Analyst Report - 20110311 - Continental Coal (Old Park Lane Capital)

8/6/2019 Analyst Report - 20110311 - Continental Coal (Old Park Lane Capital)

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A marketing communication from OPLC. Continental Coal is a corporate client of OPLC.

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CONTINENTAL COAL LTD 6.1Ramping up coal exports 11 March 2011

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Continental Coal reported a strong set of production results from its export dominated Ferreira mine and

Delta Processing plant. The results reinforce our view that Continental is successfully rejuvenating the

Ferreira mine with increased production and sales coinciding with a period of strong coal prices.

Export coal sales for January and February were 40,448 tonnes and 48,532 tonnes, exceeding

Decembers sales by 25% and 50% respectively. The company expects production to remain on track

during March and is targeting total export production of 141,000 tonnes for the quarter, in line with our

estimates. Future budgeted export sales guidance remains unchanged at 120,000 tonnes per quarter.

The increased production validates the companys earlier decision to appoint a new mining contractor.

Continental Coal has survived the last two months relatively unscathed by heavy rains, national strikes

and a number of train derailments on the Richards Bay coal line that have affected other producers.

The companys share price has somewhat languished since its 8.8 peak in late January, with the stock

trading in the 6.0 to 7.0 range in recent days. We argue that the stock has simply followed other coalequities and the coal price in recent weeks. Excluding any further near term volatility in coal prices, we

expect Continental Coals shares to return to trading based on fundamental factors. We expect the stock

to regain traction as the company proceeds with its aggressive growth plan. See inside for key catalysts.

We remain bullish on thermal coal. As a result of the potential growth in Asian demand, infrastructure

bottlenecks and the potential for more supply-side shocks, we believe that thermal coal prices remain

well supported above $100/tonne. It is our view that the long term outlook for global energy demand and

coal consumption presents a compelling investment case.

We reiterate our price target of A$0.13 per fully diluted share. Given the recent share price weakness, we

believe the shares now represent a cheap entry point into a quality coal play. With strong leverage to

thermal coal prices and a quality pipeline of predominantly export projects, we expect a significant re-rating of the stock as Continental ramps up production.

Recommendation BUY

Sector: Mining

Exchange & Ticker: ASX: CCC

Shares in issue: 2,993m

Fully diluted shares 3,600m

Market cap: A$183m

Target Price: 13

ANALYST: Phil Swinfen

+44(0)20 7518 2609

[email protected]

CORPORATE BROKING: Forbes Cutler

+44(0)20 7518 2603

[email protected]


2/11

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Ferreira update strong export coal sales

Continental Coal (ASX: CCC) released an update on export coal sales from the companys Ferreira mine

and Delta Processing operations in South Africa. The company has reported a strong set of production

results for the first two months of the March quarter, in line with both company expectations and our

forecasts.

Export coal sales for January and February were 40,448 tonnes and 48,532 tonnes, exceeding

Decembers sales by 25% and 50% respectively. The company expects production to remain on track

during March and is targeting total export production of 141,000 tonnes, in line with our existing estimate

of 140,000 tonnes. This implies export sales of approximately 51,000 tonnes in March to finish off the

quarter. Going forward we retain our forecast of 120,000 tonnes of export coal sales per quarter.

The latest results reinforce our view that Continental Coal is successfully rejuvenating the Ferreira mine

with increased production and sales coinciding with a period of strong coal prices. The average realised

net preliminary export thermal coal price received for sales during the months of January and February

has been US$118/tonne.

For the quarter to date, the Ferreira mine produced 46,697 tonnes of a primary export thermal coal

product and a further 20,568 tonnes of a secondary domestic thermal coal product. A total export yield of

59% was achieved representing a 20% improvement over the December quarter.

The company estimates total FOB costs of between US$70 and US$80 per tonne for the quarter which is

in line with our modelled forecast of US$75 per tonne.

