Value of ClineWestern Canadian (WTN) Wolverine Coal Mine, can be used to approximately value Clines New Elk Coal Mine.
Wolverine was recently put into operation at a CAPEX of $250 million and produces 2 M-Tons per year.
New Elk coal reserves are far greater and closer to market then Wolverine. Therefore New Elk coal is more valuable.
$250 million shared by 76 million shares outstanding = $3.20 per Cline share.
Cline will need financing, but dilution will not be excessive, because Mitsui, ThyssenKrupp and Pinetree are big shareholders, they will not dilute themselves.
It could be reasonably argued that all other Clines assets make up for any capital loss in dilution.
This gives Cline a per share value of $3.20 per share.
Assume Cline finances at $3.20 per share = $50 million / $3.2 = 15 .6 million shares.
Lets assume Cline settles at 100 million shares out at $3.20 = Mcap of $320 million.
Western Canadian has 230 million shares out at $5.80 = Mcap of $1334 million.
Cline also has Lossan that is only 9 KM from (WTN) Willow Creek mine and rail tracks. This project has over 200 million tons of coal.
Therefore Cline will easy go above $3 and maybe $5 dollars per share, just based on New Elk and Lossan.
We will gap up on Monday and may end the day at $2 per share.