I think the point chillam is trying to make is that STX is a higher risk stock now it is focusing almost exclusively on the Cooper coals. The risk is to the upside - I can see this as one of those mythical ten baggers if these coals flow well - and to the downside obviously.
I have no problem with small explorers putting all there eggs in one basket. Especially, when the basket is as prospective as the Southern Cooper Coals. If I want to hedge/minimise risk, I can do it through adjusting the composition of my portfolio.
I much prefer what STX are doing to NSE, where management are diversifying away from WA shale into a mature shale field in the US. Diversification is often just a way of slips rolling in as long as possible.
Carnergie and Wrench are rolling the (loaded) dice, and I am happy they are doing so. Investors just need to be aware of that nothing is certain in life. The gas for Australia has to come from some where, other Cooper players (ICN, AQO, BPT, SNX, DLS) are a natural hedge...at least for STX. I hold nearly exclusively oil and gas shares. I really should be diversifying across other sectors. I would recommend this to my friends but don't follow my own advice :-)
STX Price at posting:
14.0¢ Sentiment: Buy Disclosure: Held
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