very under-rated coal stock

I'm a bit unsure why EOC hasn't generated more interest on hotcopper.

I bought in a week ago and added to my holdings today, as I think it's got the potential to be a fantastic up and coming coal producer .

The MDS and Inderi planned mines at the moment don't have a huge resource, but they will both generate a fantastic cash-flow which can help fund future mines very quickly.

Check out the mining companies' next door as well.




Using Xstrata's Q1 production figures, their thermal coal contracts were just shy of being priced at $130/tonne. I researched Xstrata because of Endocoal commenting that the coal quality is similar in quality to the neighbouring Rolleston mine.

(http://www.xstrata.com/media/news/2011/05/04/0800CET/pdf)

1.5 mtpa * ($130-$42) = $86 million NPAT (tax being 35%, including payroll tax and some carbon tax as well) From Meteor Downs South.

That production starting mid 2013 (scheduled to commence here) can fund some pretty aggressive mine expansion.

Additionally in 2014 Inderi should be set-up and be producing another 1 mtpa on top of that.

The $42 F.O.R costs are averaged out for both mines I believe, so the Open-cut costs @ MDS should be less than that.

$65 million CAPEX combined for MDS and Inderi is fantastic. No doubt EOC will have to search for some funding for that, but with mine construction for MDS only taking 1 year, by the end of the first full year of production that $65 million cost (and any interests involved with a credit/debt facility) will already be paid off already. I'm assuming EOC would take the credit/debt facility path, as $65 million would be too step too raise capital- I'm sure the company is aware of this!

Rockwood looks extremely nice as well, I particularly like the comments from the JORC announcement "The occurence of some seams at relatively shallow depths suggests open cut extraction may be possible in some cases" and "Coal sampled and analysed to date exhibits higher rank, lower volatile characteristics. Further detailed testing and assessment will be required to determine the best marketplace application for this coal".

The drilling at Rockwood has only just touched the surface as well! Look at this map



The JV with Carabella looks to be a fantastic deal as well- Carabella have already JORC'd coal adjoining the tenement, and very much remains a keystone project for their company!

Anyway enough of my bullish-ness, the main reason I created this thread was to generate some interest/discussion.

It's pretty clear to see i'm very bullish on EOC, or else I wouldn't have been purchasing my first 2 parcels in the company over the last week! I'm very impressed by Endocoal management so far.