The independent report from Dickman et al is actually a 1600-page
document that Gerald spent $700,000 for after acquiring the property
from the Indian Reserve Foundation in the early 90's. He really
didn't know what was under the ground at the time of purchase so you
might call it profound luck. The S/A deal would most likely involve
due diligence, but don't forget; that's already been done by both
the Dickman group and the power company from one of the states in
the south-east.
However, I doubt the power company is willing to make their results
known. It is obvious, though, from the offer (which was almost an
insult) that the coal as it is described in Dickman is indeed there.
As the price of coal rises U.S. companies in that business find it
once again profitable to harvest the reserves. One reason they low-
balled was probably due to the fact that coal prices for sometime
now have been low though they are now moving up significantly.
As you probably know, it was $93 million cash, but not escrowed.
This was not satisfactory to Gerald and it is a good thing that he
indeed did not sell the coal earlier on in the game.
My estimate is that if a deal goes through this month due-diligence
will take us out to December. Permits may be granted around then and
I would expect extraction to begin in January.
Long before then, though, the stock might reach a fairer valuation,
as it should.
Jim |
