RE: Rail, ADV vs CHMYou're trying to make a lot of hay about one morning's stock price fluctuation.
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Rail, rail, and rail. That's all CHM management and shareholders should be concerned about. Option #1 to connect to the QNSL is to build a 62km rail spur first to the Bloom Lake railway, then on to the QNSL. But will there be enough rail capacity on the Bloom Lake spur? Bloom Lake is currently expanding to 16 MT a year (and had to ask permission from the government to ship that amount) and just announced a proposed expansion to 24 MT, with a target date of 2015. Will there be room for another 8 MT or so from Champion? Unclear.
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If the Bloom Lake railway is maxed out, then Option #2 (from the Fire Lake PEA, November 2010) is to build a 140 km rail spur directly to the QNSL. At 5 million per km, this rail spur alone could cost $700 million. Obviously, a massive project requiring significant environmental permitting and financing.
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What does ADV have to do to get their product to the market? A 17 km rail spur (plus 2 km's of yard track) directly to the QNSL. They recently abandoned the idea of an even shorter rail spur (6km) connecting to the Bloom Lake railway for 2 reasons, I believe: 1) avoiding the hassle of extra tariff negotiations with Bloom Lake railway; 2) possible lack of rail capacity on the Bloom Lake spur.
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We're all certain QNSL railway, with its extensive infrastructure and updated equipment, has extra capacity. Does the Bloom Lake railway, which is a relatively bare bones single track railway, have the same?