Member Info for Early_Bird

well done all

Can also buy on iii from a browser (not the app). Just put in the GROC ticker nothing will appear in the drop down but you will still get quotes to buy

by my calcs at 50k tpm (offtake quantum Carl alluded to in last podcast interview) at $230/t coking coal price and $15/t cost would yield $90m FCF per year net to CGO's 70% stake(!)

nice article luckyorange, couldn't dream of a better time to be closing major offtake deals. Stars aligning here perfectly.

https://twitter.com/MlSTER__X/status/1437696718607425538?s=20

https://twitter.com/ContangoPlc/status/1437687561506287616?s=20

Good to see more cottoning on to huge upside on offer here with big near term catalysts

indeed luckyorange... do you feel like the cat that got the cream? because I do! cant believe the market is sleeping here. Tbh its not until I crunched the numbers that ive comprehended in my mind the sheer size of the Coal asset alone. Its literally an order of magnitude larger than I thought and I thought it was massive in the first place lol

The current ATH coking coal prices havent been factored by the market what so ever, added to the fact we could likely land larger offtake(s) than the 30ktpm.. and what perfect timing aligning when offtakes are due.

caveat is these are very fag pack calculations but it gives a rough idea

also worth noting from the sheer size of the resource they could feasibly organically grow production to 10x that of the 50,000tpm and still have many decades of mine life....

Total pre tax cashflow potential over LOM is some £33billion net to CGO!

for reference the coal production cost I got from slide 16 here: https://contango-holdings-plc.co.uk/wp-content/uploads/2021/02/CONTANGO-_-121-Mining-Investment.pdf

Historically CGO was targetting 30,000tpm offtakes at $15/t mining cost selling for $60/t

This is to throw off 30,000 x (60-15) = $1.35m Profit per month or £1m

Where this gets interesting is we know the price of Coking coal is at all time highs and selling for $400/t in China currently! Surprise surprise that its the Chinese major steel manufacturers that CGO are in discussions for offtakes with! I wonder why theyre so interested... lol

Even if we take a conservative $120/t the numbers get mouth watering.

In the latest podcast interview Carl did here: https://omny.fm/shows/dig-deep-the-mining-podcast/coking-coal-mining-in-zimbabwe-and-gold-mining-in

Carl states theyre looking initially in the order of 50,000tpm offtakes (higher than 30,000 in original calculation).
If we run these numbers through the calcs we get:

50,000 x (120-15) = $5.25m profit per month or £3.8m profit per month

Thats a potential £46m pre tax free cash flow per year from the coal alone and what more riduclous is at 50,000tpm production rate, the Life of Mine (600million tons coking coal) is 1000years! Gives you some idea of the elephant of a resource theyre sitting on.

So net to CGOs 70% share thats £33m per year EBITDA at a pretty conservative coal price vs current prices!
Apply a forward PE of 5 gives you £165m vs current Mcap of £16.5m which is a 10x potential upside from here on the coal alone not even taking in to account the gold..

Nick I dont do Telegram, any chance you can share the link to your note on here?

https://twitter.com/TheMoneySponge/status/1425387535073742848?s=20

expect continued re rate here after last weeks big de-risking news.

Offtakes and financing wont be far off IMO given these been worked on in the background past 6 months

nice tailwind, hopefully updates in both Coal and Gold soon, both due!

TPKart this is the reason I love CGO from a risk v reward perspective CGO is cheap based on just one of their two assets... so downside risk is v limited whereas upside potential is colossal.

Coking Coal prices have gone on a huge run since the company cashflow projections, margins could be nearly double at this coal price. Even on the original much lower coal price projected EBIT for the coal was $12m pa and also $12m for the gold pa..

put a PE of 10 on $24m you get $240m which is 10x+ from these levels and thats for the much lower coal price...

big de-risking now done, the fun should now start with offtakes and financing on the runway clear to go

their loss! Personally cannot see any better opportunity out there than this one for Q4

https://miningzimbabwe.com/us1bn-steel-plant-ready-for-take-of/

so I have been