Been running the ruler over ATU and liking what I'm seeing. 1....

Been running the ruler over ATU and liking what I'm seeing.

1. Compelling geology and seam characteristics: extremely good quality coal and very shallow
2. Prudent capital management and low CAPEX requirements. Love how they're starting off with a smallish operation ($10M and $67M CAPEX in 2014 and 2015 respectively) and gradually building up production that may be organiclly funded in the later years if all goes to plan
3. Quality management team that really know what they're doing - I'm a mining engineer myself I've seen a lot of incompetent people running mining houses but these guys look like they are on the money
4. Compelling project economics: Assuming a production rate of 5.4Mtpa, all in FOB costs at $110/t and a $170/t sales price (significantly lower than the conservative estimate in the PFS of $194/t) im getting a pre-tax profit of $324M p.a. This excludes the potential of additional revenue from the super high grade anthracite that fetches between $1000/t-$1400/t of which management is keen to produce about 400,000tpa.

Funding and environmental issues/permits are usually the biggest issues with getting this type of project off the ground. I don't think funding will be an issue, even if we can't secure any debt for the initial capex outlays, a dilution factor of 20% (raising approximately $60M) would easily fund the CAPEX requirements for the next 2 years. However, I have confidence in management that they can avoid dilution of this magnitude and come to some sort of an arrangement with a banking house/JV partner. I don't see any issues with permits or environmental/indigenous groups affecting the project.