Energybuild Share Discussion Threads

[jonwig] 03/12/2009 09:20

jw - I have to say that the prospect of WTN owning around 75% of the shares is a worry. The best course might be to buy WTN!

[jwilson1975] 03/12/2009 09:12

Why has this dropped really low ? I think it's because of the low volume. But i do agree they are very cheap now and will climb up again as it has done before.

[jonwig] 02/12/2009 12:33

kinbasket - that sort of thing has to be a worry with them potentially holding 75% of the stock.

There are some safeguards, though. Assuming they pay (say) 12p for the new shares, they can't bid less than that for at least six months (may be longer).

Also, if they offer a low price, you can just sit it out as a minority shareholder unless their holding reaches 90%, when they can buy you out forcibly.

EDIT: of course, a bid in shares could be acceptable as you'd still be able to take part in the story!

[kinbasket] 02/12/2009 08:57

Thanks.

Any thoughts on the posiblility of WTN nicking the whole lot for buttons after the AGM

[pbracken] 01/12/2009 17:31

kinbascket - the 31K tons sales is the consolidtaed figure for WTN accounts, i.e 50% of the actual total.

[kinbasket] 01/12/2009 15:50

Just having a look in here and have couple of questions.

In the year end financials they give a figure for saleable coal of 239,000t but a production number of just 114,000t underground and 65,000 from opencast. Am I right in assuming the difference is bought in coal (part from the JV) on which they make a quick sale and small margin. A sort of coal brokerage.

Do we have any idea what sort of margin they make on these deals ??

In the WTN MD&A over on Sedar they say production for Q3 was 29000t and sales were 31,000. This is quite a drop, presumably because the opencast was out of action. They say they bought in 8000t instead. Are they buying in the coal in order to meet obligations on contracts or is it all just speculative trading (the latter I'd be happy with)

More of a concern is the price achieved in Q3 has dropped to £55 according to WTN. They give COS in dollars of $90 vs $99 achieved. so a profit of only just over £5 per tonne. If you annualise the current rate you only get about £620,000 profit before everything else for the year. Seems a bit tight to be honest.

Any views on that ??

Lastly, the loan from WTN is at 14%..... HELLO!!!!

They can use an issuance of shares by EBG to convert any outstanding loan amounts into stock. The upcoming AGM motion looks to be a way for this to happen. It may be that a placing is in the offing whereby WTN get the whole lot on the cheap.

Any thoughts.

[jonwig] 01/12/2009 08:39

G - actually, issue new shares up to £13m nominal value. The nominal value is 10p, so that's up to 130m new shares.
Coincidentally, there are 130m shares in issue as of today.

WTN currently holds just over 50% of the shares so would hold over 75% if they are the only takers.

Shares can't be issued at a price below 10p. Apart from that restriction they haven't said how many shares they will issue or at what price.
The buyback clause is pretty standard - they won't be using it any time soon.

[gingellenator] 01/12/2009 08:22

Hi,

Have any read the notice of AGM on Energybuild website:


Say planning to issue 13M shares without giving existing shareholders first rights, also planning to buy back 5% shares.

If this sale is to western would give + 75%

Am I misinterpreting this? What are implications?

[daicaprice] 27/11/2009 11:32

EBG are now ridiculously cheap for a Co. in profit, spread the word before the AGM all, this has got to be worth 20p of anyones money.

[brian1944] 17/11/2009 15:53

China Coal Imports May Double on Infrastructure, JPMorgan Says



Chinese coal imports may exceed 100 million metric tons in 2009 and rise to 200 million tons annually over the next several years, JPMorgan said in a report yesterday. China imported about 41 million tons last year, Bloomberg data show.....

[jwilson1975] 11/11/2009 14:43

Current Projects and Future Plans

The company is thus now producing high quality low sulphur high calorific content anthracite coal from its underground mine and opencast projects, with steam coal from its tip washing project.

· The underground mines at Aberpergym and Treforgan, which together have a proven and probable coal reserve of 7.6 million tonnes, a further measured, indicated and inferred resource of 36.2 million tonnes and an overall in-situ resource of 112.2 million tonnes (according to the AIM admission document).

· The open cast activities on the Aberpergym and adjoining estates which have a 25 year surface lease covering 2,428 hectares (24 square kilometres) and all the mineral rights to this land. Open cast coal production on the estate is has been running at a rate of 2,000 tonnes per week and in December 2008 the company also commenced sandstone quarrying operations on the site in a JV with Gerald D. Harris Ltd which serves the dual function of generating revenue while accessing the coal seam below. There is an estimated resource of 800,000 tonnes of high quality sandstone which is ideal for use in road construction. The company is actively seeking further sites on the estate and has a positive record on the restoration and rehabilitation of old derelict sites.

