soemthing is happening here, page-5

Citigroup upgrade to 2.28 on the back of the bid for Gloucester. Further upside to 2.70 with a 2nd longwall expansion

From Citi's report today

"Target price increased - the Newpac longwall is now through the commissioning phase and is operating successfully. Similarly, the wash plant is operating in-line with the design specifications. The recent bid for Gloucester Coal (GCL.AX - A$4.84; 2H) by Xstrata (XTA.L - £27.66; 1M) at a 20% premium to our NPV indicates that significant upside to the RSP share price remains. Our target price is increased to $2.28.
Production as expected - production for the March quarter was 508kt; slightly above our forecast of 500kt. Sales of 352kt were slightly below our forecast due to the ongoing loading restrictions at the port of Newcastle. Demand for Newpac coal remains firm with the entire product from the first year of the longwall production now sold through volume-based term contracts.

Development the main constraint - as noted in previous research, there will be a 2-month discontinuity between longwall panels 1 and 2 due to low development rates. The rate of gate drive development will improve with the introduction of new mining gear over the next 3-months.

Coal sector M&A continues - RSP's assets would be a tempting morsel to a larger coal player. Newpac is an operation with significant production upside and infrastructure that would provide synergies for surrounding mines. Xstrata's bid for GCL has set the benchmark with a 20% premium to NPV. Indicatively, our NPV for RSP is $1.98, increasing to ~$2.70 with a second longwall.