Hyakugo Bank Ord Shs HYKUF

Next years’s contract question

[dowd]

Hi Guys, 

Can you tell me if how I am looking at this is correct?

In about 4 months time Corsa can negotiate a new annual contract. The futures strip for 2023 are currently about $330 per ton averaging all 12 months on the futures strip. 

Ok, so if I ballpark that Corsa can lock in $250 for a new 12 month contract for all their own production just for arguements sake which is 800,000 tons. 

if I take the $250 per ton and subtract $132 per ton in expenses I get $118 per ton in free cash flow. Call it $100 per ton multiplied by 800,000 tons gives me $80,000,000 USD in free cash flow for 2023. 

and this can be locked in in about 4 1/2 months from today assuming futures do not decline between now and September/October. European coal sanctions on Russian coal begin August 1st so we should be fine on that front..

the market cap of Corsa today is about $25,000,000 and Corsa could throw off $80,000,000 in free cash flow next year. Huh? 

is my way of looking at this correct? Light at the end of the tunnel? 

i was shellshocked by the news but have not sold based on this way of looking at the company. Am I missing something?

[elducky]

If you want to be very conservative, maybe $200 instead of $250. Hard to imagine their costs getting worse.  The market is saying they will find a way to screw it up I guess. Plus still a lot of sellers who are just sellnig from disgust rather than thinking it through. 

[dowd]

Yes, that I the perfect word for how the market views the stock right now: Disgust! we will just have to let those sellers finish selling, and I can't blame them also in a way. That was my first reaction after reading the earnings report. i wanted to sell too but not at the price that the stock opened at. I will just have to suck it up for a while and deal with the digusted feeling

[Creemore77]

What have you been able to find on contract renewal?  I think Corsa should give a lot more disclosure than they have.  Q1 says they are getting the equivalent of $206 fob port versus market $350+, and they say they price off contracts based on an index, which is not super helpful.  If they could close the gap by even $50 I think a lot of us on this board would go help them dig the

[elducky]

New contracts are usually around September, so if the price can stay elevated just another 3-4 months they are golden. And I'm seeing that this crazy market is 18 months - 8 years depending who you ask.  Can't see them getting less than $200, that's the floor basically. Could be more in the $250-$300 range for sure. Now, if they'd be nice enough to come out and tell us in

[MikeCowans]

o.k sir lol