This was also in the report-I LIKE THE NUMBERS IN LAST...

This was also in the report-I LIKE THE NUMBERS IN LAST LINE!
Existing Scoping Study to be upgraded in the Pre-feas
Coalspur expect to complete is Pre-feasibility study by the end of Calendar 2010. The focus
of the study will be the expanded and continuous resource now available for a much bigger
operating mine. The synergies should be substantial, with low strip mining along strike
possible for much longer before operations need to go down dip.
Wardrop Consultants will conduct the pre-feas, having recently concluded the Scoping
study. Without the expansion synergies the economics of the Vista (formerly Hinton)
project are very attractive, with capex of US$255m (or ~A$300m compared to our previous
estimate of A$400m) for a 4Mtpa thermal mine and average operating cash costs over the
life-of-mine (LoM) of US$48/t.
On Wardrops base case assumptions of 7.4Mtpa ROM and 4Mtpa saleable (a 54% yield
compared to our 51%), using a truck and shovel fleet, LoM strip ratio of 4.65, and an
average LoM coal price of US$87/t, the mine will produce pre-tax cash margins of $150m.
On our much lower coal price assumptions, we estimate that Vista will produce about $80m
in free cashflow per year (our preferred measure) at full production.
We now expect (though we have not yet incorporated it into our modelling) that Vista is
likely to be an 8Mtpa saleable mine, a doubling of production but at probably a less than
doubling of capex to $500m. Running this scenario results in our valuation increasing to
about $1.40 per share.