Cline Mining Corporation T.CMK

It's not about Production alone

[mr1derful]

Everybody seems to focus on Cline's production but you need to start with revenue and work backwards. Current benchmark coal orices for hard coking coal are in the $205/tonne range. If Cline were to sell it's coal today we know that the coal would be discounted significantly from benchmark prices due to quality issues and more importantly due to the fact that they are a small and unproven producer. Cline would realize prices that are somewhere in the neighborhood of a 30% discount to benchmark prices which gives you realized prices of somewhere in the neighborhood of $140/tonne give or take. This is also assuming they don't produce much thermal coal.

The question to ask yourself is could these guys generate positive cash flow given that their costs are most likely going to be astronomical as they attempt to ramp up production. I seriously doubt these guys could be cash flow positive in today's coal market. I would have more respect if the management said something along the lines of " we need a benchmark coal price north of $250/tonne(or whatever that figure is) and we will delay production until the coal price is at that level. Below $250/tonne we can't be economical so we are essentially putting the mine on care and maintenance."

The management has communicated zilch about what they really need to make this project work. So no investor in their right mind(except maybe eigen) would give these guys any benefit of the doubt. I don't know why everyone on this board is so obsessive about this stock. there are good quality met coal producers out their like BTU and WLT that have been hammered my the macro issue. Why not invest in these types of company rather than a company like CMK that has huge operational risk?

[shane117]

Why invest in CMK rather than other like WLT you ask mr1deful? Because CMK have the most upside. And since just recently, things were looking very promising.

[ark88]

mr1derful=no money in the CMK game

[ark88]

shane117=young man who deserves his just desserts Be patient, you will be rewarded.

[mr1derful]

ARK88=Delusional guy who once stated that he would be upset with $5 takeover bid. He saw WTN get bought and hopes CMK is next big thing.

[ark88]

mr1derful; you obviously have never run a company. Check my posts and see when I bought WTN, in 2004. Check my post and see when I was buying CMK, when it was .16-0.17. Check my post again to see where the next big play is.   Cash flow is everything. As I've stated before, I put a 50% chance that Bates will deliver a contract before the AGM. Even at cost, using your numbers, it'll go

[mr1derful]

Sorry Ark88. I just see the wishful thinking part. Here's you from as recently as March 8th. "No way Bates is going to sell out at $5. If that was the case, I'd be seriously disappointed. I'm looking at $7-10 ($1.5-2.0 bil. MC) as reasonable for a mine at 2-3 mty rate with a longwall FS in place."    

[ark88]

Point taken. Dig up another post in late 2011, when I fully layed out the hazards with CMK come April 2012 if certain production/performance wasn't met.