On top of this, it got a buy rec of $5.32...An article and...

On top of this, it got a buy rec of $5.32...

An article and speeding ticket reply below...

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Haven sought from soft commodities Barry FitzGerald
October 17, 2011
.Small pure coking coal plays such as Carabella Resources are looking ripe for the picking.

THERE has been further confirmation in the past couple of days that when you look across the broad range of resource commodities, coking coal is the place to be to protect against the softness being experienced by the rest of the pack due to euro-zone debt concerns.

UBS has upgraded its near-term coking coal forecasts by 3-10 per cent (its forecast for the first quarter of next year is now $US230 a tonne), citing a combination of labour disputes in the world's main source of supply, BHP Billiton's Bowen Basin mines, the threat of another big wet there come December, and general global production constraints on the steel-making raw material.

And before that, we had BHP's chief executive for ferrous and coal operations, Marcus Randolph, telling a steel conference in Paris that BHP was more bearish about iron ore than coking coal.

Advertisement: Story continues below ''Between now and 2020 there is going to be a lot more iron ore supply coming into the market than coking coal and our expectation is that of the two, the scarcer over that period of time will be coking coal,'' Randolph said.

Garimpeiro's interest in all that is what it means for ASX-listed companies with coking coal exposure. It is an industry dominated by the big diversified resources groups such as BHP, Rio Tinto, Anglo American, Xstrata and Peabody.

So, while supply growth in coking coal over the next 10 years or so is expected to be more scarce than that for iron ore, pure coking coal plays on the ASX are even more scarce. Rare, you might even say.

That's why the few that are out there are constantly said to be takeover targets. Last year's coking coal float, Carabella Resources (ASX: CLR), is a case in point.

In recent months the takeover talk surrounding the company picked up on the revelation that Gina Rinehart's Hancock Prospecting - which has it own big-time Queensland coal ambitions - had picked up a no-need-to-disclose stake of 0.74 per cent in the company.

The announcement by Carabella of the Hancock presence was all the more interesting because it closely followed the resignation of Carabella's tough but well-regarded managing director, Mitch Jakeman, due to that wonderful catch-all reason of ''irreconcilable differences'' with the board.

The only light on that was in a story on Jakeman's departure by The Australian Financial Review's Dan Hall, remembering that Jakeman was formerly head of Anglo American's Queensland coal operations.

It quoted Carabella chairman Andrew Amer: ''[Jakeman] is a serious miner of large multi-site mine operations for a large global mining company and obviously he is used to getting things done; but this is about a management style that is suitable and an interaction with the board.''

Whether, as some suspect, Jakeman's departure was because he was keen to court offers for Carabella while merger and acquisition in the coal sector remained hot, we may never know. But, as they say in the classics, that's history now, with Carabella announcing last week it had a new managing director.

He is former Melbourne boy Anthony Quin, with the one ''n'' in the surname providing a welcome distinction from the Mexican-born American actor who did a good job of playing a Greek - Anthony Quinn.

Quin does not have Jakeman's hands-on, coal-face experience. But he has a commercial background that includes the best training you can get for a company like Carabella with its aspirations to be a Queensland coking producer. That training was 14 years with BHP, the last two as chief development officer of its coking coal business - the world's biggest.

He is not commenting on the recent management spill. ''My focus is on where I will take this company in the future. I've

seen a lot of coal opportunities in my previous life and I really like Carabella. It is a very exciting company,'' he told Garimpeiro on Friday.

Naturally enough, Quin reckons he has ''strong alignment'' with the board in terms of strategy and where the business is going. ''We have a real focus on building this company and think the real attraction is the asset base, and the opportunity that presents itself currently in the coking coal market.''

Quin reckons that if you want a successful company, you have to have a good resource. He believes that Carabella has got that with its Mabbin Creek project in the northern Bowen Basin, which sits hard up against mines operated by others in the region with all the attendant infrastructure requirements.

Mabbin Creek has a broad exploration target/potential in the order of 500 million tonnes but hard numbers on the stock are currently based on the 95.3 million-tonne coal resource outlined on the Grosvenor West property.

It is a high-quality coking coal and an update on the resource is expected by the end of this month. Exploration is under way at eight targets to add to the overall resource base, a proportion of which is bound to be thermal coal.

A concept study of the development of Grosvenor West will be ready in December and, assuming it all looks good, Carabella can be expected to get going on a bankable feasibility study in January.

It's a little early to make a call on where it will all end up under Quin but it is worth noting that one of the brokers that has followed the stock since listing, Intersuisse, has a ''buy'' recommendation on Carabella and a $5.32-a-share valuation after Quin's appointment. Carabella on Friday closed at $1.675 a share.


Read more: http://www.smh.com.au/business/haven-sought-from-soft-commodities-20111016-1lrfu.html#ixzz1b0ZEr3Zr

http://www.smh.com.au/business/haven-sought-from-soft-commodities-20111016-1lrfu.html



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Carabella Resources ("Carabella" or "the Company") notes the article on p.20 of today's Australian Financial Review which refers to the Company having established a data room.
Carabella can confirm that since listing in late 2010 it has received several unsolicited expressions of interest in the Grosvenor West coking coal project. Consequently, a data room has been set up to allow a select group of interested parties to access information under customary confidentiality arrangements.
Due diligence investigations have commenced only recently. At this stage, it is not certain what form of transaction will be proposed to the Company and it is also uncertain whether an acceptable transaction proposal will be provided by the interested parties.
Carabella can confirm it is in compliance with the listing rules and, in particular, listing rule 3.1.