· A 50/50 JV with Coal Recovery Investments (CRI) to recover and wash coal from disused coal tips. The project, which began in late 2008 and is expected to yield over 200,000 tonnes of coal over an 18 month period generated an initial profit of £63,000 for Energybuild in the six months to December 2008.

All the projects are served by excellent road and rail infrastructure, and the marketing arrangements are neatly tied up too. Energybuild has sales contracts with Aberthaw power station (60 miles away by rail) and coal distributor Evans and Reid, while it is in the last stages of negotiating a contract with Corus in Port Talbot. It also sells a small proportion of its premium coal directly to domestic customers.

Energybuild's long term objectives are to achieve accelerating growth and to create real shareholder value both through organic growth of its existing operations (with a target of achieving 265,000 tonnes by June 2009, 440,000 tonnes by June 2010 and 750,000 tonnes by June 2011), and through acquisition in additional coal reserves. Its immediate plans are to look for further investments that could improve the mining system, to renew its long term contracts and to obtain planning permission for further open cast activities.

Energybuild has a large number of bull points including:

· The high quality of its anthracite coal which is clean with low sulphur and a high calorific content.


· The size of the in-situ resources, which are one of Europe's largest anthracite deposits.


· The breadth and depth of the experience of the board and management team several of whom have deep and longstanding roots in the Welsh coalmining industry. Rhidian Davies has been involved in local mining for more than 30 years, the Chairman Colin Cooke has expertise in steel and marketing and is the director of a major supplier of conveyor belts, while non-executive director Robert Morgan has been an investor in the company since 2003 and has considerable experience in fund management and the City.


· The quality of the workforce, now 208 strong, up from 73 in the last 18 months
· The financial strength of the company which has little debt and had cash of £3.5m in the bank at December 2008.


· The relatively low capital cost of development in view of the development already undertaken by British Coal and the acquisition of Tower's equipment. Energybuild has also benefited from Coal Aid Investment Grants.


· The excellent transport connections with an 'A' road to the mine gate and a railhead at Tower colliery 6 miles away. Energybuild are investigating the possibility of a conveyor belt linking directly to a local railhead which might be built with the aid of grants from the Welsh Assembly.


· Energybuild's comprehensive marketing contracts and the ready local market for the coal. Future prospects for UK coal are likely to remain favourable (unless there is a massive swing in exchange rates) in view of rising transport costs which increase the attractiveness of UK coal over imports and the fact that UK infrastructure for importing coal is already at its limits. Moreover there is a threat of an energy deficit in the UK, local production is seen as a strategic resource and the recent energy review by the Welsh assembly highlighted the need for the continued use of coal


· The company's strong corporate citizenship ethic, health and safety management systems, environmental policies, community relations programme and apprenticeship scheme whereby local young people train for two days a week at Swansea College and work three days per week underground thereby safeguarding local skills and increasing the quality of the workforce.


· The additional revenue streams from sandstone and coal tip recovery

For shareholders right now the biggest uncertainty is the impact of Western Canadian Coal's acquisition of Cambrian Mining, though to date there has not been any immediate reaction to the May 25th announcement with the share price currently hovering around the 20p mark, valuing the company at £26m.

Energybuild has put in all the groundwork and thus far has succeeded in delivering on its targets. As discussed above there are a number of risks which could deflect the company off course, but for the moment it appears firmly on track for tripling its production of clean anthracite coal, as planned, by 2011.

A recent Ambrian broker's note rated the company highly in terms of the quality of both its management and assets, while the first conclusion of the Wardell Armstrong technical report, as discussed above, was that the Aberpergwm Mine and Treforgan extension is "a very interesting and rewarding mining project and is likely to be so for a considerable time.

Aberpergwm Mine has been successfully developed because of the commitment, dedication and determination of the experienced mine management team and the workforce". The report also concludes that the NPV of the Aberpergwm mine at a 10% discount rate is £88.6m.

[jwilson1975] 11/11/2009 14:43

Interesting ....

Visitors to Energybuild's coal projects near Neath in West Glamorgan will immediately be struck by the uplifting team spirit, by the company's passion for the coal mining heritage of South Wales and by the sense of corporate citizenship which permeates every aspect of the business. They will also quickly become aware of the company's record in making the most of opportunities. It is probably this "seize the day" vision and the hard work and determination of the team which has enabled Energybuild to acquire an estate with a flooded abandoned anthracite mine but huge potential, and to convert it relatively quickly and at low capital cost into a profitable debt-free business which produced just over 100,000 tonnes of coal last year. It is on target to produce 265,000 tonnes this year and, global coal market conditions permitting, will ramp up to 440,000 tonnes in 2010 and 750,000 tonnes by 2011.

