Without this turning into the longest debate in history, I'll try and make this short...
1. I think you will find Pasminco had its fair share of problems, including debt. Metal prices was a major factor.
PEM will most likely write down some assets (most companies seem to be doing this lately in this environment), but I doubt NTA will come under $1. Current 45c is a huge discount... I stand by my belief around NTA, cash and hedges.
2. Your model first spat out a $40M loss... now a $20M loss. Neither model takes into account sales from Beltana, or the fact mining costs have already been paid. It also doesn't take into account the addional costs of the accident on 2007 production, or the additional ore from the new open pit mines put through the spare capicity of the concentrator.
You seem to be of the belief that Beltana is a long term loss making exercise. I'll ask one question.... if an open pit 32% Zinc DSO resource can't been profitable, what Zinc miner can be? Certainly not CBH with their deep underground resource (with all their additional Conrete backfilling).
5. I think the market has more belief in PEM than CBH, PEM is currently trading at more than the 3.5 CBH offer (currently more than a 4 to 1 ratio)... but I am happy to sit back and compare notes in the future... I'm happy to have the bet on PEM and not CBH...
6/7/10/11. Even by your calculations, how does a $20M annual loss eat away your $42M in a few months.... by your maths, it takes at least 2 years...
If they were that worried, they would cash in their hedges, put the mine on care and maintenance, get back their $25M bond and sit back with a market cap of $100M, $180M in cash and a proven up copper resource. And I would still be a buyer...
12. If they have $80M in hedges they could sell, why are they a distressed Seller? I think your will find that with ABY and Xstrata running out of ore, they are distressed buyers, and both will be fighting for it.
I am in no doubt that ALL zinc and lead miners are struggling with the current metal prices. You only have to read the news and see the latest rounds of profit results (which are mostly losses) across the globe. Sort of explains the 92% drop in PEM's share price... lol...
I am of the belief that PEM is in a better position than most to ride out the storm. Better than CBH in fact (which appears to be your weapon of choice). PEM have the ability to ride out the storm if required by going into care and maintenance, CBH do not have this luxury... (neither did Pasminco).
You don't have to agree with me, your choice, but I have put my money where my mouth is..... time will prove who is right.
PEM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