Continentals second shipment of export coal from the Richards Bay Coal Terminal was made on 7

March 2011 for an amount of 32,996 tonnes. A similar scheduled shipment is due to be made in April.

Total export coal sales from Ferreira mine / Delta Processing Plant

Source: Continental Coal, OPL estimates

Dodging the bullet of strikes, derailments and heavy rains

Continental Coal has survived the last two months relatively unscathed by heavy rains, national strikes

and a number of train derailments on the Richards Bay coal line that have affected other producers. Five

production days were lost at the Ferreira mine in January, due to the holiday period and minor industrial

action and heavy rains. However, the Delta Processing Plant operated continually throughout this period,

unaffected by the rains and national strikes. The plant processed 122,970 tonnes during the first two

months of the quarter.

OPL forecast

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Nov-10 Dec-10 Jan-11 Feb-11 Mar-11

Exportcoalsales(tonnes)


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Ringing the changes is starting to pay off

Continental Coal has been ringing the changes at Ferreira in order to run the operation more efficiently.

Having made some tough decisions since taking over the operation, the company is now starting to see

some progress. In our view, this adds further kudos to the company and reaffirms our view that the

management are experienced operators capable of extracting the best from an operation.

The turning point was the decision to replace the mining contractor in October due to poor operational

performance of the previous contractor. The new mining contractor, Steffanutti Stocks Mining was

mobilised to site and commenced mining activities in the Northern Pit. Continental revised the mining

plan and schedule for the Northern Pit in conjunction with Steffanutti in order to increase productivity and

reduce mining costs.

The establishment of the Northern Pit mining operations and change of contractor has already produced

results and the improved operating performance can be seen clearly from the production graph on the

preceding page. The largest increase in run of mine (ROM) production was from January to February

and demonstrates the success and efficiency of the new contractor.

As a result, the company believes that a corresponding reduction in mining costs will be forthcoming,especially considering that the higher cost to establish the initial boxcut at the Northern Pit operation is

now out of the way.

High utilisation rates key to success

In part, the companys success throughout a time plagued by adverse weather and strike action is due to

the high utilisation rate at the Delta Processing plant.

The high level of utilisation is down to the ability of Continental to source raw export quality coal from

neighbouring mines for treatment in the plant. Many of the neighbouring mines do not have processing

facilities and thus cannot wash their coal in order to achieve an export thermal coal product. Thus, bybuying in raw ROM coal from other operations, Continental can keep utilisation rates at the Delta

Processing plant high to achieve improved efficiencies and lower costs.

This reinforces the value of the Delta Plant as a strategic hub in the area, with the ability to process ROM

coal directly from the companys own Ferreira mine, or by buying in coal from other operations.

Continentals Delta Processing plant and Anthra rail siding

Source: Continental Coal


4/11

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Share price cools off but in line with coal prices

Continental Coals (CCC) share price has somewhat languished since its 8.8 peak in mid to late

January, with the stock trading in the 6.0 to 7.0 range in recent days. Whilst this is rather

disappointing in absolute terms, we do not believe there is any cause for alarm if CCC is viewed in

relative terms against other companies in the sector and in context with global coal prices.

Source: Proquote

The price index for coal exported from Richards Bay in South Africa (where CCC sends its export coal)

hit a peak of close to US$130/tonne in mid-January. Since then, coal prices have moderated from their

peak as drier weather has returned to north eastern Australia, prompting the resumption of exports and

shipping from the region.

From the chart below it is clear that CCCs share price shows a degree of correlation to coal prices,

offering part explanation for the stocks price performance in 2011. Both CCC and Coal of Africa (CZL.L),

a close comparator to CCC, have largely tracked the coal price over the last three months. Thecorrelation is particularly apparent from mid-December at the start of the strong upswing in thermal coal

prices to mid-January where the coal and share prices declined by an equivalent degree.

Going forward, we would now expect a degree of decoupling between equity prices and the coal price.

