opinions on mcc, page-8

I do believe that MCC is a strong company and will continue to increase earnings over time as semi soft prices increase and additional tonnes are sold due to Middlemount mine.

This being said I think that MCC's valuations are very stretched at present and I struggle to see how MCC will get to $13.50 (MQG target) in the near term.

In recent weeks management has announced that they expect 1H NPAT to be $30 - $38m.

This is expected to see annual profits increase to $60 - $76m (annualised) which equates to an EPS of $0.235 - $0.298.

Whilst I expect earnings will increase due to higher PCI price i do not think that they will materially increase over the next 6 - 18 months.

Over time MCC will export more coal but due to severe port and rail congestion MCC will struggle to increase its sales and have higher demurrage costs

Even in a bullish case where MCC increases its earnings to $100m (31% - 66% YoY growth) by for 2010/2011 it will only have an EPS of $0.354 per share.

At $13.50 this is a P/E of 38 and at $10.00 it is a P/E of 28.

I will be looking for lower prices before I increase my exposure.

For all those holding I hope that I am proven wrong.

Good luck to all!