ASF Obviously with the price of coking coal dropping with iron...

ASF

Obviously with the price of coking coal dropping with iron ore, CLR was in the short term going to drop significantly. Combine that with Wavenet (substantial shareholder) having its own issues and having to off-load shares, short selling and now some index fund managers will have to off-load CLR to rebalance their indices. Very short term there is some more pain to come however the share price can only drop a bit further before the market cap will be lower than the company has cash at bank.

Those short term issues aside CLR won't need to capital raise for 12 months and is one of very few independent companies to have a tier 1 coking coal asset. If prices for CLR stay this low for much longer I really can’t see a takeover as being avoidable as a major will simply pick it up cheaply and shelve it until the price of coking coal rises.

What I don't understand about your comment is reference to EOC. I hold both EOC and CLR - unlike CLR though, EOC has an asset which has very low capex, very low opex (strip ratio of 5.5:1 ) and it should begin production in around 12 months. Even if today’s low prices of thermal coal were to remain the project would still be making roughly $40M pa in gross profits for 7 years. Regardless of the macro-economic environment MDS will be developed by someone as it is small with higher margins. Ddzx agrees with this by the way - his criticism is of the EOC’s Rockwood asset.

I am the Iceman!