marben i think they have about $40M in debt as well but at least cash on hand is the equivalent amount and they are now cash flow positive. from their figures released they appear to be on a p/e less than 2 ( closer to 1 ) which even if coal prices were to fall more it still seems ridiculously cheap. as you said market cap now about $60m which is about a half the takeover offer value for WCI which is just an explorer and they have several hurdles to overcome if they what to become a producer. Extraxt from Proactiveinvestor site:-
Trevan's presentation also provided an update on operations at Cook, including the fact that the mine was now generating positive cash flow, and that Caledon had no funding requirements in the short to medium term. Cash on hand has increased significantly from AUS$15.6 million as at the end of June to AUS$40 million at 14 November. Production for 2008 is forecast to be 425,000 tonnes of coking coal and 75,000 tonnes of thermal coal from a total ROM production of 600,000 tonnes. Continuing ramp-up of the Magatar mining system should enable 1.1 million tonnes to be mined in 2009, leading to saleable coal totalling 765,000 tonnes of coking coal and 150,000 tonnes of thermal coal.
Current focus of attention at Cook was an on-going cost reduction strategy, coupled with completion of the new pit bottom drift to enable re-location of Magatar mining operations to the Argo seam. Planned capital expenditure would secure 4 new cars for the Flexiveyor continuous haulage system and allow the completion and commissioning of the new thermal coal reclaim system.
Trevan also pointed out that Caledon's market value at just 20 cents per tonne of resource was some 16 times lower than the value attributed to recent coking coal acquisitions at New Saraji and Teresa. With 468 million tonnes of resource at Cook and the adjacent Minyango, where a pre-feasibility scoping study has commenced, Cook was well placed for future growth via potential development of Minyango or further expansion at Cook.
CCD Price at posting:
28.0¢ Sentiment: LT Buy Disclosure: Held
