moving the goalposts, page-17

I don’t have an agenda, I have an interest in UCG and Linc are one of the few publicly quoted companies involved. I have no shares in Linc but this isn’t out of any principle but because
a) I understood their commercial strategy to be completely aimed at a large FT plant and consider that to be a needlessly difficult, high risk strategy which may well not be financeable.
b) I am concerned that none of the directors appear to have any continuity back to the trial burn, nor do their biographies give any sign of previous interest in UCG. For all intents and purposes it seems a completely new startup company, trying something completely new to them merely inheriting the name and site.
c) To mitigate (b) the prospectus made a very big thing of the guidance and expertise of Ergo – who not only represent trial-burn continuity but also seem to have a finger in much of the Western UCG activities. Then that falls through and suddenly the tune changes.
d) Recent (30th Aug) equity line of credit. A sign of desperation.

For now these are sufficient to rule Linc out of my portfolio, but I’m quite open to changing my mind should their progress convince me and the price is ok.

On the positive side, their main site is one that has proved suitable and I do quite like their MOUs. And I also like what I perceive as their change in strategy (it addresses objection (a)) for all that I find it a highly amusing about-turn in the circumstances.

Thanks for pointing me to the prospectus – I see 2.3.1.2 now and it does temper my earlier criticism.

But on the other hand, I’ve just reviewed both presentations on their website. Power generation gets a 1 slide ‘may’ in the first, none whatsoever in the second. And page 13 of the first lists the “Stage 1” actions from 2.3.1 – with power omitted.
And the boardroom radio interview – not a whisper of power. “Linc is a focussed coal to liquids company”. Resource companies are notorious for a relaxed attitude to schedules, but I also note the demo plant was aimed to be up and running for May 07 (but was ahead of schedule so Q1 07) and the large facility seriously commenced by end 07.

For all that I now see it’s in the prospectus I still think it a fair view that this is a significant change in public strategy, and there’s a reasonable chance that we’re seeing the first flush of the old mining company project switch. Albeit from a strategy I don’t believe in to one I do find credible!