CCC - Continental Coal

[djones]

Continental Coal Receives Final Approval For Mashala Resources Acquisition

October 13, 2010

Continental Coal (ASX: CCC) moves one step closer to developing into a mid-tier Southern African coal producer with the final necessary approval from the South African Department of Minerals and Resources to acquire Mashala Resources, through African subsidiary Continental Coal Limited.

The acquisition provides Continental with immediate export coal production from the Ferreira open cast mine which exported approximately 600,000 tonnes during financial year 2009.

Of major importance to move the coal, Mashala has Richards Bay Coal Terminal (RBCT) allocations and Transnet Freight Rail contracts in place, boosting key logistical capabilities.

Mashala has a 300tph wash plant operation and rail siding only 3km from the existing Ferreira open cast mine and Penumbra underground project, where Continental is looking to immediately commence works designed to develop this project into a 500,000tpa export thermal coal operation.

Under sale terms executed on 15 September 2010, Continental will acquire a 64.1% shareholding in Mashala for a cash payment of US$35 million.

The balance is to be acquired on same terms within 12 months of settlement date.

A massive 6.6 Bt exploration target has been identified at the Mashala Coal Project, in Botswana, with 2.7Bt at a shallow to moderate depth, confirmed by independent South African consulting geologists Gemecs.

http://www.proactiveinvestors.com.a...-for-mashala-resources-acquisition-10768.html

 

[ParleVouFrancois]

Hi Laurie I read your post about share consolidation, I fail to see how it effects anything but perception about a share. E.g. 6 cents per share psychologically seems 'worse' than 60 cents, but if the ratio is maintained, e.g. 10 times the amount of shares for the 6 cent level, then there is no difference in value. Market cap is the same, and market cap is one of the most vital parts of valuing a business.

Also as highlighted by a different poster, some funds have rules that include share price, e.g. the managers can't buy any shares of a company if they trade below 1$ or some other arbitary figure.

Primarily the difference between a share before and after consolidation is psychological, the business is exactly the same, just some instos have rules prohibiting investment, thus if a share consolidation would take place I see no real negative impacts on the value of the company (besides the admin costs to perform the consolidation).

 

[djones]

254 million shares traded today, $19.2 million....

Thats a big chunk of the companies shares traded!!

 

[jeffTH]

254 million shares traded today, $19.2 million....

Thats a big chunk of the companies shares traded!!

Don't forget with very active day traders some of those shares may have been traded 3 or 4 times. As a proportion of the company's shares it may be less.

But anyway go CCC!!!

 

[cassawary2]

Continental Coal trading halt

A little learning for a new boy on the block. Why does CCC show 324 000,000 odd share volume today when in a trading halt?

Been watching (with a few shares) with interest and announcement to ASX today is going to be positive.

Look forward to your comments

 

[adobee]

CCC to reopen this morning.. should be rather interesting..
lot of speculation on this one ..

 

[UBIQUITOUS]

CCC to reopen this morning.. should be rather interesting..
lot of speculation on this one ..

I'm surprised that this company didn't run further. For a company that is cf+, in production, gargantuan resources, ex BHP management, $61m capital raised, and with a 20 year offtake agreement - surely this company deserves to be rerated to multiples of it's current $250m fully diluted market cap. I read that Whitehaven have less of a potential resource and are valued at 50x CCC.

It can only be a matter of days - once Mashala is finalised, i think the rerating will happen.

 

[djones]

I'm surprised that this company didn't run further. For a company that is cf+, in production, gargantuan resources, ex BHP management, $61m capital raised, and with a 20 year offtake agreement - surely this company deserves to be rerated to multiples of it's current $250m fully diluted market cap. I read that Whitehaven have less of a potential resource and are valued at 50x CCC.

It can only be a matter of days - once Mashala is finalised, i think the rerating will happen.

Technically by staying the same or slightly increasing despite dilution it did run a bit. Will be an interesting day today!

 

[UBIQUITOUS]

A 12c broker valuation came out yesterday. The current share price is 7.4c.
12c is not quite the 25c-30c valuation that CCC itself values the company at, but its a good start.

