Conti.Coal Share Discussion Threads

[saikat] 21/10/2013 18:22

Nov crosses 85, Dec crosses 87, Jan approaches 88 - cannot figure head or tail. Find the rush a bit scary.

hxxp://www.barchart.com/commodityfutures/ICE_Richard_Bay_Coal_Futures/LVZ13?mode=I&view=

[saikat] 20/10/2013 19:21

Information not yet out c3.

[c31161] 20/10/2013 14:45

Does anyone know a date for this to start trading on JSE

[saikat] 18/10/2013 18:26

Little worried by the speed. January 2014 crosses $86, December 2013 crosses $85.

hxxp://www.barchart.com/commodityfutures/ICE_Richard_Bay_Coal_Futures/LVZ13?mode=I&view=

Hope we don't regret in two months time. Come on! consolidate!

[ceepee01] 18/10/2013 12:02

From an earlier post by Heed (info from HC-re JB)it looks like more equity out on JSE float. Seems extn. of Cons or new/existing stakeholder could be options. Agree Trout, once sorted should give a new lease of life. Then enough time for Penumbra to get running at low cost ($53) to get cash flow for De Witts in 2015 (IMO). If coal demand/prices grow then renewed focus on selling non-core as well. share price suffering from debt uncertainty as other factors looking good (again IMO!).

[saikat] 18/10/2013 11:49

As far as I understand, these convertibles do not have VWAP elements and probably originates in South Africa and not Perth - so it is not the usual Landau/Brewer Ponzi traps through OKAP. They convert at some high price like $0.80 - obviously they will not be converted voluntarily at this price. So just pushing out the timeline by a couple of years hurts, but may not hurt as much as before because we should be shortly into strong cash generation. But I have no clue about how this impacts share price.

Impact on share price will be much more to do with (a) the anger that the Aussies (now most others in the world) feel towards Perth offices, although they need to realize that Perth Office has recently been marginalized and (b) the serious deflationary negativity for junior ASX listings.

You see Coal of Africa has listings on ASX, JSE and AIM, but the JSE listing does not help the company to neutralize the negativity of the other exchanges.
Of course, operationally this company has been a disaster for many years, but they have lot of good quality resources (which should have a higher value), and they do not have past extensive shady finances like Cool.

Generally speaking, when the markets are in good spirits, positivity from a listing in one country extends to another country; and when markets are deflationary - it is the negativity which diffuses from one listing to another.
Multiple listings maybe a very poor idea in deflationary setups.

Today Leyshon Resources (LRL - both AIM and ASX listed) have elected to remove their ASX listing in a crafty fashion.

I also hope that Turvey gets all the finance help he needs from the new finance guy - Turvey needs it because despite his mining credentials, I suspect he is really weak in finance - otherwise, he and the company couldn't have been taken for such a rough ride by the Perth offices.

[troutisout] 18/10/2013 11:10

So from what CeePee and other things have pointed out, is we should see some sort of debt restructuring in the next couple of weeks or so.
Do we think this will just be an extension of the Convertibles? If so what sort of negative impact could that have on the SP? I would see dilution as a problem is they had to raise funds, but if the notes are just extended then what are the short term implications?

I hold quite a few now and have added recently, my feeling is that the share price may well be in too negative a place and a renegotiation of the loan notes for an extension would be very positive.

Am I missing something?

Trout.

[ceepee01] 18/10/2013 10:56

Well handled; new CFO was there too (for debt negots). Slides circulated in advance and DT/Lou there for questions before and after presn'n. Nothing new really- focus on JSE listing and what needs to be done. Prod'n going well as noted above and mines superbly located for existing/new power stations.

[saikat] 18/10/2013 10:03

Thanks CeePee. Any critical, sharp questions that the management had to deal with at any stage?

[ceepee01] 18/10/2013 09:47

Last night's presentation went well with good attendance. Considering Conti was 3rd of 4, vast majority stayed to watch (but could be the wine!). Debt issue (i.e. replacing Con notes) looks like being resolved in next 2 weeks; I think those sitting on sidelines will come in after this. Penumbra gaining momentum- 40k last month I believe ramping up to 60+ by end of Nov.

[saikat] 18/10/2013 09:13

Wesselton II is low volatile bituminous coal. It is not a very large resource but some of it is thought to be amenable to openpit mining. Low volatile coal often have special and desirable properties - e.g PCI (Pulverized Coal Injection) coal which is low volatile bituminous coal and is an economic coking coal replacement in blast furnaces. Low volatile bituminous coal can often achieve price premium over good quality thermal coal.

Wesselton II is also located not too far from Delta Processing plant and Anthara rail siding. I don't know whether Delta can handle two different types of coal simultaneously (one from Penumbra and the other from Wesselton II), but given the openpit possibilities, and the likely price premium, and the mining rights - is it not worth an attempt?

[saikat] 17/10/2013 18:05

Beginning to get worried on the pace of ascent. Jan 2014 approaching $85. Pause and shake! Pause and shake ! Else, it could just be spike.

hxxp://www.barchart.com/commodityfutures/ICE_Richard_Bay_Coal_Futures/LVZ13

[saikat] 17/10/2013 15:43

Some comments on today's investor presentation slides.