Thermal coal prices have stabilised in recent weeks as force majeure at many Australian operations is

lifted and operations move back to normality. Thus, excluding any further near term volatility in coal price

we expect Continental Coals shares to return to trading based on fundamental factors. We expect the

stock to regain traction as the company proceeds with its aggressive growth plan. See Key Catalysts on

the next page for more information on Continental Coals potential news flow over the next few months.

Source: Proquote, OPL estimates

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Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11

Volume(ms

hares)

SharePrice(Aus)

Volume (RHS) CCC.AX Closing Price (LHS)

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Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11

Indextobase100

RB export coal price CCC.AX CZA.L


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Key Catalysts

After the flurry of activity relating to the acquisition of Mashala Resources late last year, 2011 has thus far

been a relatively quiet period for Continental Coal, certainly on the press release front. However, from the

latest export update at Ferreira, it is clear that behind the scenes it is still very much full steam ahead.

Over the coming months we expect robust news flow as outlined in the chart below and in particular the

company expects progress on a number of fronts during Q1 2011 including:

First full quarter of export coal sales from Ferreira

An update on major logistic developments in respect of port allocation for increased exports

Updated reserve and resource update for Continentals South African operations

Commencement of mine development at Penumbra

De Wittekrans BFS progress

Start of exploration in Botswana and mobilisation of drilling contractors

Kenya Mui Coal Basin submission of tender to participate in coal exploration

The companys current focus is on the development of two new mines during 2011 with Penumbra thenext cab off the rank, followed by De Wittekrans. Continental Coal is undergoing a period of rapid growth

that should take the company from two to four operating mines by the end of the year. In particular, we

believe that any news on mine development and finalisation of project finance at Penumbra should justify

a rerating of the stock.

This expansion forms the backbone of the companys target run rate of 7 Mtpa ROM coal by 2012

compared to current production running at the annualised rate of 1.9 Mtpa ROM Coal. We retain our view

that the company has the potential to become a leading mid-tier coal player in the sector.

In line with the companys growing ambitions, Continental Coal is also busy building the framework for a

planned listing on the London AIM market with a potential listing before the end of Q2 2011.

Source: Old Park Lane Capital Estimates

Cal yr

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Mashala transaction completed (to 64.1%)

Penumbra - development approved

First export coal sales to EDF Trading

Acquisition of remaining 35.9% of Mashala

First full quarter of export coal sales

Penumbra project financing

Commence mine development at Penumbra

Reserve and Resource update (S.Africa projects)

AIM Listing in London

Botswana drill results

De Wittekrans BFS completion (June 2011)

New Order Mining Right approval - De Wittekrans

Penumbra underground - first coal

De Wittekrans mining decision and construction

Vlakplaats - BFS completion

2010A 2011F 2012F


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Strong Project Pipeline

Continental Coal has two operating thermal coal mines and majority interests in a portfolio of export and

domestic thermal coal projects in South Africa. The company has over 600 Mt of gross in-situ coal

resources and a production target rate of 7 Mtpa ROM run of mine coal by 2012.

Penumbra and De Wittekrans are the next projects to be developed, with Penumbra the most

advanced. The company then plans to develop the wider De Wittekrans complex which may include the

Vaalbank deposit. In late 2010, Continental also entered into an agreement to jointly develop the

Vlakplaats deposit with KORES, the Korea Resources Corporation which is the Korean Governments

mining vehicle. The partners aim to complete a bankable feasibility study within the next 12 to 18 months.

In addition the company has a further interest in a broad portfolio of pre-development projects including a

6 to 7 billion tonne coal exploration target in Botswana. At the moment this is a conceptual target, as

insufficient exploration has been undertaken in order to define a JORC compliant resource. During the

quarter, the company approved a ZAR 90 million exploration budget for Botswana which will include a 90

hole drill programme. Along with an accompanying coal quality analysis, this will allow an initial JORC

compliant resource to be calculated. This exceptional opportunity is of course tempered by the currentroad and rail infrastructure which requires significant investment for the district to succeed.

