ECC Capital Corporation Investment

Note: I wrote this for myself. This isn’t investment advice, just my notes. Updated 02/20/2025.

These guys used to do residential mortgages, but were basically shot by the GFC. In 2024, they issued 84MM new shares (now 190MM total out) to PhenixFN for $0.05/ea.

From Phenix, they acquired the Kemming Mines in Wyoming. This is an open pit mine that produces coal. They also have $21MM left on their outstanding seller side financing for the mine (from Phenix).

§Current buyers of the energy:

• Local power plant is converting from coal to natural gas by 2026 (Pacificorp)
• A cosmetics plant is being built1
• Ammonia plant is being built, 1.8MM tons/year2
• A highway is being built as well3, but this will take three years

§Financials:

• Mined 2.5MM tonnes last year4
• Sold these at a price of $50/unit5
• So $250MM annual revenues
• Call it 10-20% margins
• $25-50MM in profits
• At $0.07/share, we are talking $13MM market cap
• A 2019 bankruptcy bid valued the mine at $215MM
• There may be pension liabilities left, as there were some in 2011, but that is unclear right now.

§Notes

1. Utah company wants to make cosmetics from Wyoming coal
2. Kemmerer could become home to $2.5 billion coal-to-ammonia plant
3. Moving US 30 west to access coal reserves would cost $30 million
4. Production data
5. EIA coal price data

§Update: April 2026

They reported and it was ok. The mine continued to decline and did a little bit better than what I was expecting. They are continuing to let people go. Selling at $0.13/share. Good outcome. There could be more here given the shell, but happy where this is at.