Here's my theory FGB. It's a bit twisted, so let me start from...

Here's my theory FGB. It's a bit twisted, so let me start from the beginning.

There is quite a large movement to get a place in the Galilee Basin right now. Let me tell you a little story. A family member is the gm of a steel product engineering firm which is based in Brisbane and is contracted to do jobs for the likes of Xstrata up north and New Hope Coal just west of the city. He was at a conference a few weeks back which was centered around infrastructure investment in the Galilee Basin. His words: "we were inundated with queries about what we could offer to the region". You would be amazed at how much is going on behind the scenes right now. I had a chance to briefly skim over a few different papers related to project plans for the infrastructure. The word overwhelming comes to mind.

Not much is known by the public about the Galilee because the likes of Hancock and Waratah are not listed and thus do not have to readily disclose their progress to the public. And what else do we know about non-listed companies? The majority stakeholders own large parcels of the company and will be reluctant to hand them over to a major for anything but top dollar. Vale are massive and the Galilee only makes up a small part of their project portfolio, thus they haven't mentioned it a lot, yet.

Really the only ones who are making large progress and are listed are Bandanna, Guildford and soon to be Baru. The rest are either purely greenfields, too big to chase up on or simply not listed. Right now, Bandanna is in the resource evaluation stage and is supposedly being teased with informal offers by some of the resource majors. Baru is not listed yet, and won't have a JORC until late next year at the very earliest.

The only one left with a project that can be scooped up on the listed market is Guildford. Now if GUF play their cards right, they can keep the interest on the down low until they announce a resource. It is in GUF management's best interests to do so, because as time goes by, GUF is generally appreciating in share price merely due to market speculation, and these 'decoys' in Mongolia. Once that resource is announced, people are going to start scrambling for a piece of the Hughenden action if the JORC is what I believe it will be. They will have to pay a fairly high price for a piece of GUF, as opposed to say this time last year.

Long story short, GUF management have a lot of their own coin in this play, and I believe they are using speculation, time and Mongolia news to their advantage by allowing the market to buffer up the company's value to such an extent that outsiders are going to have to pay top dollar once all the details are out there.

No major is going to buy out Hughenden if it doesn't have access to all the details, and thus GUF are putting off this until the very last moment.

Notice that there has been very little coal quality announcements?
Notice that we have had just 1-2 seam thickness announcements?
Notice how 'Hughenden' presentations are inundated/smothered with news from other projects?

It's all done to distract people.

Do a bit of research on the Galilee Basin and coal quality, and you will realise that we sitting on the preverbial 'gold mine' at Hughenden, but majors won't tempt themselves until the data from this project itself is out in the public domain.

As I said, its a twisted, contradicting theory of mine, but I thought I'd answer your question regardless FGB so I wasn't keeping people in the dark.

By all means, pick my argument to pieces :)

stja, I suggest you have a brief word with Nick about this. There seems to be an attitude between the two companies that CAP is 'investing' rather than 'partnering' in Hughenden. This terminology seems to carry some strange connotations in the industry. As long as one of the companies releases the news, that's all I really care about. If the market is too stupid not to buy CAP when GUF announces good news, then I will happily step up to the buying platform.