CNX seems to have a long history (by long I mean from 07 onwards since it purchased CSIRO technology) of consistently hitting its long held support line which currently lies around the 33- 34 cent mark. It seems to me that the current SP is bouncing along this support line due to the unfortunate fact that Cougar Energy has been passed through the ringer by way of the media.
There are currently two trains of thought.
1. That UCG is destined for the dustbin of history because of the media hysteria surrounding the reporting of inaccurate bore samples
or
2. That the media reporting is well overdone and that UCG is a safe and efficient way of producing energy.
From my perspective, the next month or two is absolutely critical for CNX. And the news will come in two stages, that is, when DERM give the environmental O.K. for CNX to continue its trials (for which I have no doubt) as Cougar have shown that the detection of benzene and toluene were due to a laboratory error, and the successful production of electricity (for which I have but only a little doubt) when panel two is fired up.
The SP has shown an historical bent to rise in a sharp fashion, and I feel that the current situation will prove no different.
Patience is required until the environmental go-ahead is given, and electricity is produced. If CNX can do this, it is blue sky from there on, and the media hysteria about Cougar will be forgotten.
CNX Price at posting:
34.4¢ Sentiment: LT Buy Disclosure: Held
