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It is interesting to analyse the information given by Excel in their May presentation. Excel suggest that the coking coal price may retreat to around A$75 (from around A$160 now) and the export thermal coal price to a level of A$55. They also provide information about expected production growth. Putting the two together shows that earnings per share can reach $1.00 in 06/07, if not 05/06, and be sustained above $1.00 per share through to the end of the decade. ie, expanding output will offset declining prices.

Add to that the fact that infrastructure bottlenecks are being addressed in both NSW and Qld, and also that this management has a track record of smart corporate moves, and I think I can make a case that the stock is not too fully priced at current levels, and has upside ahead of it.

One shouldn`t forget too that mid-sized resource companies like Excel are usually, in time, snapped up by one or other of the consolidating majors, and I think that there will be more than a few buyers for any shares that you may want to unload.