Interem Consolidated Financial Statementpage 3 & 4
New Elk Coal Mine Property
The company is in the course of arranging its ongoing financing requirements.
They have mentioned this before but I am sure they are having a tough time in this market.
New Elk coal will be saleable as a high quality metallurgical coking coal for export to steel makers and/or for domestic use. Its thermal coal will be for sale to local electric power generation stations. Cline previously secured the Grant of the Division of Wildlife ("DOW") long-term Coal Mining Lease from the Government of the State of Colorado for New Elk coal development and production rights.
It is a good ting they obtained this as this lease has most of the coal.
Lodgepole Coal Mine Property
The company is engaged in the permitting phase to production of its Lodgepole coal mine development in southeastern British Columbia, Canada.
At current prices for this high quality coal in the world markets, the sales revenues and wealth flowing into British Columbia from Lodgepole would amount to $8 billion.
It is good to see they are still trying to go forward with Lodgepole even though I think that the chances of ever getting this mine permitted is slim to none. Notice that they are trying to sway the BC government by touting the sales revenues and wealth flowing in to B.C.. Even if they got the permit I think they would have treehuggers from Montana throwing themselves in front of the trucks trying to stop production.
Lossan Coal Mine Property
The sale s revenue from the initial 15 year mine plan would be in the order of $3.0 billion at current price levels.
The company is presently reviewing various options to accelerate development to production of Lossan in light of the outlook for continuing the favourable supply-demand balance and coal prices.
I still believe we will see some type of partnership with Western Canadian Coal as they are working right next door to Lossan.
page 5
Soalala Iron Ore Deposit, Madagascar
The company has formed a Consortium with Mitsui, with further Japanese support, and has filed a formal Expression of Interest by the Consortium. The bidding process is continuing.
The trend to significantly higher global prices for both metallurgical steelmaking coal and iron ore, resulting from significant imbalances between mine supply and industry demand, is a positive development for the Company's large resources in these stategic industry sectors, and presents immediate development to production opportunities.
Note the last 6 words. Take a look at the new picture on the Cline website....where they are standing with a representative from Nippon Steel. The consortium seems to be Cline the Miner, Mitsui the seller and Nippon the customer. Something could happen here soon.
page 6
Equipment rental costs of $108,919 related to rental costs associated with mining equipment at the New Elk mine.
What they aren't telling yhou here is that this expense was for leasing the pump they plan on using for dewatering so that one would be available when it was needed.
page 7 & 8
Liquidity and Capital Resources
The company's working capital position at August 31, 2008 was $10,103.50
This just confirms that financing is a must in order to put any property in to production. I hope Ken is working hard on this or we are going nowhere.
page 11
Industry and Market Outlook
They are really touting the high side of the market here. Not as realistic as it should be.
Bottom line is that Cline is priced about where it should be in this market. They have some great potential but without financing the company is going nowhere.