why i am not selling

I haven't posted for a long time as I guess I have been losing a bit of hope as the price declines and so few updates have been released to the market... I like everyone on here am nursing large large losses on cxy... I have been averaging down along the way so have brought my average price down but still need a trebling of the price from the current levels to turn this position into a profitable one.

I have spent the last few hours analyzing whether I should finally cut my losses and sell out... Or whether to stay on board... I figure many of you are going through the same thought process so I thought I might as well share mine:

Unlike many on here I put very low probability on there being any movement at all -ever - on the Kingaroy decision being amended. While the probability increased marginally when the LNP were voted in I have heard nothing to indicate this decision will be overturned. What is the upside for the govt and anyway it is meant to be a court decision that could be adjourned forever. I therefore put the probability at 5pc or less but I agree the payoff will be huge if it happens... Probably an instantaneous pop to 5c or more, perhaps higher, and some excellent moment to head further north as the project moves forward again. That is the dream scenario but one for dreams not reality.

The better probability is that one of the projects in Indonesia, Mongolia, China shows some progress. Now we don't need it to go all the way to even a successful pilot burn... Just simply the announcement of a permit... That should lead to a a jump to 2c or 3c because that only implies a market cap of 25-30m which is pretty tiny for a company moving forward on an early stage project with good potential, a heck of a lot of accumulated tax losses, a funding line (thru the Aust special opportunities fund arrangement) and option value on additional projects in other geographies. Now because we have three irons in the fire with the arrangements in three countries I wold put the likelihood of some movement there at 75pc by end of the year... And that is even adjusting for the fact we know they have missed many milestones before and this stuff sure isn't easy (otherwise we would have seen results a long time ago). The latest boardroom broadcast from Len seemed to be paring back expectations on china but increasing them on Indonesia. I do think they have learnt their lesson too on over promising and under delivering which partly explains the lack of guidance on expected timeframes in recent months. Now imagine that not one but more than one of these projects get to permit stage and then u believe blue sky territory is there for the claiming. And if one get to successful test burn and moves forward to financial close and construction then this could very easily be a couple of hundred million dollar market cap company - implying a share price of 15c or more even factoring in some dilution along the way.

Other tail events cold be cxy striking something conventional coal wise in their other deposits in Australia or selling them to someone else for a couple of million bucks and doing a special dividend or at least stopping the dilution for a year or so. A further one could be something happening for cougar energy uk which they still hold a stake in outside of Australia/Asia.

I can't escape the thought that the Lind Group - who sit behind the Aust special opportunities fund who provide the financing line each month - must have done a lot of due diligence before investing. I can't imagine they just choose a company, meet the CEO and then given them a 15m blank cheque. No they would have gone and assessed the likelihood of the projects getting off e ground before deciding to commit. That gives me additional confidence too.

At this point even the appointment of a new CEO could provide a little pop...

So why have I decided to hold? Because there is prob a 20pc chance that nothing happens EVER and the company just slips under the water quietly at some point - and the directors Wnd it up.. And because we have no debt we might get 0.1c of a share back, I.e. we dust our investment. But there is a 5pc chance Kingaroy surprises and we get a massive payoff and a 75pc chance something happens with at least one of these projects and we get a nice 2x or 3x return from where we are here.. These are not scenarios for five years down the track but scenarios for year-end.

You will of course have a different view of those probabilities and the playoffs but for me probability-weighted this investment is the best risk-adjusted return I can see right now.

If anyone wants to respond I would be keen to hear your assessment of (I) chances of Kingaroy decision being overturned, and day one share price if it was announced and (2) chances of one or more of these Asian deals moving to permit stage before 31 dec 2012 and share price spike on announcement of this. Let's get to some more stimulating posts over the constant whining and hibba's morbid fascination of talking down the price!