Corsa Coal Corp V.CSO

Train wreck

[Binkie]

Not in my worst case scenario did I fathom such a brutal report for Q1. Lot of management deception. Very very unhappy with this situation. I see nothing positive at all in the report.

[auburn2]

Only positive is the low valuation against book, and what these assets with strong met coal pricing. The company should be sold. As others are noting: "We expect to recognize the full impact of higher-priced sales in 2022 as realizations improve significantly over the 2021 contract and spot market prices" How does that reconcile with what is happening now? How could they deceive us so

[auburn2]

I meant what these assets can do with strong met coal pricing. Crazy SH still doesn't have an edit function.

[Binkie]

Oh the potential is so alluring but the execution is so appalling...and then there's the lies and damn lies. There isn't a problem listed in the NR that can't be resolved, there simply isn't a plausible explanation as to why they are regressing and not progressing.  What would they have gained by misleading investors? How could they do worse if they tried? Are they

[elducky]

All they really needed to do was produce the same volume as Q4. How hard was that? Then they would have still made a paltry 15 cents. Bad, but whatever. How did they screw this up?  You are right about the potential. An astute purchaser would buy out the company for cheap. It's worth $1 just for the plants. The reserves are worth $0.75, even undeveloped. They should be making 30 cents a

[Binkie]

It would be a no brainer as a cheap acquisition, good assets for pennies on the dollar. They should be printing money like the Fed, but they miraculously managed to lose money with record commodity prices. Unbelievable. I don't trust the incompetent scum running the company that willingly mislead the market. I sent a scathing email to them, not that it will be read. I may hold off selling for

[auburn2]

Well, it's very possible met coal remains strong for the remainder of the year and during 2023 as well, in which case it's very possible CSO is over $1/share before the end of the year. Very possible.

[Binkie]

Production in steep decline, horrible contracts and no plan or direction...which likely means the direction is down.

[auburn2]

A company sale should be able to fetch over $2/share if the buyer takes into account the growth project. I figure about C$250 million for the whole thing. The growth projects generate a great deal of NPV for very little upfront capex. Do the math on one with US$28 million capex for 600,000 tons/yr over 10 years. I know these results are disappointing, but there's still a heck of a lot of value

[auburn2]

For example, A Seam. 600,000 tons at say $250 - $100 costs = $150. That's US$90 million for the first year with estimated US$28 million start-up costs. 6.4 million tons of proven reserves, so 10 more years of 600,00 tons production based on the proven reserves. If a company held this asset, and nothing else, what would it be worth? At $50 margins based on $150 pricing and $100 cash costs

[elducky]

If they just shut down, they might be worth more. The assets are valuable, but the management is dumb. But regardless of the results, if they could just give guidance, we could figure out what's actually happening ahead of time. I do think some smart long term buyers will be trying to pick up cheap shares now.

[elducky]

How do we demand new management? In any normal company my shareholdings would guarantee the president answers the phone. Instead I get nothing.

[auburn2]

Sent a PM, ducky.

[Binkie]

It's a career making opportunity for someone to take the helm and turn this into a cash making machine. This could easily be valued at 500m instead of the 34m it closed the day at. It's not assets, it's not opportunity it's not commodity pricing, it's management.  Did you add elducky? Todays low to high offered an 70%+ gain potential if someone was fortunate enough to

[auburn2]

I robotically without emotion took advantage and added. More profit ultimately.

[auburn2]

New contracts will be negotiated around August from what I understand. Those contracts will be a big bump up from the current ones, so 2023 should be a flush year, and they're going to survive 2022 just fine. Also am reaching out to the company to see what exactly they are doing about labor challenges. Imagine what they could generate if they were producing at at just 300,000 tons per quarter.

[auburn2]

Even 200,000 tons per quarter isn't bad, but cash costs will come down a lot, and margins will improve a lot, if they can produce closer to historical levels, so labor is a major issue - as a big an issue as better pricing is. In my opinion, the risk-reward remains first class even though the current losses we've taken certainly are painful.

[Binkie]

I wonder why the labour shortage remains a corporate and not an industry issue? 200,000 per quarter is a massive decline from historic levels from even the previous 2 years, and with current pricing, it couldn't come at a worse time. You're likely right auburn2, they should do better if the contracts are fulfilled and renewed at much higher prices but I'm still skeptical. Good for you

[auburn2]

Ramaco did say labor is very competive. In any case, I expect Friday to have been the lows for the stock going forward. I intend to add more over the next two weeks & will be patient. Like you I was early, but I fully expect to be in the green on all my purchases over a reasonable time frame.