NEW HOPE COAL (NHC)

I wacked more than a few Dollars into NHC the other day Dave,

So do hope that WE are BOTH are right...

My Maths says that Margin of Safety is on our side.....Dave

Below are the NUMBERS and an article from today, courtesy of the AFR. 28/9/05

New Hope promises good times will roll



Stephen Wisenthal 28 September 2005

Australian Financial Review

NEW HOPE COAL (ASX Code: NHC)

Full year 2005($m) 2004($m)

Sales 230.7 191.0

Pretax 536.5 108.0

Net (op) 96.7 41.0

Net 463.3 59.4

EPS 59.1 ¢ 7.4 ¢

Interim div 2.75 ¢p 0.75 ¢ f

Final div* 3 ¢ f 1.5 ¢ f

Special div* 13 ¢ f

Capital return** 10 ¢

Shares (yest) $1.38 +7 ¢

*Payable November 16 **Payable December/January, subject to tax ruling Coalminer New Hope will return to shareholders half the $366.7 million profit

from the sale of its Indonesian mines, keeping the rest for expansion projects in Queensland.

The miner, controlled by investment group Washington H Soul Pattinson, increased its net profit from $59.4 million a year earlier to $463.3 million for the 12 months ended July 31. Operating earnings more than doubled to $96.7 million as the company increased production in Australia and benefited from high coal prices.

This year's result was likely to be similar to last year's, said New Hope chairman Robert Millner, who also chairs Soul Pattinson. "Even though coal prices have suffered a little bit, most of our production is locked in until the end of March at the old higher prices," he said.

Interest on New Hope's cash hoard would make up for the loss of earnings from its stake in the PT Adaro mine in Indonesia, the largest open-cut coalmine in the southern hemisphere, which was sold for $US406 million in June to a consortium of Indonesian, Singaporean and US-based investors.

That sale has also proved a boon for New Hope executives.

New Hope issued more than 60 million shares last financial year through the exercise of 45 ¢ options granted before it was spun off from Soul Pattinson and listed on the Australian Stock Exchange two years ago.

Most of these options, deep in the money at New Hope's closing price of $1.38 yesterday, were exercised by executives of the Indonesian operation. They left when that business was sold, Mr Millner said.

The Australian operations made a profit of $54.6 million for 2004-05, up from $21.9 million a year earlier.

New Hope's first expansion project is at its biggest mine, New Acland, near Ipswich, west of Brisbane. It has ordered processing equipment to support annual production of 3.7 million tonnes by 2007, from 2.6 million last year.

It plans to lift New Acland's output of thermal coal, used to generate
electricity, to 5 million tonnes by the end of the decade.

It is also drilling prospects in the Bowen Basin in central Queensland, which appear to contain coking coal, the most valuable form of the fuel, which is used by steelmakers.

"Early indications are quite promising," Mr Millner said. "We've got some exciting prospects."

These deposits include Phillips Creek, near BHP Billiton Mitsubishi Alliance's Saraji mine. New Hope has also been drilling at the Lenton project next to the Burton Downs coalmine, and has an exploration permit at Mackenzie, near Wesfarmers' Curragh coalmine.

It expected to start production from some of these deposits between 2009 and 2011, Mr Millner said.

The total development cost would be hundreds of millions of dollars, some of which would come from the Indonesian sale, supplemented by cash flow and borrowings, he said.

New Hope will pay 28.75 ¢ a share in dividends and capital return for 2004-05, giving a yield of 20.8 per cent at yesterday's close of $1.38, up 7 ¢.

It will pay a final dividend of 3 ¢ a share and a special dividend of 13 ¢.