Valuation & RecommendationWe are initiating coverage on PRC with...

Valuation & Recommendation
We are initiating coverage on PRC with a short term BUY, long term BUY
recommendation. Our current valuation of A$0.97 is based on a Discounted
Cash Flow (DCF) as to is our 12 month price target of A$1.05. Our price
target includes the possible upside to our numbers on hard coking coal
pricing although still recognises the risks associated with mine development
and production. Confirmation of higher contract prices, cost containment
and demonstrated production success at Pike River are certain to lead to a
re-rating of the stock on industry based cashflow multiples.