oxr or pna what to buy now??, page-42

re: scd respondes to hotcopper posts on pna Rochy,

I will do a quick calc to show you why the gold price is not a huge impact for PNA.

PNA has 414 million shares on issue (exec options excluded)

They are talking of a capital cost of US$20 million for the gold project. Lets say they raise half of that in equity. US$10million = A$13.5 million in new shares. At $0.20 per share PNA will issue 67 million new shares. Therefore there will then be 481 million shares on issue.

If PNA have a final reserve of 400,000 oz and their cash cost is $US200/oz, then they will make US$80million. Take off the US$10 million capital they had to finance and you are left with US$70 million or A$95 million profit.

Divide by the total no of shares and you get a undiscounted project value per share of ....... $95million/$481million = 19.6 cents/share. This is probably equivelant to 15c/share or so after discounting, taxes, duties, corporate costs, etc, etc.

Doing the same calcs an extra $50/ounce increase in the gold price will have a value of 5.6 cents per share.

What thus shows is that PNA's gold project will add 5 cents per share value for every $50 increase in gold price. This is not very powerful leverage due to the high number of shares PNA has issued.

And dont forget PNA havent even completed a bankable feasibility on the project and the cash costs could change from what has been stated.

If you are following gold and want good exposure you will find much better calculations elsewhere.

I am sure SCD will get out his 38 and shoot away at this in his psychopathic manner........

One argument is that PNA already have $10 million in the bank. Well I can assure you that it will take most of these beans to do a bankable feasibility on the copper project, so they cant be counted.

acturtle