jorcing ctps coal: a move from hype to value

Hi All,

I have been rather quiet of late, sitting back watching the various posts develop on here with quite some intrigue, and even a little bemusement. It would appear that lines are being drawn, plans being made and dies being cast in the lead up to Surprise-1 and after Johnstonne West-1. Oracles are beginning to emerge like with every imminent/current drilling campaign, some are trumpeting the ecstasy of possible success, the others championing the demise of this small cap junior given failure. These are largely up rampers and down rampers who focus specifically on objective polarity rather than the analytical middle ground. Moreover, the up rampers seemingly have no contingency should their perfect ideology shatter, nor do the down-rampers suggest constructively how the fall-out could be best dealt with, not what their opinions are about moving on. Surely they must not believe the company will collapse into bankruptcy and disappear into oblivion? So what is the plan?

For me, I am generally taking heed of all events, making prudent fiduciary moves as the share price moves in either direction to protect my overall position. I am obviously still involved in this company, 5 years down the track, hence I believe in the story. I would be lying though if I said I was not suffering a severe case of annoyance at the epic nuisance the drilling process has provided. What I refuse to change though is my belief in the basic geological premise on which attaining these tenements was based in the first place. Instead I focus on how best to utilise every twist and turn for my benefit (even if the short term provides more bumps and negativity).

That said, what of my plan? I believe that Surprises worst result will be no oil whatsoever. If PSI, AI99 and others are correct in their opinion that Surprise will lack appropriate fractures to enable flow, then we will have the overall scenario whereby CTP has two oil wells, 8kms apart with similar sizes (at an estimate) of oil shows, but no commercial find to speak of. What this tells me specifically is that the premise remains that the Amadeus and the source rock does in fact bear oil, and you would imagine that a sweet spot does in fact exist. I am certainly no geologist, or expert, however enough literature has taught me that successes vary between minor and major. Two significant oil shows would encapsulate a minor success. They warrant further exploration, and justify the whole idea to an effect; as this oil must have come from somewhere, and it would be valid to continue looking for this source.
Okay I am getting to my point. I am of the opinion, based on this information, that there is a future beyond Surprise, even if there is no flow. Sure, it elongates the time-frame into uncertainty, however I have waited 5 years, and I can wait more. However I justify this position as my eggs are NOT all in one basket, so-to-speak. Taking basic risk management into consideration, I have other investments to cover this one, and even though it would be prudent (and likely) that some level of selling would occur (to decrease exposure), it would merely be to free up funds for other investments. To those who will retort by accusing me of being exorbitantly wealthy and capable of attaining such a loss, I say to you that wealth has nothing to do with it. Portfolios of investments should always take risk into consideration, and as CTP is in the highest risk category, without a producing resource of any description, then it should at most provide a very low fraction of your portfolio whether it is $5,000 or $5,000,000.

The crude dream remains, and we have much more to explore. 3d Seismic may entice new investors and facilitate further drilling, even with billions more shares and dilutions. If that makes me money in future, cest la vie. Given an oil discovery, even little, money WILL be made. This is an unescapable fact. Yes dilution makes companies less attractive to institutional investors (hence St. Barbaras consolidation), however who cares if it ensures survival to the point of a major discovery? More to the point, who says it has to be the oil?

This leads me to explain more pertinently, the title of this (now grossly long apologies) post.

The coal is better known now than it was when we discovered it earlier this year. People talk about it as something of an unknown potential, but most are extremely confused as to its quality, its potential and its usefulness.

I am one of those people, and through the many convoluted announcements by CTP in attempting their version of public relations and advertising, I know the tonnage they are talking about, but little else. They have made it somewhat clear that the shallow volumes would be ideal for open cut mining (that is to say depths from 200-300m) and the deeper seams for UCG or a CTL plant. There was even a description of which amounts were at which depths if I recall correctly, however do not quote me on that last one. In any case, I clearly dont know much. You know what? I think that is the case for the majority if I may speak on behalf of you all. More worryingly, it is also unclear for new investors and possible JV partners.

I advocate a solution. JORC.

The JORC Code is now pretty well known amongst a wide group of nations involved in mining exploration. Significantly, this is the criteria that the ASX requires in order to verify findings of solid mineral and ore discoveries. JORC is the minimum standard and to quote JORC themselves:

"...ensure that public reports on these matters contain all the information which investors and their advisers would reasonably require for the purpose of making a balanced judgement regarding the results and estimates being reported. It achieves this by:

- establishing and prescribing the minimum standards for public reporting of Exploration Results, Mineral Resources and Ore Reserves in Australasia;
- setting out a system for the classification of tonnage (or volume) and grade (or quality) estimates as either Mineral Resources or Ore Reserves and for the subdivision of each into categories which reflect different levels of certainty or confidence;
- specifying the qualifications and experience required for a Competent Person;
- setting out the responsibilities of the Competent Person and companies' Boards of Directors with regard to reporting of Exploration Results, Mineral Resources and Ore Reserves, and
- providing a summary list of the main criteria which Competent Person(s) and others should consider in the course of preparing reports on Exploration Results, Mineral Resources and Ore Reserves."

JORC provides 4 categories: Indicated, probable, measured and proved. Qualification for each level of JORC is dependent upon different levels of knowledge and analysis done by a so-called Competent Person registered with JORC and the ASX. If you want details of these levels, I am happy to post them, so let me know. Otherwise you can find them on the JORC website: http://www.jorc.org/

Getting to my point, after we conduct the next 4 drills in the Pedirka to explore the extent (of not whole) of our coal resource, I see it as the only plan to have a JORC representative and competent person analyse the resource and at least put us somewhere on the list. Even with an indicated resource (being the lowest level of proof and knowledge) people will be drawn at LEAST to watch how this develops in future, and it gives potential JV partners something to go on rather than purely the results of the company itself. It securitises the results and adds credence (though I am not implying in any way that the company is massaging figures at all) to any results which may come from the latest round of drilling. As we gain more information from further testing, and we move up and across the JORC matrix, we now can actually be VALUED by analysts and other companies. The share price could JUSTIFIABLY appreciate in value, even with a failure to flow at Surprise. But most importantly, if we land a JV partner out of this, it is entirely likely that they would not only take on the coal, but the oil exploration also. Such a massive investment in the coal would indicate that this company is rather large, and probably more than likely to be interested on multiple levels.

In any case, it wouldnt HURT CTP to have this JORC in our resume. I know personally I will be pushing hard for it as this will give CTP some life after a possibly failed Surprise drill no....wait, call it contingency, as I do like to be positive :)

Anyhow, I throw open the floor to comments, criticism and general discussion! If someone has a better way to secure our future based on the one resource we know we can sell (even if the time-frame is frustratingly long), please post it and I will look into it also!

Thanks for taking the time to read guys! I appreciate it as always.

RB