CMK My general outlook for the overall met. coal, not thermal (big difference between the two commiodities) market is bullish as we move past this short term weak period and contract prices move up 2nd half of the year and into next year. Steel production has not slowed at all...it has been going up and is up about 6% globally from last year when coal prices were about 300 per ton. CMK has high quality met coal that will command higher price. There are few issues that come to my mind that CMK management need to address:
1) Production targets maintained or increased...they lowered their production output in the last Financial press release and markets hate that and the company loses creditability.
2)The cost per ton has not have been mentioned yet. And is the cost per ton manageable going forward?
3)Sellable coal market customers willing to try a new companies coal.....establishing customers really important issue.
IMO the price of the shares now is like what it was 2 years ago, but CMK is now a mining company with real production! No doubt the current price under 1.00 is attractive and investors (long ones) should be adding here. The downside is limited if nothing else goes wrong which I do not think will happen. And upside is very favourable.
All in all eventually CMK will be bought out by an American coal miner (ACI, BTU, ANR, WLT to name a few), and it would be interesting to see what price they would be willing to pay for CMK. If the buyout happens my bet is the share price can be anywhere from 5.00 to 10.00 a share...not bad if you are looking at that the share price from today's point of view. GCE and WTN got prem. values for buyouts (1billion and 2.4 billion), and IMO CMK has the potential to produce more and has alot more reserves than GCE/WTN.