are technology related rather than political. Eskom gives away free energy to the poor. If UCG could cut their production costs and also demonstrate a willingness to address climate issues, I think they would jump at it if it was ready.

Re the bigger question you posed…

“…No one has in fact taken the next step (which is a hard one) and compared the current market cap of CXY (and where we are in the journey) with the others and stated anything about the fact that CXY is STILL vastly undervalued comared to these. I know its hard but thats the real question answer hehehe.”

I presume you are referring to the Sep 09 Pattersons Report that stated that Cougar’s contained energy was undervalued compared to its peers.

http://www.cougarenergy.com.au/pdf/Patersons_research_note_22_September_%202009.pdf

They compare CXY’s implied $/GJ (3P) of 1.5 cents to LNC’s equivalent of 6.9 cents and conclude it is undervalued. For simplicity, I've left the CNX numbers out.

IMO, it was pretty weak analysis by a conflicted broker that was lead manager during CXY’s recent placement. Update the figures for the CXY share placement and the rise in LNC share price from 1.38 (used by Pattersons) to its current 1.76 level and the revised figures are 2.1c for CXY and 8.9c for LNC. Note: I used market cap rather than enterpise value as I was too lazy to seek out and deduct cash levels for each. It doesn’t affect the result much in any case.

Now assume LNC secures around $625m from the sale of all three of its tenements. I think thats a conservative figure considering one tenement had a $1.5b figure attached to it at one time. Tenement(s) sales of $625m would bring the $/GJ of contained energy for LNC down to the same 2.1c figure that applies to CXY. Tenement sales of $720m would leave LNC 50% undervalued compared to CXY.

Hence, I do not think CXY is vastly undervalued as you say once sales of non-core assets are taken into account. As Poyndexter said the other day – we are all studying the form guide. My interest in CXY is to determine whether it has a potential leg up on the others from a technology perspective. That is the means of closing the gap between UCG and CSM (which is much more significant than gaps between individual UCG players).

Please check my figures as I'd hate to think I was invested on mistaken analysis.

Unless there’s some outrageous comment, this will be my last post for a while. I've probably overstayed my welcome and should go back into my hole and continue reading.

Have a good one.

Cheers

Bleasby