In Kenya, the Company has submitted an Expression of Interest to the Kenyan Ministry of Energy to

participate in coal exploration and development of Kenyas Mui Coal Basin. The Company received a

Notification of Successful Bidder from the Ministry of Energy and will over the March 2011 quarter

submit a detailed technical and financial proposal for the Companys proposed exploration, exploitation

and development of identified coal deposits within the Mui Coal Basin.

The company is also reviewing a number of additional acquisition and development opportunities for both

thermal and coking coal assets in Africa as part of the companys growth and diversification plan.

Continental Coals project pipeline

Source: Continental Coal


7/11

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Coal prices slip from peak but outlook remains robust

The price index for coal exported from Richards Bay in South Africa hit a peak of close to US$130/tonne

in mid-January. Since then, coal prices have moderated from their peak as drier weather has returned to

north eastern Australia. The situation is not as rosy in Indonesia where monsoonal wet weather is

expected to continue until June, and may provide a further fillip to thermal coal prices.

The strength in thermal coal export prices throughout late 2011 and into the beginning of 2011 was

fuelled by monsoonal conditions in Australia and Indonesia. The adverse impacts of flooding included

disruption to road access, production and rail transportation. This in turn impacted freight rates which

remain depressed and at levels not seen since the depth of the financial crisis in late 2008.

Many of the big players including Anglo American, Xstrata and Rio Tinto were forced to declare force

majeure on output from coal mines, largely in Queensland. The region mainly produces coking coal but

thermal coal producing mines were also affected. Industry sources estimate that by the end of 2010

approximately 30% of Australias annual coal exports were under force majeure. In recent weeks, drier

conditions in Australia have prevailed and exports have resumed with force majeure lifted at many

operations signalling a return to contracted export shipments.

We remain bullish on the outlook for thermal coal prices given the on-going risk of infrastructure

bottlenecks and potential for further supply-side shocks. This is coupled with our belief that demand for

thermal coal will grow for use in power generation in Asia, primarily India. India is currently the fastest

growing coal importer as domestic production struggles to keep pace with surging power demand.

Our forward coal price assumptions (see table below) are relatively conservative, in particular our long

term price forecast of US$80/tonne. As a result of the potential growth in Asian demand, infrastructure

bottlenecks and the potential for more supply-side shocks we believe that the Richards Bay API4 price

remains well supported above the $100/tonne level.

We note that the new projects being developed in Continental Coals pipeline have a strong export focusand will increase the companys exposure to export thermal coal prices. This of course must be balanced

against any further strengthening in the Rand, inexplicably linked to the pace of global recovery.

Source: OPL estimates, Continental Coal, Mining Journal

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US$/tonne

RB API4 Coal Price (US$/tonne)

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US$/tonne

RB API4 Coal Price (US$/tonne)

OPL LT coal price

OPL forward coal price assumptions (US$/tonne)

Cal yr 2011 2012 2013 2014 2015 LT

Export coal forecast $118 $115 $110 $110 $110 $80

Domestic coal $26 $26 $26 $26 $26 $26


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Coal remains the backbone of global power generation

We remain bullish on thermal coal. Whilst the threat of further supply-side shocks and infrastructure

bottlenecks certainly has the potential to support prices over the near term, we believe that the long term

outlook for global energy demand and coal consumption should act as the main investment driver.

The latest statistics from the EIA (US Energy Information Administration) suggests that the growth rate of

world coal consumption will increase by 56% from 132 quadrillion Btu in 2007 to over 206 quadrillion Btu

by 2035. The majority of this increase is forecast to be driven by demand in Asia, especially India.

EIA forecast of growth in world coal consumption and imports

Source: EIA, International Energy Statistics database (as of November 2009), SSYs Coal Trade Forecast, Vol. 17, No. 4.

The EIA expects China to remain a net importer through to 2035, but even with a substantial increase in

imports, a large share of the coal consumed in China will continue to be supplied by its own coal mines.