Most of it is boring and repetitive. Here is where I found interest.

(a) If any of you remember the points we raised on the Waterberg/Witbank arbitrage, let us say post 4011. Today is the first acknowledgement ever from COOL that they see the strategic contractual setups of the arbitrage the way it should be seen. See slide 13 titled `ESKOM A Major Growth Opportunity'.

I just wish they saw the importance of short-term contracts at least one year back before signing the medium term contract for Vlakvaarks with ESKOM (just not a smart operator - Cool). The difference is minimally $5 million (the 60% the subsidiary gets)a year in operating profits - in three years they could have reduced debt by at least $15m just like that.

You see, Cool will be free to play Vlakvaarks contract because presumably they do not have a debt obligation on Vlakvaarks - for Dewitts domestic coal you do not have this freedom - as bank debts will be pivoted around medium term or long term contractual terms with ESKOM.

(b) Slide 20 on Dewitts. Suddenly got scared seeing yields of 44% for export `or' 27% of domestic. Obviously, it must be both together : so 71% yields. That is OK.

(c) Wesselton II seems to have a mining permit. Can nothing be done with this?
Looks like Leyden is on course to get some permits soon. What about it?

(d) Dewitts focus has moved to harness the certainty of price trajectories with ESKOM contracts. I can understand that given the certainty of Waterberg/Witbank arbitrage and uncertainty of RBCT price trajectories.

[the heed] 17/10/2013 15:37

anyone know the details of tonights presentation??

[saikat] 17/10/2013 07:49

(Q1) Should move to short term/spot contracts on Vlakvaarkfontein as soon as possible given Waterberg/Witbank arbitrage. He may understand the arbitrage as the `coal cliff'.

(Q2) What happened in Vakplaats that it has been downgraded so much? It is still a huge resource and may have a large value given Waterberg/Witbank arbitrage. If there is domestic potential, KORES's share should be bought off for a cheap price.

(Q3) Identity of partner in Serowe/Kweneng licenses?

(Q4) Other Serowe license needs a similar partner quickly.

(Q5) Important to have a discussion why he let Landau/Brewer trap the company with Ponzi financiers through their other vehicle OKAP. Why was Leahy's help not taken to raise proper finance in London - Leahy has raised billions in London finance earlier in the commodity cycle. Why was Sioc-cdt's helping hand not used to come out of Ponzi financiers earlier since they were willing to help?

(Q6) A discussion on why the company needs to severe all ties with Perth Office if they have any hope of raising proper future finances. ASX listing may affect JSE listing in sentiments and financing - more than a strategic need to delist from ASX.

(Q7) Too many non-execs. Need to rationalize. Most of these non-execs cannot help with their connections (only reason you may need influential non-execs) in getting permits (mining, water, environment) quickly. The permit acquiring picture has been abysmal for the company.

Thanks Heed.

[the heed] 17/10/2013 07:25

Saikat.

Can you summarise please the questions.. I'm very busy today and will struggle to have time to go through your posts..

bite size please even if it means six or seven questions..

cheers.

[saikat] 16/10/2013 18:09

RBCT December 2013 crosses $83 and RBCT January 2014 approaches $84.
hxxp://www.barchart.com/commodityfutures/ICE_Richard_Bay_Coal_Futures/LVZ13

Mind you, these are not end of the day prices. Besides, there is usually a bounce around this time of the year and we don't yet know whether this is anything more than a bounce.

I hope the run does not continue too much further uncorking the entire world's supply and another collapse in prices.

Now, is $53 FOB costs for Penumbra in two months time possible, or is it one of Jason's usual sweet nothings? He told me that FOB costs will be at least ZAR200 lower than Ferreira - that is under $47 a tonne - I will ignore his advise. I will be happy if it is Turvey's $53 a tonne.

[saikat] 16/10/2013 13:53

Meanwhile African Energy Resources has bought yet another prospective property in Botswana - in Mmamabula.
hxxp://www.africanenergyresources.com/media/articles/ASX-Announcements/20131015-Acquisition-of-2-4BT-Mmamabula-West-Coal-Project-279/2013-10-15-Mmamabula-West-Acquisition.pdf

They are really going aggressive in Botswana - the backers must be strong. Still,
how do you play Botswana (and three huge acreages now) with $5 million? Dilution is guaranteed as the backers can only help through equity or debt. I hope the backers buy equity at a very high premium (they may as none of the backers actually want to do mining by themselves). Bit like the Chinese backers of African Minerals (AMI) recently.

[saikat] 16/10/2013 13:48

Sorry. Duplicate.

[saikat] 16/10/2013 13:19

The two important parameters that determine the quality of a coal mine are: (a) strip ratio, and (b) yield. There is an important third: underground or openpit but we are not talking about it here.

Strip ratio is the ratio of overburden (top soil, sandstone and any other unwanted material) to be removed (in weight) to get to a given amount (in weight) of ROM coal. A higher strip ratio makes digging for coal expensive.

