Avg Price cmk assumes Over the course of 2012, the Company anticipates spending approximately $50.0 million in new capital costs and approximately $125.0 million in operating costs. The Company's plan for calendar 2012 anticipates the production and sale of 1.7 million tons of coal, with projected cash breakeven being achieved upon sales of approximately 900,000 tons. In addition to the sales of metallurgical coal that will offset operational and capital costs, the Company has drawn down on the first $25 million of its debt facility as described in the MD&A and will draw down the remaining $25 million of its available debt facility by April 30, 2012 to provide it with the necessary working capital flexibility it will require as sales ramp up over the course of 2012.
Cline is assuming an avg price for its coal of 194/ton which is the (50M capex + 125M op costs)/900,000 cash breakeven tons. Cash breakeven does not factor in new debt or cash on hand. They state the 50M of the debt is a buffer when they screw up and miss targets.
The 194 is certainly high (unless I misundestand something) - most likely will be around 150 or so.