from wallstreet-online germany

From wallstreet-online by my german friends.

update newsletter JSW - this is Polands, government-controlled ( 53 % ), listed coaking coal producer. I do not know them very well - but from what I am reading, they are struggling with their existing mines, and production is falling. having said that, they recovered from bleak times, thanks to the great coking coal market we are in. There has been a great deal of underinvestment in coking coal around the world, and the imgae of coal as a dirthy thing is not helping. But coking coal is neede to make steel - no way around it...coking coal + iron ore in a furnace + lots of heat/energy = steel! Poland has been under pressure from companies like Arcelor, to get their house in order in etrms of producing enough coal, to supply the steel industry in Poland, as well as in Europe. Obviously, Poland has existinmg infrastructure to support a growing mining industry - and the cost advantage of transporting coal from the east coast of Australia to Europe, vs a nice little train ride from Poland is massive. I think larger funds, which find it difficult to invest in our little Prairie Mining, should have a look at this thing. JSW have no officially stated, that tehy are looking at developing potentially three mines - one of them owned by themselves, the other two currently 100% owned by Prairie Mining. Imagine following - this is purely hypothetical: JSW is buying Jan Karski and Debiensko, which have a combined NPV of more than 3 bill US$ and could be among the lowest cost producers ( incl transport ) of hard coking- and semisoft coking coal to Europe. I could imagine, that PDZ would let those two projects go for 400 mill A$ - better a pigeon in the hand, than a long term plan with substantial capital requirements in prospect! For PDZ, that would mean a share price North of 1.50 A$ - nice enough. For JSW, this would not only support a long term coking coal industry in Poland, but also a potential 700% or more value increase of their investment over the next say 4-5 years. It could more or less double the company! A combined inevstment of say 1 bill US over the next few years shoudl be easily achivable from cash - EBITDA over the next 3-4 years, depending on coking coal prices, should be North of 1 Bill US$ p.a. So - fantastic deal for JSW and Poland in the medium- to longer term - fantastic deal for the Apollo Group and my fund in the short term. Sounds to me like a great deal for everyone involved - not sure, what could stay in the way here? Prairie looks like closing at the equivalent of 0,98 A$ on 1.3 Mill shares turnover in Poland...
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mmmmhhh, don't really share this happiness at 1.5 AUD. I want minimum 2 AUD for a quick takeover.
Why not a JV and lets make billions of dollar?