update on pen coming, page-12

” Not much other than the progress for declines (length) and couple of minor sub activities within the project.”

I disagree with that somewhat Newborn. Maybe it’s just me but I took the announcement to mean a possible delay in getting Pen up, even based on May’s improved advancement rates.

I may have this wrong but previously I was expecting sales to commence in September and now sales “are forecast to commence in early Q4 2012”. Whilst a reasonable person might assume early Q4 to mean October they missed an opportunity to say so today.

Also the update on the decline developments are as of the end of May, yet we’re almost at the end of June, so I thought it may have been a bit more current.

Given both declines need to reach 390m, as at end of May the conveyor road was 126m and the travelling road 107m, so it sounds a fair way still to go.

April saw joint advancement of 58m and May 98m, so it would seem like the problems encountered with the soft floor in April have been properly addressed which is good.

They are roughly 1/3 of the way through the declines and if they continue to advance each decline at approx. 50m per month (using the May progress rates) then they are still 4 months away from completion – possibly late October, unless the contractors can improve on the May advancement rates.

I know some posts awhile ago stated that coal could be mined prior to the completion of the twin declines, but I don’t think I’ve seen the company state that anywhere to date. Happy to be proven wrong if there is something stated. However, the announcement today says sales are forecast to commence in early Q4 2012 which sort of implies that nothing much will be mined until completion of the declines.

Also the May 16th release spoke of FCF of US$23m, whereas today they stated FCF of US$15-20m and that figure benefits from the hedging program and also remember forecast costs are still based on May 2011 estimates. Thankfully they have the hedging program. I also prefer Abu’s definition of FCF.

Just mho, but I’m factoring in delays to production and obviously it will take awhile to ramp up to full production, so I’m not expecting much in the way of sales this Calendar year.