Geo Energy Resources is expecting its “highest quarterly results ever” for 4Q2021, riding on strong coal prices as well as a total sales target of up to 3.5 million tonnes.
The company had achieved sales volume of over 2.3 million tonnes and a revenue of around US$200 million from October and November 2021. It targets a sales volume of 1 million to 1.2 million tonnes for December 2021, Geo Energy’s CEO and executive director Tung Kum Hon said in a statement.
“Although coal prices decreased to US$70.58 per tonne as at Dec 6 from a high of US$154.61 per tonne as at Oct 22 following China’s intervention policies, coal prices have since stabilised.
“The extreme cold this winter has driven demand and depleted supplies despite rising domestic coal production. Price are still expected to remain high for the rest of 2021 and into 2022 based on the futures market,” Tung added.
The Indonesian Coal Index price for 4,200 GAR coal (ICI4) averaged US$132.64 per tonne and US$79.34 per tonne for October and November 2021 respectively, compared to the average ICI4 of US$55.95 per tonne for 9M2021.
Coal prices are expected to remain strong in December, with ICI4 of US$70.58 per tonne as at Dec 6, the company said.
Meanwhile, an independent qualified person's report (IQPR) issued by the independent JORC Consultant on Dec 3 found that Geo Energy’s operating coal assets – PT Sungai Danau Jaya (SDJ) and PT Tanah Bumbu Resources (TBR) have combined coal resources of 101 million tonnes as well as combined proved and probable coal reserves of 77.3 million tonnes as at Aug 31.
In accordance with the Valuation of Mineral Assets code, the IQPR also reported an estimated combined valuation of US$726 million for SDJ and TBR.
"The above estimated valuation of our SDJ and TBR coal mines and the performance of the group to date has shown that our shares are undervalued,” said Tung.
Geo Energy closed 1 cent or 3.22% higher at 31 cents as at Dec 8.
