Saturday, January 11, 2014

Seeking Alpha: New World Resources Fighting Hard To Keep A Recovery In Play

It doesn't matter if you look at U.S.-only miners like Arch Coal (ACI) or James River (JRCC), international miners like Rio Tinto (RIO) and Peabody (BTU), or European miners like Mechel (MTL) and New World Resources (OTC:NWFFF) (NWR.L), there is a whole lot of pain in the sector as companies struggle with low prices and particularly in the met coal world.

The largest miner in the Czech Republic and one of the largest in Europe, New World is scrambling to cut costs and rationalize production in order to stem losses and cash burn in the midst of difficult pricing. I believe the company's moves will keep them in the game for at least a little while longer, but it's going to take met coal prices above $160 per tonne for New World to make it. With that, New World is not a particularly interesting idea if you buy the current sell-side expectations for met coal prices during 2014-2018, but should met coal prices go another run to $180 or higher, these shares will likely do very well.

While these shares technically have a U.S. ticker , that is for all intents and purposes a dead listing. The best practical way these shares is to own those traded on the LSE (the NWR.L), though shares do trade in Prague and Warsaw as well.

Read more here:
New World Resources Fighting Hard To Keep A Recovery In Play

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