no witbank project, page-15

Guys, i have done some calculations. these are rough estimates and based on the best information i have. (please do your own research) Having said that, any numbers minded people out there care to comment on this valuation? i am ASSUMING (based on good info) CME have at least 50 mill tonnes of coal (the company have yet to confirm this via an announcement)

reserve 50 million tonnes of coal
(thats 7 Billion $$ worth of coal)
market coal price 120 dollars per tonne
extraction cost 0 (paying JV in options)
cost per tonne 20 cents
administration costs = initially, paid in options
market dillution 50% (they are issuing 100 mill options)
so 50% should cover the dillution effect of this

production capacity ????
say extraction over 25 years = 2 million tonnes per year
revenue = 2 mill * 119.80 (120 minus 20 cents) = 240 mill aprox
give this baby company a super low P/E of 5

new market cap = P/ E * profits
= 5 * 249 mill = 1250 mill = 1.2 billion

number of shares on issue 583 million

price per share = 1250 mill / 583 mill = $2.14

take into account all options and the share dillution then we get 1.08 (50% dillution)

so 6c --> almost 120 cents is a factor of 20 x

my questions: what is the extraction capacity of a big coal miner in africa
can they extract 2 million
if its 500000 tonnes then this is a factor of 4 less so its a 5x increase in share price
thats ok for a years waiting

so to conclude a conservative estimate CME could go to 30 cents short term based on 500000 tonne / year extraction rate and finish between 1.10 to 2.20 in a years time.

thanks for your feedback

huiz