Interesting Found on Goog Finance 4-Jul-08 01:54 am Oil is nearing the end of its life, and coal has never been in higher
demand. With oil prices topping an incredible $140 dollars per
barrel, the search for alternative fuels has been ever-increasing.
Analysts at major companies like Goldman Sachs and Morgan Stanley, are
predicting oil to be at $200 per barrel by the end of this year.
(2008). Lets do some math now. Its 2008 now and its been
145 years since the birth of oil industry. That means it began at
around 1863. If the peak was at 1970 that means we have only about 69
years until oil reserves are completely eradicated. I came up with
that number when I subtracted 1863 from 1970 and got 107. So that
means it took the oil reserves to peak in 107 years, and by that it
means it will take another 107 years to deplete. 38 years have
already gone by since 1970, you do the rest of the math. Well,
actually I already stated how long oil reserves will be around until
its gone, 69. This is considering all current market conditions but
as we know in recent year and especially since 1970, we have been
consuming oil at an alarming rate. That number could easily be cut by
1/3 or even a ½. That is in our lifetime people.
This is where coal and Quest Minerals and Mining comes in. Coal
demand is rapidly increasing and will keep increasing for at least the
next five to ten years. Quest Minerals and Mining stated in an
article dated April 5, 2007, “Tests on the Lower Cedar Grove, which
Quest seeks to reopen once it has reopened the Pond Creek mine, ran
13,476 BTUs. Eugene Chiaramonte, Jr., President of Quest, said, "This
seam is known as a metallurgical 'hamburger helper.' While the coke
button is somewhat low, we believe that the high BTU and very good
fluidity should permit shippers to blend this into high price orders
to the international met market." International markets is exactly
where this company is heading once production starts. China will be a
major catalyst, China have been importing from us for about two
years or so. Now, many people would ask, “why would China go to Quest
Minerals and Mining to get coal instead of major companies like
Peabody Energy, or Massey Energy. Well, the Chinese population is a
smart population, that is why they have double digit GDP growth and
that is why the U.S. is less than 3%. The reason is that major
companies require major dollars. So, why not get a bargain for the
same coal they would get with one of those major companies.
This is the reason why QMNM will prosper in the next two to three
years. If not less. Considering the recent exceptionally good
quarterly report, QMNM has a lot of room to grow. QMNM is one of the
most highly leveraged companies in the Coal industry and has a Debt to
Total Capital ratio of 1,898.40%. Additionally, the percentage of debt
used in its capital structure grew this year. Mind you, the Debt to
Total Capital ratio for the Industry is 49.38%. QMNM grew earnings in
the face of decreased revenues over the past twelve months. This is a
trend that is not sustainable if profits are to continue to grow at
this rate. However, this result was better than that of the average
company in the Coal industry where earnings fell over the period.
Taking all of these factors together, it is somewhat possible to make
predictions. I do not believe the share price will reach over $100 per
share as it was back in 2004, but I do believe it could easily reach
$1.00 by the end of this year. If $1.00 is reached, QMNM could easily
see $5.00 a share. In my eyes, Quest Minerals and Mining will be very
successful when production starts and then with that it is a domino
effect. With production comes new contracts. With new contracts comes
more revenue. With more revenue comes shareholder profit.
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