What is interesting about the 12c valuation is that the research report leaves out several of the projects from the calculation, especially the 6.6bt Botswanan coal field.

 

[pedalofogus]

A 12c broker valuation came out yesterday. The current share price is 7.4c.
12c is not quite the 25c-30c valuation that CCC itself values the company at, but its a good start.

What is interesting about the 12c valuation is that the research report leaves out several of the projects from the calculation, especially the 6.6bt Botswanan coal field.

It's good to see this company starting to get some broker coverage. Personally i think 12c is quite conservative. Even though most companies value themselves higher than everyone else, i think CCC's self valuation of 25 cents is pretty fair.

 

[UBIQUITOUS]

It's good. Very good! Continental Coal is now a producer. It's something many juniors can only dream off!

CONTINENTAL BECOMES SOUTH AFRICAN EXPORT COAL PRODUCER
Completes financial settlement of US$35M Mashala Resources acquisition as first drawdown of
EDF Trading US$20M “coal loan” occurs and first export coal railed to Richards Bay
Key Points:
• Financial settlement of the acquisition of Mashala Resources (64.1%) completed
• Execution of Coal Sales Agreement with EDF Trading for off-take of export thermal coal
production from Ferreira, Penumbra and De Wittekrans mines
• First drawdown of EDF Trading US$20m “Coal Loan” completed
• US$15m drawn to fund outstanding acquisition costs of Mashala Resources
• Acquisition provides Continental with immediate export coal production, key Richards
Bay Coal Terminal and Transnet Freight Rail contracts, extensive project portfolio to be
developed over the next 5 years and strengthened management team
• Continental’s first export coal already railed to Richards Bay pending sale to EDF Trading

 

[adobee]

Still surprised to see this hasnt had a huge run.. I am not sure if it just hasnt had the interest of an institutions or if people dont believe the storey ...
Seems to still be valued as an explorer rather than produced with 20year off take agreement ????

 

[lzen5]

Its looks like CCC is paying out their management team through options, potentially very dilutive. Havent gone through their books that well. A bit of a blind stab on this one.

 

[lzen5]

is CCC actually turning a profit at the moment? what is the release date for its next audited ER?

 

[ParleVouFrancois]

Izen, considering that the options that they've recently issued to management (and that you've highlighted as "potentially dilutive") is about 2.5% of the total already issued, I don't think it'd effect the end value of CCC all that much.

CCC is cashflow positive atm, not too sure as for the amount, but definitely cashflow positive. You shouldn't rely so much on "profit", as this can be manipulated much easier than the cashflow figures (still manipulatiable, but less so).

 

[adobee]

CCC is really under the raidar.. price has hardly moved on the change form explorer to producer .. will keep buying up low 7c range.. just a matter of time till some investors and the market catches onto it..

 

[pixel]

CCC is really under the raidar.. price has hardly moved on the change form explorer to producer .. will keep buying up low 7c range.. just a matter of time till some investors and the market catches onto it..

Shhh! Don't tell anybody!
I'm with you. Also check out CCCO = 5c by February 2013. They're still trading as if the heads couldn't get above 10c within the next 2 years.

 

[slow_trader]

CCC is really under the raidar.. price has hardly moved on the change form explorer to producer .. will keep buying up low 7c range.. just a matter of time till some investors and the market catches onto it..

With the recent announcement of becoming coal producers and having contracts to buy coal produced why would the SP remain steady? On the surface this looks like positive news for the company so I am surprised that the market has not acknowledged this.

 

[UBIQUITOUS]

Shhh! Don't tell anybody!
I'm with you. Also check out CCCO = 5c by February 2013. They're still trading as if the heads couldn't get above 10c within the next 2 years.

Pixel, I only hold CCCOs and lots of them. The leverage offered is tremendous considering the company is derisked to such a degree. Now that the DeWittekrans complex will begin to be developed, there will be a marked improvement in the 2 broker valuations due at the end of the month.

Gradually the public, partly thanks to the CNBC and Bloomberg adverts, are becoming aware that this a major producer (2mtpa) and not an explorer.

 

[optic]

The 2 broker reports expected next week should help. Also expect a significant holder notice too.

It's only a matter of time before CCC moves IMO.