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Microcap & Penny Stocks : MTEI - Mountain Energy - No BASHING Allowed -- Ignore unavailable to you. Want to Upgrade?

To: LionHeart who wrote (1747)	6/17/1998 1:55:00 PM
From: Lee Walsh	Read Replies (4) \| Respond to of 11684

UPDATED 1996 STATISTICS....WEST VIRGINIA COAL West Virginia Coal Association's Fact Sheets Coal is West Virginia's "Best Known Finished Product" West Virginia Coal is shipped to 33 states and the District of Columbia West Virginia coal is shipped to 23 separate countries all over the world 50% of the coal exported from America comes from West Virginia (more than any other state) West Virginia Coal is the World's "Fuel of Choice" Coal mined in West Virginia is the most valuable of any of the 26 coal-producing states $4.4 billion dollar value Direct contribution to the state economy -- $2.6 billion ($14.86 per ton) Combined indirect & direct contributions to the state -- $14.3 billion, thus, Coal mining is a "new wealth" industry for West Virginia Low cost, reliable electricity is made from coal (Coal is the "LIGHT" for West Virginia and America) 99% of West Virginia's electricity is generated by COAL @ average cost of $0.05/kwh 56% of the nation's electricity is generated by COAL @ average cost of $0.08/kwh (60% higher than WV) 20% of New York's electricity is generated by COAL @ average cost of $0.13/kwh (I 60% higher than WV) 1996 was the largest production year in history for West Virginia coal 461 mines in 30 West Virginia counties reported production in 1996 174,008,217 tons (next closest were post-WWII year of 1947) 119,082,129 tons at 237 underground mines (68.4%) 54,926,088 tons at 124 surface mines (31.6%) #1 producing county - Mingo County (26,047,322 tons) Largest underground mine - Mountaineer Mine (Mingo Logan Coal Co.) - Mingo County Largest surface mine - Samples Mine (Catenary Coal Co.) - Kanawha County Total direct employment - 21,296 Total direct & indirect employment - 44,051 (includes independent contractors at the mine) For every direct coal mining job - 5.7 jobs in the local economy West Virginia coal industry paid approximately $1.07 billion in direct wages (All of state government pays approximately $861.4 million) Since 1863 (133 years) West Virginia has mined nearly 12 billion tons of coal Estimated recoverable reserves remaining - 54 billion tons in 41 counties West Virginia is the largest underground producing state in the nation (70% of total) (in ten years our productivity has increased by 195%, while U.S. has improved by, 85%) West Virginia has more longwall mining systems than any other state HAD ENOUGH...JHILD......SAY UNCLE, AND I'LL GET MY FOOT OFF YOUR HEAD...<GG> Watch them scramble, as they try to come up with more BS.. Lee

To: LionHeart who wrote (1747)	6/17/1998 8:37:00 PM
From: wonk	Read Replies (2) \| Respond to of 11684

Lionheart: You asked a legitimate question. Lets go through it. You missed the most important point of my post. That point is called the time value of money. You don't get the $25 million today, you have to build a company over time which hopefully will get you that $25 million. So lets discuss the time value of money. Assume, it takes 5 years to extract all the coal, from the original rights. Lets keep it simple and the company will generate $5 million a year net income. Lets also say they can continue in perpetuity selling coal at the same margin. Give them a 10 PE. How much do you want to make on your money? 15% a year is pretty crappy given today's market but lets start at that and run some quick and dirty numbers. What is a 5 year annuity, returning $5 million a year, worth in today's dollars? Using the pval function in any spreadsheet, the 25 million income stream is worth $16 million in today's dollars yielding 16/65 = 24 cents a share. OK, what is the continuing income stream worth under the above parameters five years out: 105/(1.15)^5) = 24.5 million. 24.5 + 16 = 40 million. Divide by 65 million equals 61 cents per share. Now you say, isn't that better than what you said before? Of course it is. But look at the risk factors. Everything the company has said has to be true, and then it has to execute. They have to have a superior profit margin. They have to do this with no further dilution of the common equity. In other words they cannot go out and buy mineral rights or raise cash for operations via stock sales. Of course, in order to generate the perpetuity value implied by the PE multiple they do have to have coal to mine or gas to sell, right? Lets say for the sake of argument that they can do all that. OK. Are you willing to accept only a 15% compounded annual return on your investment given the extra risk here? Lets say you don't like a 15% compounded annual return. You figure you need a 30% return to compensate for the penny stock risk. Well the above numbers change like this: The five year cumulative net income stream of $25 million becomes $12 million present value equaling 18 cents a share. The present value of the perpetuity becomes 13 million. Adding the two equals $25 million; divide by 65 million shares and you get 38 cents a share. Right where I started. And again, this presumes the company does everything people are saying it will do. No stumbles, no failed negotiations, no missteps. Show me any company that executes perfectly over any length of time. More importantly, do you see how as your expectation of return on investment goes up, the more money the company has to make faster? I hope you do because this is the way companies are valued. Now you did ask: Now what about the additional 8000 acres, or is this a "carefully worded" PR? Do you agree or disagree that that they acquired this land for mineral reserves, and if so what would be a fair estimate on the stock price? Well look at that 38 cents a share again. If they were to quadruple their mineral rights and extract the minerals at the same profit margins, in the same time frame, the value per share would quadruple. (Of course, taking this simplistic example to its logical extreme, that means by the end of twelve months MTEI will have generated 20 million in net income.) The fly in the ointment is that they have to get the 8000 additional acres of mineral rights for free*. If MTEI issues new shares to these new mineral rights holders, earnings per share are diluted. Also, they have to have all these extra mines on line and producing at a profit simultaneously. You want to get up to $2.85 a share? Well that takes something on the order of 40 million a year for the next five years plus the perpetuity value, with free mineral rights. Finally, the examples I've given you presume that MTEI is going to generate a minimum $5 million in net income in the next twelve months. (No rational person expects that they will, but this shows how conservative this quick and dirty little example is). ANY DELAY in generating net income makes the numbers worse due to the time value of money. Anyway you slice it, the 65 million shares, issued and outstanding, require gobs of earnings to move the share price higher. Please go look at ZEI again; only 28 million fully-diluted shares 800 million in revenues, 58 million in net income. Finally, Tod keeps saying that the 50 million restricted shares are available for acquisitions, but that is not what the press release said. ,i> The acquisition by ICCI will be paid with 50,000,000 restricted common shares only. The only way that the 50 million shares could be available for other corporate purposes would mean that the owner's of the mineral rights transferred those rights into MTEI for free. Do you believe that? Please tell me how much you think MTEI offered for these mineral rights, how they intend to pay for them? ww