As a shareholder, I went to the Malabar AGM yesterday. NHC owns...

As a shareholder, I went to the Malabar AGM yesterday. NHC owns 15% having invested earlier this year. At the meeting NHC CEO Rob Bishop was elected to the Board.

In my view this was a very prudent investment by NHC. It is a great asset with premium thermal and coking coal. In terms of pure financials, on very conservative assumptions, I think NHC will receive a $50m+ dividend per year from about FY27. Not bad on a $95 million investment.

That sort of $$ amount is not material for NHC, but there is significant upside and optionality that may mean over time, this asset becomes a hidden gem. E.g.:
* Additional exploration rights held by Malabar could increase production materially
* It is located over the back fence from BHP's Mount Arthur. I know BHP have publicly stated they will close that mine in 2030, but over the passage of time, there could well be a play for part of this asset
* The mine is just down the road from Bengalla, and during the meeting they mentioned some knowledge sharing and resource support
* NHC could increase its stake at some point (as it has done with other assets such as Bengalla in the past)
* Other neighbors are Liddel and Bayswater power plants, so there are emerging opportunities to use the 89 square km of freehold land they own to develop solar and renewable energy and link into the grid

By the way, first sales from this mine is expected in 1st quarter calendar 2023, so there will be an additional 600K p.a. volume coming on to the market (better spec than 6000KCAL Newc). Will ramp up to 5-6 million tonnes (mostly met coal) over the next 4 years.

A slow burner, but all very promising in my view.