nervous nellies, page-26

$2 in three years would need a worldwide re-rating of any coal deposit anywhere in the world.
Botswana would have to have the infrastructure fully built and fully functioning with companies such as AFR and CIC running mkt caps in the 800 mill/1bill plus market cap. AND our resource would have to be as good as theirs.

Also all our production targets wouldve had to have been hit dead on time with CAPEX funding coming from non-dilutionary means. We would also have needed the MASHALA scrip issuing to occur at a much higher price to prevent dilution.

We would need the RB Coal price to be heading to 200-250 plus as well.

If everything from a business view point AND everything from a global view point went dead on perfect, 2 dollars would be possible, but you would NEVER, EVER set it as a price target for CCC. Most of our resources are smaller blocks of land thrown away by the bigger companies because they simply werent worth their time, there were then given to BEE firms who couldnt make them profitable. Our botswanan land is in a 3rd world, land locked country.

Dont get me wrong, for a company with a 200mill mkt cap and good leadership, this resource is beyond unbelievable. Its mind blowing to say the least.

For a company with a 7-8 billion dollar market cap, this resource is hideous, no matter how good managment are.

In 3 years a good rough guide I work to is about
2 mill export coal at 40 profit
5 mill domestic at 6USD profit
for a 110 mill operation profit. Because of further growth of Sth African assets still possible, we'll give it a P/E of 20 and say 2.2 billion worth for Sth African assets. Botswana assets we'll give a value similiar to CIC's T/O price of approx 400 mill.

Therefore as a really really really rough guide I would look at a market cap in the 2.5-3 billion as a rough estimate of where I would be thinking is reasonable for this company. Put about 4/4.5 billion shares on issue then (mashala scrip/ management bonues/ CAPEX etc) and 40-80c actually looks quite reasonable as a back of envelope calculation for the share price.

We may not end up producing 7 MTPA by 3 years but at the same time, the profit margin could well be 80 USD by that stage and we could have a higher % of export to domestic than I have listed here. Therefore anything beyond a really really crass/ basic calculation uses too many assumptions to be any more accurate than this basic musing.