the real story - upside long term, page-4

re: the real story - greater future production Positive things that could increase earnings in the future
1. Tahmoor mine (Austral) is on the mend
*old coking coal contracts are due to run out soon
*engineering problems in underground mine may well be behind the company for the time being and for time in the future
2. Anvil Hill an open cut and therefore a safer mine will start production in 2008.
It is estimated it will contribute a third of sales.
UBS says it is worth a $1 of it's $5 price target
3. the recent downgrade in export THERMAL coal prices by Xstrata to $40 is not relevant to CEY.
CEY is locked into long term contracts with the NSW Government in the vicinity of $40 anyway so whatever happens to thermal coal prices is not really import.
In fact it is said to be a positive for the company because it adds a defensive element to it as these long term contracts ensure cashflow long term.
In conclusion CEY is set to take advantage of higher coking coal prices and increased production from Tahmoor and eventually Anvil Hill.
Further more it is insulated against fluctuations in thermal coal prices long term.