JSW is the No. 1 Coal producer in Europe.
Last Quarter they made a net profit of 1.8 billion PLN ($514 Million US)
Daniel Ozon is an investment banker and led the company from a bankruptcy level to the No. 1 in Europe. He knows his job.
He wants to grow the production and he said in various interviews that he is interested at the Debiensko Coal project.
In January/February JSW is going to raise $500 Million US with a bond offering in the US.
End of September JSW had 2.4 Billion PLN ($685 Million USD) Cash in the bank.
I assume they made another 500 Million US profit in Q4.
So we are talking about a cashed up, high profitable coal miner with liquidity of 1.2 - 1.6 Billion US.
Prairie Mining has two world class, long life coal assets and the very end of the world wide cash curve.
The market cap is around $80 Million US.
The Capex for the two projects is around 1 billion US.
At the current coal prices Jan Karski and Debiensko would make an annual profit of roughly $700 million US.
From any perspective you look at this scenario there must be something around the corner.
You can´t raise $500 Million US without saying the investors the reason for the raise and a plan to pay the $500 Million back!
On the other hand the JSW investors want to see their money going to work. With over half a billion US in the bank they have to invest to satisfy the shareholders.
If the projects of Prairie Mining would be Gold, Copper or Lithium the company valuation would be +500 million US.
But these days nobody is looking at coal anymore. Even institutional investors turn around if they hear the bad word COAL. They don´t understand the difference between Thermal Coal and hard coking coal.
This is the big chance for JSW.
The longer they wait the better for us.
We will see more value creation in PDZ with the BFS for Jan Karski and the finance package from China.
At the end I expect a take-over valuation of around $200-300 million US for us.
Cheers, ge
PDZ Price at posting:
61.5¢ Sentiment: Buy Disclosure: Held
