Kentucky Energy (fka QMIN)

[Anvil]

Evens:

They would be lucky to get $10-15MM for the mine. Recoverable coal is the number you want to look at. that is approximately 5MM tons. Then you need to wash it. Gwenco has been getting a yield of 30%. But assume it gets better up to 50%. Then you have 2.5MM clean coal spread over 5-6 years. At $40/ton profit, that is $100MM. But a buyer has all the mining risks, needs to have/purchase the right equipment and takes the pricing risk. As quickly as coal prices have gone up, it can come down.

The twist here is that Gene has probably lost control of the mine to the dip lender. If you offer Mendriatta an extra $5MM above what he is owed, and pay off the other creditors, you probably can buy the mine.