RE: TWO MILE Underground Entrance... Great posts Eigen, especially the Walter Energy article.
A takeaway for me is that not only is 3-4 million tons of premium hard coking coal slated to cost a whopping $1.2 billion, which could easily slip to $1.5 billion, first coal is not until 2018-19, which could easily slip to 2020!
Obviously, the difference between the quality of coal that WLT is pursuing and that of Cline's is huge. However, Cline could be in production at a run-rate of up to 2-3 million tons within 18-24 months vs. 7 years for WLT. he cost to ramp up to 2-3 million tons is probably $$100-$200 million? But, a portion of that could come from operating cash flows along the way.
For me, it keeps circling back to the value of the 619 mm tons of resources and the nearly $300 million of capital invested to date. The value of the mine and infrastructure and permits and wash plant and refuse area and throughput at Corpus Christie.
For someone like Cloud Peak, sitting on a tremendous amount of cash, with no coking coal assets or production outside of the Powder River Basin, Cline is a no-brainer. The alternative for Cline is to spend possibly 2x-3x the amount required to acquire Cline outright and wait 7-8 years for first production.