Yield is the percentage of final product produced from a given amount of ROM coal through processing/beneficiation. A higher yield tells us that the quality of the ROM coal and the coal seam is better.

The numbers quoted in this paragraph are from memory and only roughly correct - don't have the time to find the exact numbers. Ferreira's strip ratio is high (about 7.5) while yield is mid 60% to 70% which is pretty good. One reason why Ferreira is high cost is this high strip ratio (apart from possible sub-optimal mine design). Penumbra's strip ratio is 2.5
(good) and yield is mid 60% (reasonably good). Vlaakvarks has a strip ratio of about 2 (very good) but yield is not relevant here, as the coal is crushed (hence some losses) but not improved. Eskom does the improvement themselves. Definitionally, you can say that Vlaakvarks has near 100% yield.

Contrasting this to BHR's Minas Moatize mine, The strip ratio there is 0.5 or so (fantastic) and the yield is about 16% (poor with current coke prices) - the management thinks that additional economies of scale/scope (larger mine, better washing, processing and so on) can improve this ratio to 21% (still pretty poor). Labour costs are very low here but labour is inexperienced as well. But because of cheap labour costs and low strip ratio, they still think they will be a cheap producer.

[the heed] 14/10/2013 22:49

hope call and put doesn;t mind..

Hi Kiwi67,
Had a nice chat with JB today. Obviously concerned from my point of view to sell or to hold? With JB holding 3.750,000 shares one way or another, I was interested to see how the convertible notes with the two investors was going? Sounds like agreement is getting close as finer details are bringing signed off on but sounds like agreement has been reached for an extension. Announcement coming out in next 2-3 weeks.
Asked JB what his thoughts were on the JSE listing and if there will be other CCC shares released to the market for the JSE listing which further dilutes the shareholders. He said NO and there will be no further shares issued as they will use existing shares and the shareholders have a choice to sell there current shares on either the ASX, AIM, JSE market.
With the two Botswana tenements and new potential JV partner. It was the other side who wanted to keep it out of the papers. They are keeping hush hush but sounds like a big player and the further release of the company and financials will be released around the JSE listing by the sounds.
The quarterly results is expected to be good with further upside on production.
In my mind it certainly worth waiting until the JSE listing as Botswana, De Witts further announcements might be the rerating CCC is waiting for?
Another miner on the JSE market used by JB as a similar or comparison to CCC is Wescoal WSL. I haven't been able to find much on this company at present maybe someone else can help me here?

[the heed] 14/10/2013 22:48

hxxp://hotcopper.com.au/post_single.asp?fid=1&tid=2107777&msgid=12407160#.UlxmMyRThXs

A good read.. very encoraging.. sounds like we are moving forward and news is coming along with the listing.. no new shares to be issued , extension on the debt.. top up?

[mrshaungcm] 14/10/2013 18:48

hxxp://www.thefinancialexpress-bd.com/index.php?ref=MjBfMTBfMTVfMTNfMV85MF8xODcwNTA=
PRETORIA, Oct 14 (AFP): French President Francois Hollande announced on Monday the signing with South Africa of a $2-billion pact for a thermal power plant in Africa's largest economy which suffers from energy shortages.

Hollande, on a two-day state visit to Pretoria Hollande, told a joint news conference with President Jacob Zuma that an agreement had been penned between French energy firm "GDF Suez and South Africa for a thermal power plant to the tune of 1.5 billion euros, and also for a solar plant."

He did not give details about the energy deal. But rolling power cuts in 2008 forced South Africa to rethink its power generation strategies, as supply remains under pressure owing to growing demand.

The continent's wealthiest economy, has now embarked on a multi-billion-dollar building spree to set up new power plants that would double electricity supplies over the next two decades.

Heavily reliant for decades on coal, it is now mulling other energy sources including nuclear power and shale gas.

It plans to add more than 50,000 megawatts of electricity to the grid and hope to generate at least 3,725 megawatts in green energy, in its bid to lower the over-reliance on coal.

Hollande also announced the conclusion of a $5.4-billion deal by Alstom to overhaul South Africa's passenger rail service, PRASA.

Under the deal, which was first announced in December last year, Alstom would build 600 trains and 3,600 wagons over a 10-year period from 2015 to 2025.

The deal, which Hollande described as "the largest in recent years" and an example of an "excellent partnership" between the two countries, would create several thousand jobs.

Part of agreement is that most of the parts used in the work will originate in South Africa.

It is the first phase of a much bigger, $14-billion project to revamp South Africa's Metrorail system, including the building of 7,224 commuter trains for Gauteng province -- including Johannesburg and Pretoria -- Durban, the Western Cape and Eastern Cape.

About 90 per cent of the current rolling stock is said to date back to the late 1950s.

Hollande arrived in South Africa on Monday for a two-day state visit in which he is set to push for greater cooperation in trade links and on African crises with the continental powerhouse.

Hollande oversees a French socialist-led government which has set as priorities the boosting of the competitive position and exports of French industry, reducing a chronic trade deficit and high unemployment.

[c31161] 14/10/2013 10:36

Is there a date for cool to start trading on the JSA