Nevertheless, coal remains the leading source of energy for Chinas growing industrial sector.

Even more intriguing is India, where the EIA expects 56% of the growth in coal consumption to be in the

power sector and the remainder in the industrial sector. As a result, the EIA estimates that Indias coal-

fired generating capacity must increase from 84 gigawatts in 2007 to 135 gigawatts in 2035. The EIA

estimates that India's coal imports will be four times the 2008 level by 2035, spurred by rising imports ofboth coking and steam coal.

Due to lack of investment and on-going infrastructure issues, India is faced with domestic coal supply

and quality issues. Indian domestic coal is relatively poor quality in comparison to foreign sourced coal.

The country is building new supply with new power stations under construction but construction delays

are commonplace in India and demand for imports continues to grow. According to the EIA, planned

infrastructure improvements include coastal port expansions at Goa and Paradip in order to overcome

port bottlenecks.

The global reliance on coal and the forecast demand growth represents an opportunity for Continental

Coal as the company continues on its strong growth curve and increases export coal production.

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1980 1995 2007 2020 2035

(quadrillion Btu)

History EIA Projections

Total

Non-OECD

OECD

World Coal consumption by country grouping, 1980-2035

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Coal imports by major importing region, 1995-2035


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Coal is forecast to increase share of power generation

GDP growth is a principal driver of growth in demand for energy, and according to the IEA World Energy

Outlook, coal is set to increase its share of primary energy demand, when compared to other sources

such as gas, oil and nuclear energy. See chart below.

Couple Indias shortfall in domestic coal production with the high forecast GDP growth for the country

and India then emerges as a key driver of export demand for thermal coal.

According to Richards Bay Coal Terminal data, the percentage of coal being exported to India from

Richards Bay has increased to 30% in 2010, from 5% in 2008. The implication is that coal that would

have previously been supplied to Eskom is now being shipped to India because producers can secure

higher prices.

As such, Indian companies have been active in Southern Africa and other coal exporting regions to

secure long term supplies of thermal coal. A lower quality thermal coal product called RB3 (5,600 kCal)

has been developed largely for Indian markets.

Coal consumption growth driven by Asia Coal to increase share of generation

Source: EIA, International Energy Statistics database (as of November 2009), IEA World Energy Outlook 2009.

Model Update

We have updated our model to reflect production results for the first two months of the March quarter.

Our valuation remains at A$0.13 per share (fully diluted) and we retain our buy recommendation.

Given the recent decline in the companys share price, we believe that shares now represent a very

cheap entry point into a quality coal play. As such we are confident that the stock will show significant

upside throughout 2011 as the company ramps up export production.

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Eurasia

Non-OECD Asia Other Non-OECD

Total Non-OECD

1980 2007

2020 2035

Non-OECD coal consumption by region

(quadrillion Btu)

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Coal Oil Gas Nuclear Hydro Biomass Other

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* Million tonnes of oil equivalent

* Mtoe Coal forecast to increase share of primary energy


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Continental Coal LtdASX:CCC

All A$m unless noted / Fiscal Year End June. (A) Actual, (F) Forecast

CAPITAL STUCTURE METRICS 2009A 2010A 2011F 2012F 2013F

Share Price A$0.061 Ticker CCC Shares Outstanding - basic (m) 281 1,023 2,993 3,919 3,919

Shares Outstanding (m) 2,993 Market Capitalisation A$183 Shares Outstanding - FD (m) 1,126 1,798 3,600 4,526 4,526

Shares Fully Diluted (m) 3,600 12-Month High A$0.09 EPS (A$/sh) -0.05 -0.03 0.00 0.00 0.02Net Debt (Cash) $m A$12.0 12-Month Low A$0.03 EPS Growth - 49% 101% 25% 7823%

