The Edge S'pore adds GOLDEN ENERGY & RESOURCES to its market portfolio

Global coal prices have surged since June 2016, and miners have turned profitable. 2017 will see massive profits returning, if coal prices stay where they are. Photo: Company The Edge Singapore, in its current Feb 20-26 weekly edition, has added Golden Energy & Resources (GEAR) to its Singapore market portfolio (see table).

"We think it will benefit from higher coal prices. GEAR is planning to ramp  up its coal production by 40% to hit 14 million tonnes this year," according to the article.

GEAR has a break-even cost of production of US$21 a tonne. 

Assuming it can sell its coal at US$40+ per tonne, it would reap a gross profit of roughly US$280 million if it produces its target of 14 million tonnes of coal this year.

KGI Securities' forecast: US$95.8 million in net profit this year.

On that number, GEAR's price-earnings ratio is less than 10, considering its market cap of about S$1.25 billion based on a stock price of 53 cents.

For The Edge's write-up on its portfolio matters, go buy a copy at newsstands for S$5. 

See also: GOLDEN ENERGY & RESOURCES: 3 things to focus on