CHGY: When government is on your back, even PIIGS can fly (:-. Quotas are PERMITTED by government. It is matter of time for CHGY to get a good target to acquire now. With current share price, debt finance is the only way to go. When government is in, it won't be hard to get loan from bank.
Recent Significant Changes
Through Coal Group, we produced and sold 352,230 and 806,439 tons of coal in the three and nine month periods ended August 31, 2011 respectively at our Laiyegou coal mine, representing a 64% and 35% increase, respectively, over the same periods in 2010. For the three and nine month periods ended August 31, 2011 we increased our coal trading volume by selling 603,981 tons and 985,824 tons of coal, representing a 319% and 98% increase, respectively, over the same periods in 2010. The significant increase in volume of coal produced and sold by Coal Group was mainly due to the permitted increase in the coal which can be produced and sold by the Company. Coal Group was selected by the Inner Mongolia Autonomous Region Coal Industry Bureau as one of the forty-four major coal enterprises in the Inner Mongolia region to be promoted by the Inner Mongolia government. The Company believes that this is why it was permitted to produce and sell more coal than previously allowed. Our operating assets are expected to rise in line with the increase in our coal production expanding business (see below discussion in “Cash Flows”). If the current trend continues to enable to allow the Company to produce and sell more coal than originally planned, the number of expected years of coal production will corresponding decline. We plan to leverage on the rich coal reserve in Inner Mongolia and acquire coal mine(s) if we can locate acceptable targets at reasonable prices, while continuing to increase our trading volume. We expect Coal Group to continue to be the key growth factor of the Company.
