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Bullboard - Stock Discussion Forum Cline Mining Corporation T.CMK

TSX:CMK - Post Discussion

Cline Mining Corporation > A Good Laugh
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Post by mr1derful on Feb 29, 2012 2:08pm

A Good Laugh

I have to admit I have had a good laugh over the last couple of days. Yesterday, most on this board were excited over the big stock move touting what a great company Cline is...and today...everyone is angry and upset. Poor Shane is publishing e-mail addresses.

Cline is a very difficult company to get a handle on. I really have no idea of what their cost structure will look like when they start producing coal at a run rate of 1.7 million tonnes. What I do know is that coal mining is not a straightforward business. If you look at companies in the met coal area they all have the same challenges. Costs are rising(fuel, labour, etc.) for all producers even for big companies like Teck. Companies are also consistently missing production targets which also raises costs as the fixed components of cost are spread over a smaller number of tonnes. For Cline I would be wary of any cost guidance the management of this company provides. Also I would be wary of their production targets as so many things can happen that can happen to delay production. Again, these challenges are not unique to Cline.

The thing that bugs me about this company is that the insiders never buy stock in the company with their own dollars. They are granted options and then they sell in the open market. Just look at the insider reports and tell me the last time an insider bought shares in this company? On the other hand, insiders at Walter Energy of spent significant $$ buying shares. Just the other day an insider bought close to $1 million worth of shares. If I were a betting man I would bet that Walter Energy gets taken out before Cline.

One more thought also. Cline, even at full production targets will be a small secondary producer. Even if their coal is high quality they will not achieve benchmark pricing but at a discount to the benchmark price. The amount of the discount fluctuates but Grande Cache Coal sold their coal in the neighbourhood of a 5-10% discount to benchmark pricing even though their coal is high quality met coal. And why did this happen? Because they were the 3rd largest producer in Canada behind Teck and the old Western Coal. The combination of high costs and a discount to benchmark pricing work to squeeze your potential margins. Remember this with Cline.

Comment by straightbull on Feb 29, 2012 2:26pm
Good post. Please post more often. Nice change from us regulars.
Comment by Eigen337 on Feb 29, 2012 3:57pm
This post has been removed in accordance with Community Policy
Comment by Eigen337 on Feb 29, 2012 4:01pm
This post has been removed in accordance with Community Policy
Comment by shane117 on Feb 29, 2012 4:40pm
It's pretty funny how Mr1derful (arrogant to call him self) pokes his head out of his own a$$ only after there has been a significant news release and posts his after the fact information and then takes pokes at other investors. What a guy!
Comment by mr1derful on Feb 29, 2012 6:03pm
Shane, you ungrateful little punk. Instead of being a baby you should be thanking me for posting after a long hiatus. If you read my post I provided some valuable insights into some of the issues with Cline. I should also point out that it appears that Cline will be producing a mid vol coking coal. If that is the case, then this coal trades at a discount to benchmark low vol met coal. I saw an RBC ...more  
Comment by shane117 on Feb 29, 2012 6:20pm
LOL! I should be grateful to be blessed with this split personalities after the fact posting. What  a guy!
Comment by ark88 on Feb 29, 2012 6:23pm
Mr1derful:You do not know what you talking about.
Comment by mr1derful on Feb 29, 2012 7:00pm
Sorry, Ark88, but I do know what I am talking about. Go read all my previous posts back in the days when I posted on the GCE and WTN boards. A lot of people didn't like me back then but they respected me because they know I was right a lot and I could always support my viewpoints. You just hear what you want to hear. Ark88 you are banking on Cline getting taken over. A lot of things have to ...more  
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