P/NAV 0.49 Enterprise Value (EV) A$193 P/E - - 274x 218x 3x

Return to target valuation 106% CFPS (A$/sh) -0.02 -0.02 0.00 0.00 0.03

ASSUMPTIONS 2009A 2010A 2011F 2012F 2013F P/CFPS - - 103x 75x 2x

Export thermal coal (RB) US$/t 92 73 108 115 113 EBITDA -3.9 -13.1 13.2 26.5 119.2

Domestic thermal coal US$/t 26 26 26 26 26 EV/EBITDA (x) - - 14.6 7.3 1.6

ZAR/USD Exchange rate ZAR/US$ 9.00 7.58 7.49 7.94 7.95 ROE 0% 0% -3% -1% 29%

ZAR/AUD Exchange ZAR/A$ 6.76 6.64 6.87 7.00 7.00 ROCE 0% 0% 4% 3% 24%

Debt-Equity ratio 109% 95% 68% 130% 73%

RESOURCES INCOME STATEMENT (A$m) 2009A 2010A 2011F 2012F 2013F

100% Project Basis Attributable Group Revenue 0.0 0.4 75.5 116.5 300.0

Resources (M&I) 191 Mt Resources (M&I) 162 Mt Cost of Sales 0.0 0.0 -47.3 -75.0 -165.9

Resources (Inferred) 441 Mt Resources (Inferred) 382 Mt Other expenses (inc G&A) -3.9 -13.5 -15.0 -15.0 -15.0

Resources (Total) 632 Mt Resources (Total) 543 Mt Depreciation 0.0 -0.1 -1.1 -2.1 -12.7

Finance costs -3.8 -12.3 -5.0 -14.4 -16.7

PRODUCTION & COSTS (attributable) 2009A 2010A 2011F 2012F 2013F Other (inc impairments) -6.8 -2.0 0.0 0.0 0.0ROM Coal 000t 0 64 1,405 2,083 5,520 Profit before tax -14.6 -27.5 7.1 10.0 89.8

Export Coal 000t 0 0 287 580 1,715 Tax 0.0 0.0 -6.4 -8.9 -3.0

Domestic Coal 000t 0 64 1,035 1,337 2,722 Disc. Operations -0.4 0.0 0.0 0.0 0.0

Opex per ROM tonne ZAR/t 0 120 232 244 196 Profit / Loss for the year -14.9 -27.5 0.7 1.1 86.7

Minority interests 0.0 -2.6 3.8 3.4 11.3

Net Profit attributable to parent -14.9 -24.9 -3.2 -2.3 75.5

CASH FLOW (A$m) 2009A 2010A 2011F 2012F 2013F

Profit after tax -14.9 -27.5 0.7 1.1 86.7

Depreciation 0.0 0.1 1.1 2.1 12.7

Other 9 10 0 0 0

Net change in working capital 3 16 0 34 25

Cash flow from operations -2.7 -1.0 1.8 37.0 124.0

Acquisitions / Disposals (net) 1 0 -31 -14 0

Capex (inc exploration) 0 -22 -56 -199 -35

Other -18 -9 0 0 0

Cash from investing activities -16 -30 -88 -213 -35

Issue of shares 3 19 63 65 0

Net borrowing 15 12 32 115 -60

Cash from financing activities 18 31 95 180 -60

Net Increase (Decrease) In Cash -1 0 10 4 29

Beginning Cash 1 0 0 10 14

PROFILE Ending cash 0 0 10 14 43

Location South Africa, Botswana BALANCE SHEET (A$m) 2009A 2010A 2011F 2012F 2013F

Commodities Thermal Coal (export and domestic) Cash 0 0 10 14 43

Other current assets 16 12 3 5 6

NET ASSET VALUATION Fully diluted Total current assets 16 12 12 18 49

Coal Projects Type Discount Interest * % NAV A$m A$/sh Property, plant equipment 0 0 77 267 270

Vlakvarkfontein Domestic 8% 60% 10% 50 0.01 Other fixed assets 37 66 86 106 126

Penumbra UG Export /Domestic 10% 100% 21% 109 0.03 Total non-current assets 37 66 162 373 395

