I'm just looking at the math on this.If we look at the...

I'm just looking at the math on this.


If we look at the worst-case figures:

Resouce = 50m tonnes

Cost of extraction = $20/tonne

Freight = $14/tonne

Price at Chinese border = $60/tonne

Now crunch some figures:

Estimated profit per tonne = 60-20-14 = $26/tonne
Estimated profit for resource = 26 x 50m = $1.3 billion

With current number of shares and options at 582m (ie. fully diluted) this works out to be over $2 per share.

Don't get me wrong, I'm not saying this is the SP valuation. That would depend on how quickly the coal can be extracted and sold - if we knew that we could then approximate the annual profit from which we could obtain a price per share using a suitable P/E ratio.

The point is that this minnow with a MC of under $10m is staring at a resource worth $1.3bn (after expenses). No wonder the share price didn't pull back much yesterday and the close was strong - the big boys are doing the sums!