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Prairie Mining Ltd .: A highly undervalued laggard chance?
08/21/2016 | Hannes Huster
Prairie Mining remains a deeply undervalued laggard chance for me. The coal project of the company in Poland is among the world leaders and many coal stocks, which have survived the recent downward momentum for weeks already turning upward.
Even the neighboring Bogdanka could last forward again on rising share prices. The share of coal producers listed in early July for 34 PLN yesterday at 56 PLN.

Lubelski Wegiel Bogdanka S.A 12 months:
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Exciting I found the message of Bogdanka from 07.19.2016. There, the management announced that it has drilled on the Ostrow coal project and assumes to be able to extend the coal reserves with the area.
At the end of the press release, the management pointed but again the coal deposits K6 and K7. However, these two areas not Bogdanka, but our Prairie Mining belong!

Subsequently, the press release of Bogdanka - marked the O.A. Section:
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Source: http://ri.lw.com.pl/read-news?title...ng-license-for-the-ostrow-deposit&cmn_id=2598

The management of Bogdanka stated that they intend to continue to get access to K6 and K7, since these already proven coal deposits could be mined with the existing infrastructure and the existing shaft.
Below the map projects of Prairie mining in the East and the ongoing operations of the Bogdanka Stefanov bay west:
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Source: http://www.pdz.com.au/uploads/1/7/9/6/17961663/150917_-_pdz_september_2015_company_presentation.pdf

I find it interesting that the management of one of the largest and most profitable coal mines in Poland speaks at the official press releases from coal concessions that do not belong to them.
Either you want in order to prepare the market for a transaction or you still have the hope to preserve the area for a court order. As reported in the previous week, I see the chances of the latter after two lost games in court as rather low.
If we look again to the memory on the feasibility study of Prairie Mining. The largest single cost for the operation is the construction of the well:
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At 557.6 million USD total cost alone 233.3 million USD would be incurred for the shaft. Despite these high costs the average EBITDA would amount to 348 million USD per year.
A miscalculation: Would Bogdanka take the field in production, so probably only 324.3 million USD were to costs (slot available) and the company could then annually produce 348 million USD profit (!). The investment would have an IRR of over 100% and would pay for itself in less than 12 months.

Conclusion:
I like numbers and logic. This has earned us many stocks, most recently with Bulletin and Pantoro, a lot of money.
If I, the numbers of the feasibility study of Prairie look at myself and see that the neighbor for 324 million investment, EBITDA of 348 million per year for at least 24 years (!) Can achieve, then the company would strohdumm not to assume Prairie.
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© Hannes Huster
Source: Excerpt from the market letter "The Gold Report"

Disclosures according to Section 34b German Securities Trading Act
Key information for preparing this document are publications in domestic and foreign media (information services, business press, specialized journals, published statistics, rating agencies and publications of the analyzed issuers and internal findings of the analyzed issuers).
At present, the existence of the following conflict of interest is possible: Hannes Huster and / or The Gold Report Ltd. related undertakings:
1) enter into business relationships with the issuer.
2) participate in the share capital of the issuer or could this be.
3) were involved within the last twelve months in the management of a consortium issuing financial instruments of the issuer by way of a public offer.
4) after financial instruments of issuers on a market by placing buy or sell orders.
5) have within the last twelve months with the issuer, or whose financial instruments are subject of this report, an agreement on services in connection with investment banking transactions or have received performance or promise of services in such an agreement.