Pond Creek Mine a Success For Quest
www.microstockprofits.com August 13, 2008
- Vol. 3 - No. 32
In This Issue
Striving for Increased Production at Mine
#1QMNM: A Low-Cost, High Potential Coal PlayQuest Undervalued?Massey Energy Co. (NYSE: MEE)Peabody Energy (NYSE: BTU)Arch Coal, Inc. (NYSE: ACI)Coal Market Trends
Sign Up
Quest Info
Quest Stock Quote
Quest News
Micro Stock Company News
Micro Stock Blog
Dear Edward,
Quest Minerals & Mining Corp. (OTCBB: QMNM) continues to hit the wire with news regarding positive developments at its Pond Creek, Ky coal mine.
The stock closed up more than 15% Tuesday at $.0134 on nearly 35,000,000 shares traded for one of its best days in quite some time. In my opinion, QMNM holds a deal of upside potential for a number of reasons. I'll touch on a few of them in a moment, but first, let's take a look at the two most recent developments at Quest's initial mine.
Striving for Increased Production at Mine
#1On 8/1 management noted that the property had recently achieved full production status and subsequently increased daily output expectations.
Today (8/12), Quest announced the addition of a "JOY (64'' Bed) 21SC shuttle car to its underground operations". According to the release, the new piece of equipment holds up to 5 tons of coal and works side by side with Quest's existing 4 ton shuttle car.
QMNM: A Low-Cost, High Potential Coal Play
Now, let's get back to some of the reasons that have me convinced that Quest is indeed a compelling and timely low-cost play on the booming coal industry.
1. Quest is a coal producing company: Gwenco, QMNM's wholly-owned subsidiary currently leases more than 700 acres of coal mines believed to hold approximately 12,999,000 tons of coal. Furthermore, Gwenco is already extracting enough coal to require the installation of a larger conveyor system that will facilitate the company's production of between 1,000 - 1,300 raw tons of coal per shift or 2,000 - 2,600 per day at Pond Creek.
2. Quest plans to monetize a portfolio of coal properties, not just one mine: QMNM has publicly stated plans to bring a second mine - Cedar Grove, KY - online by the end of 2008. Cedar Grove is located in very close proximity to Pond Creek and is expected to produce roughly identical output upon achieving full production status. In addition, initial engineering reports indicate that the coal located in Quest's second mine is of higher quality than that of Pond Creek.
3. Quest Represents a Low-Cost, High Potential Play on the Ongoing Coal Boom: As more established competitors including Arch Coal (NYSE: ACI) and Massey Energy (NYSE: MEE) continue to demand a premium from a stock price perspective, Quest represents a very compelling low cost opportunity to capitalize on the ongoing coal boom. Despite the obvious dangers of investing in companies currently in bankruptcy and trading in the penny range, the potential rewards are monumental.
4. QMNM Made a 4,000% Advance from 6/18 to 6/23: Quest recently advanced more than 4,000% in 3 days on total volume of 643,000,000 shares traded. QMNM closed at $.0016 on 6/18 and hit the high point of its recent run at $.075 on 6/23.
5. $8+ million contract in hand: Quest has a $8M contract in hand with Logan & Kanawha Co., LLC., and recently noted that it had verbally accepted a 10% higher strike price per ton on coal delivered through December of 2008
"Quest Minerals & Mining Initiates Coal Production At Pond Creek"
Quest Undervalued?
Since $.075, QMNM's trading behavior has been erratic at best. Despite tremendously high average daily trading volume for a penny stock trading in the sub $.10 range coupled with a number of stellar corporate announcements, the stock is parked below two cents. In my opinion, if Quest stays on track with recently stated production and rehab goals and quarterly financial reports become available, the stock will begin to receiving a more favorable valuation in comparison to its peers. Here's a quick look at some of them.
"The Dirt on Coal"
Massey Energy Co. (NYSE: MEE)
The Central Appalachian-based coal provider recently reported a stellar second quarter aside from a $245.3 million pre-tax charge related to ongoing litigation with Wheeling-Pittsburgh Steel Company. Some of the highlights include: Record coal revenues of $710.3 for a 38% year-over-year gain; EBITDA increased 65 percent to $199.0 million excluding ongoing litigation-related charges; Avg. revenue per produced ton of coal increased 28% y-o-y to $65.78; Average produced coal revenue per ton increased 28% to $65.78; Q2 operating cash margin per ton increased 83% to $15.94; 28% increase in avg. realized prices on coal shipped in Q2 of $65.78 per ton vs. $51.40 per ton in Q2 2007; 1st half coal revenue of $1.25 billion; and a net loss of $51.4 million or $0.64 per share
Massey also accompanied its commentary on second quarter operating results with forward looking guidance into the remainder of '09 and 2010. Important highlights include: Building out another 3 to 6 preparation plants and shipping load-outs over the next 2 years; Expects produced coal shipments of between 46.0 and 48.0 million tons in '09; Anticipated met coal output of between 13.0 to 14.0 million tons; Currently in possession of approximately 6 million tons of unsold or un-priced metallurgical quality coal for 2009; and 2009 cash costs anticipated in the $52.00 to $60.00 per ton range.
With close to 81 million shares outstanding and a P/E of 51.33, MEE closed 8/4/08 at $65.91. The stock has recently been upgraded by both Davenport and Standard & Poor's and continues to attract investor interest as energy demand surges.
Keine Empfehlung für irgendwas nur meine Meinung Jeder auf eigenes Riskio