From talking to some friends that I have working at the Penrice Osborne site, no tests have been carried out at the plant using imported dense ash to make bi-carb., so who knows if their new system will work correctly. The costs and time constraints to end soda ash by June 2012 probably couldn't be met (ie: $8mil. not enough to upgrade the existing plant to take the new way of making bi-carb. and there probably isn't enough time to install all of the required equipment considering that Penrice won't be getting any money from SASS until all due diligence reports are completed by May). That Penrice are saying that the new selective salts recovery has made its first profit is, to put it mildly, a bit misleading as, I am told, that Penrice has received some money for running trials at a pilot plant that was built at their Osborne site (but, with little monetary input by Penrice) and that at the end of the trials this plant was "gifted" to them by their partners in the trials and that Penrice has added about $10mil. to their books as "profit". As for the Dense Soda Ash being 40% more expensive than imported ash is, again, a little bit misleading. If you have read Penrice’s' previous market updates they renegotiated Soda Ash contract prices about this time last year, to cover the increase in the $Aus. plus other expenses also they have just recently announced a new exclusive supply contract with Vale Nouvelle Caledonie SAS. All of the above is rather curious when taken together with the E.G.M. to vote on board positions later this month.
PSH Price at posting:
13.0¢ Sentiment: None Disclosure: Not Held
