MM, makes some interesting observations.CLR to me seems to...

MM, makes some interesting observations.

CLR to me seems to represent LT value at these levels for a number of macro and company specific reasons.

At a macro level there is a structural shortfall of coking coal production coming online given the documented Chinese 5 year plan for steel production (683mt in 2011 to 969mt in 2017). This would appear to be in stark contrast to the market sentiment for the sector in general at present.

Mongolia mines have been touted as the next big thing but have many many infrastructure (no rail) and political hurdles to overcome. Moreover, the will only cater to steel mills in far west and northern Chinese provinces in the years ahead. They can't export elsewhere under US$300/t and therefore will be forced to take a big haircut on sale price to their captive audience.

At a company specific level, I think Helmsec's recent analysis suggest that they are pretty close to the insider thinking of the company:

http://www.carabellaresources.com.au/_literature_77478/6_February_2012_-_Helmsec_Research_Report

Additionally, UBS were bought in as corporate advisers. They specialise in takeovers and will have been involved in managing the dataroom (as per what was reported).

Looking at the currrent market cap of CLR combined with the required $800M capex against the recent decision (Jan 2012) by BHP Billiton to approve the $US4.2 billion expansion at Caval Ridge to gain an extra 2-4mtpa of production, you'd have to think someone from "inside industry" could find CLR reasonable value.