Ferreira Export /Domestic 8% 100% 4% 22 0.01 Total assets 53 78 174 391 444

De Wittekrans Export /Domestic 15% 100% 47% 241 0.07 ST borrowing 8 20 0 0 0Vaalbank Export /Domestic 15% 75% 13% 64 0.02 Other current liabilities 5 16 16 47 70

Other Projects - - - 4% 22 0.01 Total current liabilities 13 36 16 47 70

Botswana - 100% 0% 0 0.00 LT borrowing 13 0 52 167 107

Net Operating Assets 100% A$509 A$0.14 Other non-current liabilities 1 2 2 7 11

Working Capital (1) (0.00) Total non-current liabilities 14 2 54 174 118

LT Debt (25) (0.01) Total Liabilities 28 38 70 221 187

Corporate G&A (31) (0.01) Shareholder's Equity 25 40 104 170 257

Net Asset Va lue $452 A$0.13 Total Liab. & S'holder's equity 53 78 174 391 444

*interest post Mashala transaction

Source: Company reports, Old Park Lane Capital estimates

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ROM coal product ion forecast (Cal yr basis)

Total Domestic Total Export Total ROM


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DISCLOSURES AND RISK WARNING

The recommendation system used for this research is as follows. We expect the indicated target price relative to the

FT All Share Index to be achieved with 12 months on the date of this publication. A Hold indicates expected

performance relative to this index of +/-10%, a Buy indicates expected outperformance of >10% and a Sell

indicates underperformance of >10%.

This Marketing Communication is provided for information purposes only. It does not constitute a personal

recommendation and should not be construed as an offer or solicitation for investment. This publication is not

intended to be an offer to buy or sell any securities of any of the companies referred to herein and any opinions

expressed are subject to change without notice. Recommendations may not be suitable for all recipients of this

publication and if you have any doubt you should seek advice from a financial adviser. Except for any liability owed

under FSMA 200 or the regulatory system, Old Park Lane Capital plc (OPLC) accepts no liability for any losses

which may be incurred by the client acting on such recommendation.

Companies mentioned in this research/document may be corporate finance clients of OPLC. The analyst(s)

responsible for this document may receive compensation based either directly or indirectly on profits derived from

fund management activities. OPLC its directors and employees may have a position or holding in any of the aboveinvestments or in a related investment, therefore OPLC is not holding out this research as being impartial or

objective as defined by the FSA Conduct of Business Rule 7.16.5, as set out in our conflicts of interest policy and

procedures.

This document has been prepared, approved and issued by OPLC on the basis of publicly available information,

internally developed data and other sources believed to be reliable. All reasonable care has been taken to ensure

the facts stated and opinions given are fair and not knowingly misleading in whole or part. Prices and factual details

are deemed to be correct at the time of publication. However, OPLC offers no guarantee as to the accuracy or

completeness of any such information or data. The views expressed are as at the date stated and are subject to

change at any time

There is an extra risk of losing money when shares are bought in some smaller companies, including those quoted

on AIM, sometimes known as penny shares. There can be a big difference between the buying price and the

selling price of these shares. If they have to be sold immediately, you may get back much less than you paid for

them. The price may change quickly and it may go down as well as up. Past performance of investments referred to

above is not necessarily a guide to future performance and the value of the investment may go down as well as up.

Some investments are not readily realisable and investors may have difficulty in selling or realising the investment

or obtaining reliable information on the value or risks associated with the investment.

This publication may not be reproduced or copies circulated without authority.

Old Park Lane Capital plc is a member of the London Stock Exchange and is authorised and regulated by the

Financial Services Authority (FSA no. 477870). Registered address: 49 Berkeley Square, Mayfair, London, W1J4AZ.

Analyst Report - 20110311 - Continental Coal (Old Park Lane Capital)

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Transcript of Analyst Report - 20110311 - Continental Coal (Old Park Lane Capital)