In reference to some discussion which I missed over the weekend, I add the following.
The comparison of "band wagon" GLX is more appropriately likened to should be this majro project;
http://www.monashenergy.com.au/
(a very impressive partnership between Shell + Anglo American which adds to the credibility of these projects)
There have been references to it by Merrill Gray in interviews and basically mining the brown coal is what is beeing done (or to be done) in both GLX and Monash Energy.
Irrespective though, I believe there is a chance that Underground Gasificaion is still a possibility and it depends on the gasification results from the coal.
When I speak to Merrill, the one thing that strikes me is that there are no fixed agendas on this project. There are many ways this cat will be skinned, and It appears IT WILL be skinned, namely, here are some variable that will drive this project to success;
1. The resourse (size, chemical composition, gasification options) will determine the best way to tacke the project which will be known in the coming weeks/months as indicated on the announced project schedule.
2. Negotiations of off take agreements may bring about chances to allow energy suppliers to provide their own capex and just pay for the feedstock off GulfX. Lower return, but a quicker and safer way for income.
3. The CAPEX is still "in the money" with sales at a incomprehensibly low sale rate of $60+ per barrel. Even at $100 the margins are incredible. If we forecast $150 or $200, this is enourmous.
Linc Energy was in a great position at an $80M Market Cap in 2006 for the project and there is still great upside there, but I still like the prospects of GLX beeing able to reach a $100M Market cap in the not too distant future which should translate to a share price of around 50c, options 30c. If the BFS comes up trumps and they secure funding via well respected partnering, there is no reason why this project would stumble.
Just my thoughts anyway.
GLX
gulfx ltd
