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Strategies & Market Trends : Ride the Tiger with CD

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To: maxncompany who wrote (119653)	6/22/2008 3:33:09 PM
From: E. Charters	Read Replies (2) of 312325

Zackly. The thing about Mt. Klappan is that it is 90 miles north of a rail line. It is also in licenses spread out over a good whack of countryside, not a single high grade deposit. They want to build a slurry pipeline to the sea, but I view that as expensive, and I don't believe slurry or fines is the preferred way to ship coal overseas, even if much of it is used for direct injection. Anywhere you can build a pipeline you also can and must build a road. So the road and lump coal makes more sense for shipment ihmo&isaby (and it should also be yours). They do have a lot of work on the coal value, including pilot plants studies etc.. Given the market for met coal which has developed in the last 3 years, I would give this one high points in a spec basis. They have to refine their development plans to the practical. They need a ten dollar stock to make their in house financing practical. What I would do If I were them would be to stop dreaming and implement a 750K ton per year shipment facility with yeah bush road, and yeah landing craft offload to container shipping. You could build 150 miles of road for $45 million, a plant site for $80 million, and various ancillaries for about $35 million. $75 million a year should pay that back sufficiently fast. Upgrade to 2 million tons per year could come later. Personally if I were going to put in a 400 plus million facility I would do a rail line with 6 foot gauge. 90 miles to the sea would be $45 million. Engine efficiency and low rolling friction of stirling engine trains would be lower cost than any other shipping method. If you went 4' 8.5" gauge you could use existing line with two spurs to Prince Rupert and the site. Perhaps lower costs a bit. EC<:-}

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