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clock Created with Sketch. 21/03/18
09:34
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Originally posted by BarrenBuffett
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HairyRichard1. How much free cash flow and profit would cokal be keeping ? Is the deal going to be profit share (preferred) or discount pricing. Profit share decreases our risk with the coal price fluctuations but we also give away our profits. Discount pricing gives us a bigger share of profits but then exposes us to coking coal price crash threatening the business unviable. We need to see the deal to understand where cokal stands2. How much upfront money would cokal be given in return of profit share arrangement and at what terms. For example if we are offered 15mil (my guess hoping for a higher deal) in return of 50% of PCI profits ( I know it looks terrible on paper but no one makes money if PCI never gets off ) then we need to account for cash in the bank (i.e. understand cokals EV) and what cokal intends to do with that money. Will they be increasing their resource by drilling Tbar and delienating potentially high quality coal at low strip ratio or developing infrastructure for BBM through road and port development. Market is always forward looking for so why shouldnt we have coking coal valuation thrown in the market cap too ???
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Thanks for the write up B.B. if I'm being honest last night's post were half-drunk frustrated ramblings. I don't have plans to sell these guys on the first whiff of an off-take or a deal of that sorts. Been here too long to just sell the news
appreciate what you've posted for me and will be keeping it in mind when the time comes
