North American Gem Inc V.NAG

A little play with numbers

[mdzgn2006]

According to today's news release, NAG intends to mine approximately 350 acres of the recently acquired Granny Rose lease that has Blue Gem coal.

According to Alden Resouces, a privately owned miner and NAG's next door neighbor in KY that also specializes in Blue Gem coal, the price can be as high as $ 120.00 per ton. 

With an average seam thickness of 2 feet, the lease can contain as much as 30 million cubic feet of the stuff.
That translates to close to 1 million short tons, based on a weight of 60 lbs per cubic foot. (I used 60lbs/cubic foot as an average, if anyone has a more accurate figure, please post it.)

Let's say NAG is able to extract 800,000 tons of coal from this seam with a conservative estimated profit  of say,
$ 40.00 per ton, we are talking about $ 32,000,000.00 of potential profit from Granny Rose. 


And this just one lease.

[ivanhoe2]

WOW!!! and may I say you are good at math! It does make the future look quit bright for Nag.

[hiker1]

Good figures, Mdzgn.    The news was great today and with already having a producing mine plus the upcoming projects,  especially,  the Bluegem seam,   I don't really care if we shoot to .20 on a news release like today.   I honestly am a little surprized also of the lack of sp movement but then again,  I really do not care either.  

[rojo1]

I think that price is a little dated as HCC is going for $230 to $240 per tonne on spot and quarterly contracts are being settled for $200 per tonne. Blue Gem is of even higher quality and should command a higher price. IMO

[sandymackay]

I think your right Rojo, I remeber reading a few months back somewhere that Blue gem was going for between $160.00 and $180.00 per ton. I tried to look up spot prices for the stuff but couldnt find it anywhere. I wonder if  the increased demand for Coking coal will help BG prices!  So if NAG earns approximately 30% as they do with mine#1, that  would be

[hiker1]

Looking at the Elk Mine release for Cline today that set that stock rising,  on the compliance report it states the quality of the coal reserves from the Elk Mine as follows:Coal quality analysis performed by CF&I and subsequent operators show that the Allen andMaxwell Seams are low-sulfur, metallurgical, grade A and B bituminous coals that can be alsoused in thermal applications. Dolbear

[Saturn4]

The last I heard from IR was that BG coal was going for about $170 ... this was over a month ago.  I believe the cost of producing will remain at $40 per ton ... no reason for it to go up .... if it does, it will probably not go up too much ... just speculation but also based on conversations with IR ...  Even if the cost is $70 ... and the price of BG is $170, NAG is looking at a profit

[rojo1]

exactly Sandy that is what makes this such an attractive investment. GLTA

[rojo1]

Evrey wager must contain risk and that would be our risk at this point. When approval is recieved this stock will fly. IMHO

[stavros67]

The only risks I see are equipment problems, weather problems, and delay in permits granted because of the usual beauracratic stuff, and any of those would only constitute a TEMPORARY speedbump. I wonder if anyone will pony up some cake to try to short this thing?lmgao