NAG commentJust wanted to make a quick comment/observation. Based on NAG's financial statements, yes they did lose money on mine #1. However, it is not as bad as most people think. From January 1, 2010 to June 30, 2010, NAG made $521,000 and spent 582,000. That is a loss of 61,000. I did not include the "depletion expense" of 135,000 as I understand it, this is just an accounting expense (it reflects what they must spend in order to "fix" the land after they are done mining).
Anywho, if the loss is 61,000 for the first six months of the year, it is important to note that this is simply for the first mine. Remember they had trouble getting it started and had a few delays with weather and other problems. And given the fact that this mine was the shortest mine that they have and that they were mining up to 8,000 tons per month, the loss is not that bad. Remember this was not blue gem coal. Right now they are mining (close to 8,000 again) of Blue Gem coal from mine #2 and will shortly start mine #3 at 25,000 tons. Those in my opinion should show a profit. The reason is simple:
1) they most likely won't experience the same cost overruns as mine #1 (due to weather, equipment, staff, etc.)
2) they will be mining blue gem coal (more valuable)
3) they will be mining 8,000 on #2 and 25,000 on #3
4) they will be mining for a lot longer than 6-8 months (like mine #1). I believe #2 should be at least twice as long as #1 and #3 should be a lot longer than #2 (I won't say how long, initially I was under the impression it would be a 15-20 yr mine but that is not correct. It will be more like a 3-5 yr mine I believe).
I just wanted to make those observations. I'm still holding patiently, at least until #3, #4 and #5 come on board. Once they do, if we're still stuck in the 0.30, then I will simply sell and move on. We should be starting #3 by the end of september/early october, #4 by the end of the year and #5 next spring sometime. So by next summer, there is no reason we should not have 4-5 mines running. GLTA and have a great weekend.