gold over $2000, page-27

Come on Johno. That's a pretty poor comparison. PGI significant sovereign risk as pointed out. I thought after CVR you would be starting to understand that owning a project in the developing world out of Australia is not safe.

And what do you mean don't know if the $37m is drawn at PGI? You think they would be doing this little emergency cap raising after supposedly starting production if they had bank debt available? The $37m is drawn. Plus $5m other loans. Plus $2.5m shareholders loans. There is also deferred consideration due Jan next yr of $4.5m and a $7.5m gold royalty sold to Macquarie. More importantly PGI have hedged 30% of their production at $1321. They don't talk about that a lot, funnily enough! Mark to market and without discounting that hedge has negative value of $50m right now. Plus of course, they will raise a further, say $10m, to complete the project after overruns. So to get to a proper enterprise value if you want to do a comp, you need to add $116.5m to PGI's market cap for enterprise value $221.5m

The other problem with PGI of course is that the 6 yr mine life is pretty much it. The tailings bank is finite. With MOY, its highly likely that the mine life is extended over the next 12 months or so as they return to spending on exploration. That has been somewhat neglected as they have ramped up production (On time and to plan, another contrast!). Moy are saying that over two years the resource will rise 50% and reserves 35%.

Production upside is likely in the short term with MOY as well, with $10m spend to hit 90,000 oz early next year and 100,000oz by end of next year. (final plans pending) So far they have done everything they have said they would so I'm not discounting that too much.

In terms of cash, they are down to $5m sure but ramped up to full production! So working capital spent and generating revenue around $10m a month from this month onward. No need for option funding as some people seem to suggest.

I'm not an expert on PGI so correct so correct me if I'm wrong about any part of that one. I just know a bit about it because I considered it recently myself and decided not to invest. Its ostensibly cheap but adjustments are necessary.

bbb