SGZH – 8/2/2010 review
They currently have 25.2M metric tons in place resources to which mining rights relate. This bakes down to 12.5M metric tons of resources.
They are looking to buy 70% of 143 metric tons of other mines for $100M, of which they will pay $30M in cash. The price in stock is a function of the stock price upon the closing of the deal.
They expect $50M of revenues from this mine in 2011 at least.
In 2007 they made 34M top line, 13M bottom line
In 2008, they made 57M top line, 23M bottom line
The average selling price per tonne for 2008 was approximately $33.77, compared to the average selling price of approximately $29.64 for 2007, an increase of 14%.
That suggests that in 2008 they mined 1.68M tons.
Our total sales volume was 1,666,681 tonnes for the year of 2008 (taking into account both twelve-month sales volume of Xing An and nine-months sales volume of Tong Gong from the reverse acquisition date), as compared to 1,166,585 tonnes of sales for the year of 2007 (taking into account of only Xing An’s sales volume), an increase of approximately 43%.
Sales. Our revenues are derived primarily from the sales of coal. During 2009, we had sales of $65.00 million compared to $57.13 million for 2008, an increase of approximately 14%. The increase in sales is primarily due to increase in our selling price. The average selling price per ton for 2009 was $49.10, compared to $37.86 for 2008, an increase of 30%. Our total sales volume was 1,323,845 tons for 2009, compared to 1,666,681 tons for 2008 (taking into account both twelve-month sales volume of Xing An and nine-months sales volume of Tong Gong from the reverse acquisition date), a decrease of approximately 21%. The decrease in sales volume was mainly due to the temporary closing of a major power plant customer for one month in July for overhauling and maintenance of its boilers, and decrease in our brokerage coal due to increased purchase cost. Our high average selling price for the year of 2009 was a result of adjusting our selling price according to the market price in Heilongjiang province, and our selling price can vary dramatically depending on the prevailing market price of coal in Heilongjiang Province.
Q1 2010
Sales. Our revenues are derived from the sales of coal. During the three months ended March 31, 2010, we had sales of $12.56 million compared to $20.76 million for the same period of 2009, a decrease of approximately 40%. The decrease in sales is primarily due to decreased production of Xing An Mines as a result of mine maintenance and retrofit projects commenced since the end of fiscal 2009. The projects are expected to be completed in July, 2010. We expect that these mine improvements will improve efficiencies, lower costs and greatly enhance our growth and profitability once completed. The average selling price per ton for the first quarter of 2010 was $47.55 as compared to $56.14 for the same period of 2009, a decrease of 15%, resulting from a decrease in average market selling price of coal in the Heilongjiang Province. Our total sales volume was 264,122 tons for the three months ended March 31, 2010, compared to 369,784 tons for the same period of 2009, a decrease of approximately 29%. The decrease in sales volume was mainly due to temporary decreased production volume at the Xing An Mines.
Q3 2009
Sales. Our revenues are derived primarily from the sales of coal. For the nine months ended September 30, 2009, we had sales of $54.2 million as compared to sales of $42.91 million for the nine months ended September 30, 2008, an increase of approximately 26%. The increase in sales revenue is primarily due to increase in our selling price. The average selling price per ton for the nine months of 2009 was approximately $50.79, compared to the average selling price of approximately $30.37 per ton for the nine months of 2008, an increase of 67%. Our total sales volume in tons was 1,067,132 tons for nine months of 2009 (combining the sales volumes of Xing An and Tong Gong), as compared to 1,275,280 tons of sales for the nine months of 2008 (reflecting 9 months of Xing An’s sales volume and 6 months of Tong Gong’s sales volume) a decrease of 208,148 tons or approximately 16%. The decrease in sales volume was mainly due to the temporary closing of a major power plant customer for one month in July for overhauling and maintenance of its boilers. Our high average selling price for the nine months of 2009 was a result of adjusting our selling price in 2009 according to the market price in Heilongjiang province, and our selling price can vary dramatically depending on the prevailing market price of coal in Heilongjiang Province.
Q2 2009
Our total sales volume was 857,339 tonnes for the first six months of 2009 (combining the sales volumes of Xing An and Tong Gong), as compared to 865,854 tonnes of sales for the first six months of 2008 (reflecting 6 months of Xing An’s sales volume and 3 months of Tonggong’s sales volume) a slight decrease of 8,515 tonnes or approximately 1%. We plan our monthly sales volumes in order to pace our production throughout the year,
Q1 2009
Our total sales volume was 369,784 tonnes for the first quarter of 2009 (combining the sales volumes of Xing An and Tong Gong), as compared to 472,019 tonnes of sales for the first quarter of 2008 (reflecting only Xing An’s sales volume) a decrease of 102,235 tonnes or approximately 22%. We plan our monthly sales volumes in order to pace our production throughout the year, based on purchase orders typically signed 2 to 4 months in advance of the period reported, and the decrease in sales volume during the first three months of 2009 is a result of such planning.
Let’s conservatively use 2008 net profit margins. 46%
