Puda Coal Inc (PUDA)

[Drexion2004]

Yep, thats my view on it as well. I don't think they will dilute to acquire 18% of Jinghe though, we have the cash on hand for the final payment (I think its like 6-7M more?).

The dilution will come to do the phase-1 consolidation for the 450k production (good quality thermal coal) of the 2 mines. I'd guess the cost of that acquisition will be around 40M (Don't ask where I get this number). Assuming a $70 per ton cost and 40% net margins, that acquisition would pay for itself in roughly 3 years... Not bad if we can get it at that price, even if we dilute at this $5.30 PPS level. My take on it is we will make the phase-1 consolidation acquisition in 2 installments, some will be via bank lines, some financing... I'll model around 20M financing via a secondary (No warrants, Laby Wu indicated she really dislikes those). I would predict news on this front before the year ends.

Thats my take anyhow. We'll see how accurate it is ;).

-Fernando