announcement out, page-24

stockman,

can you expand on why this is "undervalued"?

I have done FA on this stock multiple times with the limited data and it has always come out agreeing with the shareprice if not a little over-valued currently.

Without a washability study my FA is not comprehensive nor probable to come close to the future value of this company (either positive or negative), however as a guide the current worth of the company seems to be fairly spot on.

4bn tonnes of coal which has a yield of 57% at 1.6 SG cut. Immediately signals that its a thermal coal, with low washability (most likely not export grade) giving a spot price of about $30-40 per tonne for power generation within botswana.

Mining costs range from $2 per tonne to $15 per tonne due to varying depth, $4/per tonne quoted for the 90m seam depth in the announcement by NMR. they have seams varying from 60m depth to 150m depth (this is soil having to be _removed_ prior to coal starting, which assuming average seam thickness of 3 as per JORC announcement, gives a strip ratio of approximately 20:1 at best, 50:1 at worst) a good coal mine generally does 3:1 strip ratio (see moolanban coal mine, moranbah averages or any coal seam in australia) however I have lowered the mining costs by a factor of 4 to australian costs due to botswana cheap labour and cheap equipment costs.

Washing plants at 800t/h the most common size (per module in south africa) generally cost $1-2/tonne to operate due to operator costs and magnetite losses.

thus we are looking at washed coal cost of between $5-20/tonne, having such a large cost and low revenue per tonne practically makes this worthless.

The capital cost to get a rail/powerstation built + surrounding mine infrastructure overshadows this.

best case is the resource gets bought, however people wont pay much unless a washability study proves this is export thermal grade coal (worth $80/tonne) because otherwise the profit margin is too small (payback time of roughly 12-20years for a plant+infrastructure capital)