CanAm Coal: Record Year Of Coal Production In Alabama

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CanAm Coal (COE.V or COECF) believes in the long term viability of coal as a fuel source and that demand will grow going forward. CanAm Coal had a record year in 2012 producing over 455,000 tons of coal in mining friendly Alabama. This is almost a ten fold increase from 2010 demonstrating significant production growth. Over the next three years CanAm's goal is to possibly produce 2-3 million tons of coal. The company is developing three new mines and has attracted a significant financial institution to fund the operations. The company is well positioned for 2013 after investing a significant amount into opening up three new mines in 2012.  CanAm is a surface miner which does not have as many risks as underground mining. CanAm is the recipient of the "Sentinels of Safety" Award commending safe and reliable operations.  CanAm has focussed on building reserves and producing the higher quality cleaner coals, lower in sulphur, ash, mercury and arsenic. New EPA regulations could drive demand and premium pricing for CanAm's cleaner coals. The company already has 85-100% of 2013 production sold out and close to 650-750k tons for 2014. This provides investors with highly probable cash flow and earnings stability. The company could eventually generate a significant amount of free cash flow to make further accretive acquisitions.  CanAm's quality coals are already sold out for 2013 as they meet the new EPA standards. The company is deeply discounted with a market cap that is less than one times EBITDA and trading near a three year low. Most of their peers trade three or four times that value and CanAm is considerably undervalued in the sector. The mines are run by 30 year industry veterans that has put their own money on the table. Management owns just over 25%. 
 
Disclosure: Author and Interviewer Owns CamAm Coal and the company is a sponsor on my website.

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