Epic : CDN

Web Site : http://www.caledonresources.com

Broker Note 1st Aug 2007 : http://www.caledonresources.com/Images/FileManager/192.pdf


About Caledon: Caledon is quoted on the London AIM market (Ticker: CDN). In 2006, the Company acquired two Australian coal projects; the Cook mine and the Minyango coal project, both situated in the Bowen Basin, Queensland. The Cook mine is host to a mineable reserve of 17 Mt of coking and thermal coal with a 10 year mine plan. On 21 March 2007, Caledon announced commencement of production at the Cook mine with targeted output to reach a 100,000 tonnes per month rate by the end of 2007 and 1.5 million tonnes per annum in 2008. On 14 March 2007, the neighbouring Minyango project resource was brought to a JORC standard of 240 million tonnes which was an increase of 17% on original estimates. Caledons aim is to develop the Minyango project to potentially increase the Companys production in the near-term to accompany its already producing Cook mine project.

**********************************

Caledon Resources PLC Interview With:
Mark Trevan Managing Director

Dated September 20, 2007

http://www.wallstreetreporter.com/page.php?page=featured&id=26736

The big question remains over the Nov 15th Minyango final payment, given we have not see the Feasibility study, then as per the announcement it looks like a 3 month delay will come in, pushing this back to Feb 15th 08 - which would be good as it allows production and cash flow to grow.

This would also be good when you consider the smaller payment due for the loan notes in December, as it takes the pressure off there too.

A number of people have sold out and potentially taken short positions thinking a placing is coming very soon and they can get a low buy in price. Well, that remains to be seen..............a 3M X trade today clearing perhaps the overhang, might sugggest that a placing is not going to happen soon. Who knows.

With 100K production a month planned for year end, and the cash that generates, imv, CDN is undervalued by some margin.

Good news, coking coal spot prices now at 125$ per tonne, and the outlook is for further rises throughout the rest of this year and 2008 :)


http://www.telegraphindia.com/1071008/asp/business/story_8408562.asp


Hike in coke prices bugs steel makers

Mumbai, Oct. 7: Coking coal and metallurgical coke (metcoke) prices have started rising over the past few months, putting pressure on steel makers in

India and China even as they prepare to start negotiations on fresh supply contracts.

The price rise has been triggered by a supply shortage and strong demand emerging from China and India.

Metcoke is derived from coking coal and is primarily used by steel makers who use the blast furnace route.

Coking coal prices were soft for around two years but have started hardening in the past few months.

The price of good quality metallurgical coke rose from $150 per tonne in June 2006 to $260 in August. It is now ruling at $290 per tonne.

The landed cost has jumped to $320 per tonne because of rising freight costs.

The spot price of coking coal is now at $125 per tonne. Last year, annual contracts for coking coal were struck at $100 per tonne.

Industry circles say prices will continue to rise during the rest of the year and further harden next year.

This is the time when global steel mills start negotiating annual contracts with coking coal suppliers for the next year.

Sources here said the negotiations had already started between certain suppliers and Japanese steel mills.

Reports state that the prices that are being negotiated are around 5 to 10 per cent higher than last years level.

Industry circles say Indian steel makers such as Ispat Industries, Steel Authority of India Ltd and Tata Steel import coking coal and metcoke. Although companies such as Tata Steel have started buying into overseas mining assets, a large part of the industrys coking coal or metcoke requirements are still met through imports.

In August, Tata Steel became a strategic investor in Riverdales Mozambique Coal Project by acquiring a 35 per cent stake for A$100 million.

The hard coking coal derived from the project will be supplied to Corus facilities in the UK and Europe.

A lack of captive raw material source for coal and iron ore is a major weakness in the operations of Corus.

In 2006, Corus imported about 11 million tonnes of coal to feed its 19-million-tonne production capacity across plants in Europe. The coal, converted into coke for direct injection into blast furnaces, comes from Australia, Canada and the US.

It will also be used to meet Tata Steels own increased requirements in India.

The surge in prices is good news for companies such as Gujarat NRE Coke, which is the largest independent producer of metcoke in India.

The companys total coal resources are estimated at over 580 million tonnes.

Gujarat NRE Coke, which had posted losses in the first quarter of last fiscal, saw a sharp turnaround in its performance. The operating profit for the first quarter ended June 30 rose to Rs 62.68 crore compared with Rs 10.57 crore in the same period of the previous year.

Net profit jumped to nearly Rs 43 crore. The rise in coking coal prices has ignited the companys stock, which has jumped to over Rs 90 from just under Rs 30 a couple of months ago.

http://www.metalprices.com/metalNews.asp?id=60040&svc=ODJ&type=1

Metal News
09 Oct 2007 12:50:00 AM

.......................For 2008, UBS has raised its copper forecast by 8% to US$3.25 per pound,nickel by 15% to US$13.25 per pound, gold by 17% to US$7.60 per pound, iron ore fines by 8% to US$109 per long ton unit, and hard coking coal by 13% to US$130 per metric ton, but cut uranium by 52% to US$95 per pound. UBS said its iron ore forecast now represents a 35% increase in the benchmark contract price, from a previous forecast of a 25% rise......................

I personaly think this one is way undervalued by the market.

Of course the green lobby wont agree but in business its usually getting a supply of what is the cheapest form of fuel for future progress.

Make no doubt about it coal is going to play a big part in the energy markets going forward.

You are a busy ramper!!

IMHO this stock is way overvalued and has been touted up by people who should know better.The SP is an indication of this!!

Another big X trade, this time 1.5m at 36p (higher price than the 3m X trade on the 11th).

More overhang cleared up then.............

Plenty of big trades today as well as the large X, hopefully its now building a base as lines of stock pass from weak to strong, and CDN can soon commence a decent move upwards.

Spot on PP.

aUSTRALIA is floating on coal and this minnow of a share is going nowhere.
Punters beware some people are pumping this stock!!

Ticking up nicely today.

Maybe I was a bit hasty is my opinion.

I've been watching this the last month or so with a view to taking a position here. Looks promising albeit speculative.

Yes it does now.
As I have posted before I think there could be some people pumping this one up but the move up today has surprised me.
There could be something in this one.
Then again the aim market is spells danger for inexperienced investors.
You could lose your shirt!!!

Wow salt and pepper at the ready something is happening!!!

Rumour mill is the new ABM25 will be cutting coal next week.......lets hope so, and hope its implementation goes smoothly and we get the big upgrade to production for Nov and Dec.

Transco,

I respect your opinion and warning, however feeled compelled to say that Papal is a pretty good in fact very good stock picker, he/she gets most of the selections very right.

While not obviously a reason to follow his/her lead, it does show that he/she picks stocks using sound fundamentals and prospects.

Apologies for the political correctness.

Stevo,

Respect man!

I have found the need to be very very careful when taking advice from these boards, especially when it involves AIM stocks.

I just say this from experience. - In term of the facts I really dont see why Caledon is special there are lots of other mining companies around so why should they be so undervalued.

I just dont see an argument for buying them over others in the market.

I do understand your point, maybe they are undervalued because there are just so many mining stocks around with great potential, this is a supercycle after all, hopefully it will last until my retirement 20+ years to go lol.

Or if I cock it all up 29+

steveo, given my bank balance, do not follow any of my stocks........... ;) LOL


transco, you value a company on what it has, and what it is producing. Caledon should soon be producing 100K tonnes a month, that is worth around 12 million dollars sales revenue a month.

Take that level of production and put it on a PER of say 6 to 8 and what do you have ?

You have CDN being grossly undervalued at present.

They still have to prove the ABM25 can work a cutting coal........if they do, then the shares should rerate upwards.