Energybuild's primary assets are now two underground anthracite mines, Aberpergwm and Treforgan, which together host one of Europe's largest deposits of anthracite, the Nant y Mynydd open cast coal mine and sandstone operation, and a coal tip recovery JV project. The mining projects are on neighbouring properties between the Neath and Dulais valleys, some 7 miles from Neath. The tip recovery project is some 20 miles away, near Abertillery.

Since listing Energybuild has been successful in achieving its targets thus far, completing the drive into the Eighteen Foot Seam on time and on budget in the autumn of 2007, and completing the first air circuit by February 2008 and the second by December of that year. The company's plans were given a particularly significant boost in early 2008 when Tower Colliery, some 6 miles away, was finally exhausted after 203 years of mining and Energybuild was able to recruit approximately 150 ex-Tower miners and acquire Tower's entire pool of equipment for £1.4m. Now all the planned dewatering, ventilation and roadway recovery and repairs are complete, the mining fleet has been expanded, production is fully mechanised and the surface infrastructure has been improved to allow for increased production and manpower. The new drift should be completed in late 2010.

The company became profitable from the beginning of 2008. Full year production for the financial year ending June 2008 totalled over 100,000 tonnes with revenue up 37% to £6.5m and an operating profit of £802,000. In the following six months to December 2008 production from the underground mine, at 65,000 tonnes, was double the production for the full financial year to June 2008, while the 53,000 tonnes produced from the open cast mine was double the equivalent period in 2007. The projects, together with the coal tip recovery JV which began towards the end of 2008, generated a half-year revenue to December 2008 of £9.6m (up year-on-year from £1.4m) while the gross margin rose to £1.7m (compared to the previous year's loss of £113,000).

[jwilson1975] 30/10/2009 10:15

TIDMEBG TIDMWTN

RNS Number : 6367B
Energybuild Group PLC
30 October 2009

?
Energybuild Group Plc / Index: AIM / Ticker: EBG / Sector: Mining
30 October 2009


Energybuild Group Plc ('Energybuild' or 'the Company')
Increase in Loan Facility from Western Coal Corp.


Energybuild Group Plc, the Welsh producer of deep mined premium anthracite coal
and surface mined coal, has agreed an amendment to its loan agreement with
Western Coal Corp. ('Western'), increasing the facility from GBP2.5 million to
GBP4.3 million (the 'New Facility'). The increase in the facility will assist
in funding cash bonding requirements for Energybuild's opencast mine permitting,
the deposit for the procurement of capital equipment and ongoing working capital
requirements as the Company enters the next stage of developing its Aberpergwm
underground anthracite mine. To date, GBP900,000 of the facility has been drawn
down.

[slapdash] 28/10/2009 15:02

this is a gem all right.....

[pbracken] 28/10/2009 15:00

7p EPS in 2011, minimum. Put that on a multiple of 7 (derisory at that) and you can see why it's gem.

[jwilson1975] 28/10/2009 14:50

What makes you say that mate ? Don't get me wrong, i'm not deramping here as i reckong yes this is solid but wouldnt class it a gem.

[jwilson1975] 28/10/2009 14:14

Back to where we were before ...

[5070481] 16/10/2009 10:57

Been doing my research this morning on this and the long term financning was something that had been highlighted but also the fact that of the coal produced they didn't actually sell all of it. As anthracite is used predominantly in the home as a clean soot free fuel where is the market for their 750k tonnes by 2013. How crucial is it to get into the PCI market for them?

Any knowledge gratefully recieved.
Al.

[jonwig] 16/10/2009 10:47

I do have a couple of issues: first, the future annual interest bill on the WTN loan will be £350,000 - not a negligible sum.
Second, they say:

Subsequent to the year-end, the Group agreed a £2.5 million loan facility with its 50.6% shareholder, Western Coal Corp., in order to continue its development activities and provide working capital. This facility, along with equipment financing, will provide sufficient funds to support the short-term operational and development activities of the Group.

So they'll be wanting more funds before long? We must hope it doesn't cost them 14%!

That said, I believe they're correct in their outlook views for the coal market, and PCI is a good second string for their bow.

[daicaprice] 16/10/2009 10:28

Looking excellent value for money to me, suprised the rampers haven't shown up with those figures. Lets keep em quiet.

[jwilson1975] 16/10/2009 10:24

100K buy just gone through at 20.9 ...

[lasata] 16/10/2009 09:48

The more i look at those results the more i like them....

[jwilson1975] 16/10/2009 08:32

RNS looks very very bright, will probably see more buying today thus share price rising. It's still undervalued.