This is an interesting one (to me at least!) that I have been keeping my eye on recently and that had a big increase in the sp today (35%).

However even after a 35% increase today, ADD has a Market cap of only about $5 mil (183m shares @ 2.7c)

Cash at 30 June 2010 was $2.5m

So EV = $2.5m

The thing is, coal mining is planned to commence on their 9Mt JORC thermal coal resource located in Sumatra, Indonesia, later this year.
Draft mine plan and financial model have been completed (but no details released to ASX).

ADD states that it “intends to establish itself as a reliable and dependable Indonesian coal producer, leveraging its Australian mining expertise and best practices against the low operating costs of coal mining in Indonesia”.

ADD believe “that Indonesia’s new mining act has flagged an opportunity for explorers to get involved in what is a strategically located country with significant opportunities to meet world and particularly Asian demand for minerals and energy.”

However, the fact that they are planning to be mining without any ASX disclosure of a mining license, a BFS or a mining contractor does perhaps ring some alarm bells.

But even allowing for a couple of directors who are on the little less than reputable side IMO (Roger Steinpreis and Richard Poole), an EV of just $2.5m for a company that has advised the market on a number of times that they will be producing medium to high grade thermal coal by the end of the year, seems a little peculiar.

The chat on h/c is that the sp is being held down for a capital raising, which does have some merit, presumably a rights issue to enable the major holders (which include IB Daiwa) to average down their holdings. Which would suggest that post capital raising, once all the cheap shares are issued, the sp will re-rate....Does sound as though there are a bunch of unhappy punters on h/c who have ridden ADD a long way down.

Don’t know if there is more to the story, but it does look like an interesting micro-cap to follow...