my view on continental coal, page-11

Certainly.

There is around 372m shares on issue and I am not to sure if the recent placement is included in this.

In any event in Indian Co paid/offered $370m for 5/6bt of coal in Botswana and CCC has 6/7bt base on the Indians offer the 6/7bt would be worth around $437m.

If there are 372m shares on issue and the Botswana project had the above mentioned value you would expect that to equate to around $1-18c per share. But hey say it was only woth half of that at $0-60c a share.

Currently the company is export around 2mt of coal and has two new mines coming into production plus the recent acquisition. The directors are pushing for 7mtpa of exports or sales. At current prices of US$110pt that equates to future revenues of US$770m at todays prices. All information at hand is predicting a major increase in coal prices and it is my opinion coal will head past the last high of US$160pt over the next 6 to 12 months giving CCC revenue in excess of US$1.1b on 7mtpa. This figure will more than likely increase as new mines/acquisitions come on line. It is the Directors goal to have one new producing mine per year.

If you take 7mtpa at a nett profit of say US$20pt that will give you US$140mpa or $0-38c per share in earnings. Obviously only estimates.

So what are the PE of coal companies? Even if you took at 3 times earning 3 x 38c per share is $1-14c in value per share plus Botswana at a discount of $0-60c per share you are looking at around $1-75c per share at a minimum.

Therefore I believe CCC is grossly under valued and is a definite BUY/ACCUMULATE and hold.

That is my opinion.