BL - broker TPs have ranged from 56c up to $1.40 - however the...

BL - broker TPs have ranged from 56c up to $1.40 - however the upper range ones would be reduced quite a bit owing to the new share issues over the last year or so. Apparently Investec are putting together a report on CCC, so it will be interesting to see what TP they come up with. Investec have already been to view Conti's operations.

Any estimations depend on what kind of thermal coal metrics you apply. CCC have achieved a hedging price of approx $130pt for the Penumbra ABSA loan, which would give margins of approx $50pt. Domestic coal margins are around $7 a tonne, perhaps more for the Eskom grade stuff. I think the Ferreira margins are about $20 a tonne. Looks like CCC are targeting a producing coking coal operation in Colombia, so we might need to factor in HCC prices soon too.

A lot will depend upon Penumbra getting started mid year, on budget - so far so good (if not a year behind from original plan). Using Indaba Presentation figures, free cash flow pa of $23m

DeWitt - Using Indaba Presentation figures, free cash flow pa of $36m

Vlakvark - EBITDA of $8m Using Indaba Presentation figures

Ferreira - EBITDA of $10m Using Indaba Presentation figures
I understand that mine life here is likely to be extended for another 2 years, as per AGM 2011

so, post DeWitt & Penumbra completion - total = $77m pa * 74% = $57m

using a cash multiple of 8 = MC of $456m / 498m shares fully diluted**

= SP of 91.5c* fully diluted, or $1.08* undiluted

*post DeWitt construction

** CCCO option conversion proceeds = $38.5m

Con note debt $16m
EDF debt $10.9m

Undrawn debt facilities avail from ABSA - $65m

Cash due from VanMag $10m, from SIOC-cdt ~$20m (+ ~$10m further to be paid)

Cash on hand $11.2m @ 31 Dec 2011

other SA leases value? Vlakplaats/Wolvenfontein, DWC projects, Ermelo projects

Botswana value = who knows? I tend to think no value has yet been assigned to Botswana leases.

Colombian & USA prospects = who knows?

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this stuff is mostly off the top of my head:

My feeling (wishful thinking?) is fair price now = 50c

75c post Penumbra completion

$1.10 post DeWitt completion,

plus an additional 25c if CCC can prove up 2bt of decent coal in Botswana.

IMO Vlakplaats is worth at least 10c if PFS numbers are good.

Vaalbank JV with Total has previously been mentioned - so that could be a wild card

Colombia & USA might be good SP catalysts - but they might also be non-starters, who knows?

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With the new board appointments I'm more confident than ever that Conti can achieve its goals.