America West Resources (AWSR) hits a problem
Ian Gilson, CFA
One of the coal seams at the Horizon Mine has a fault in that, at some time in the past, the coal seam has moved. This is not an unusual rock structure. Some exploratory drilling should find the seam. However, the miners will have to mine rock until they can open another seam. The company has stated that it may take at least 6 months to develop another section. In the mean time the company has laid off a third of the work force until mining can restart. That section is about half of the available production.
We are dropping our recommendation from Outperform to Neutral and reducing our estimates to reflect the lack of production. We will update our report as soon as possible with the new recommendation and estimates.
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