My take on the situation is that if 100% of our company is...

My take on the situation is that if 100% of our company is valued at $163.7 million (Current market cap) - How the heck would we ever be able to offload 40% of Mahalo for anywhere near to what our BOD and indeed us shareholders feel that it is worth – not a chance. This leaves us with one viable option moving forward – remain in Mahalo right the way through to production whereupon we should be valued on a P/E ratio basis with yield being what underpins and determines our market cap at that time – a ‘no brainer'.

As to the new block next door at Mahalo North - good news and exceptional timing as it sounds as if we will be able to fast-track this through to production at about the same time as Mahalo - providing the shallow coals are indeed a continuation of the same productive coals in the Mahalo Block with us having 100% equity in this new block. There will of course be costs associated with fast-tracking this through to production and I look forward to hearing what arrangements will be made to get us to this point with regard to funding options. Borrowing? Percentage give-away/farm out? Issuance of more shares/capital raise? Combination of the aforementioned?

Back to our current market cap:

When interest rates are historically low – those managing collective investment vehicles or indeed individuals with funds to invest tend to buy into ‘yield’ rather than what is seen as being risky non income generating investments with capital growth being kept in check by those trading shares for short term gain.

None of this would be a problem if we were a Private Company because shares would not be available to be traded with net asset valuations being calculated on company specifics and industry averages – rather than being a PLC where we are at the mercy of the small percentage spinning shares over trading the volatility and making the market cap - thus the position in which we find ourselves.

The time to reassess is when interest rates rise above the average yield being achieved by Blue Chip companies – at that point there will be the inevitable mass exodus of money from the markets as ‘yield chasers’ switch back to the banks. It will be then that the market cap of those Blue Chip PLC’s free-fall resulting in another serious market correction.

Until then – and I can't see interest rates rising dramatically in the short to medium term - we keep on adding value moving ever closer to production at Mahalo and with a fair wind at Mahalo North and Galilee once we know the results of the future flow test - knowing that once we move to production it’s a 'game changer’.

Just my thoughts…