RE: Article on coal playarticle :
https://uk.biz.yahoo.com/16032009/323/kalimantan-gold-india-talks-indonesian-coal.html
This part of the article is key to KLG's future:
"The coal mine is expected to produce 1 million tonnes in the firstyear, gradually increasing to 5 million tonnes within 4-5 years, hesaid.
Indonesia' energy ministry expects the country to produce about 230million tonnes of coal this year, unchanged from 2008 on expectedslowing demand.
But industry officials said the country's coal output may reach250-260 million tonnes as coal consumption by India and China wouldhelp shore up demand.
India's demand for coal is growing by around 8-9 percent a year,outpacing production that is growing by 6 percent as the power sectorhas not been as badly hit by the credit crunch."
So right now KLG after the private placement has around 120mil O/S fully diluted, an 80% interest in the IBP coal project and high quality subitimous coal. So lets do some rough number crunching from the article piece above
1 million tonnes of coal X ($100 per ton of coal - $30 cost) = $70,000,000US X 0.8 interest = $56,000,000US 120,000,000O/S = 0.46 cents per share. That being conservative on coal price, high costs and thinking the currencies of US/CDN are at par. So I would say a good target would be 50 cents per share earnings. Then if they step it up to 5 million tonnes of coal, well lets just say if you buy in now and wait youll be making some serious $$$.
Yes its a coal play in India, but guess what? China wants the coal! Its closer and easier to get to China rather then shipping it from North America. This play is a no brainer. Plus, 50% of shares out there are owned by Managment/KLG Investment Corp, so not as many shares available as we think.