Highly geared to Pt and Pd prices, so watch out for EU crisis.
Big $20m or 4c ps cash buffer means they can weather storm.
Will probably lose $2m this quarter but if Smokey passes break-even as forecast, it should be a nice cash generator from next quarter on even at half the margin forecast. $200x60k oz PLA share = $12m pa. In bear market value at 1/2 cash flow =$6m or in better times 5x double the margin = $60m
Hard to know what value to put on other two development projects. PLA share is 6m oz of 4E resource. In deep bear market might be $2/oz or $12m. In bullish times might worth be $50/oz or $300m.
I put a super-bear value of $38m or 7.6c ps and a bull valuation of $380m or 76c ps.
In this market, PLA could of course trade below super bear level. However, floor there with cash backing and as screaming takeover target anywhere below 10-15c.
Trading in this stock recently been dominated by two big positives: - Smokey turnaround news - cashing out of Panton vs. - EU worries and downswing in Pt and Pd prices
PLA Price at posting:
7.8¢ Sentiment: None Disclosure: Held
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