Questionable, page-32

Hi Tanon
I can't value PDN accurately enough for my liking I'm afraid - and I wouldn't even suspect I would have the skill to do so well. So I am taking my cue from about five things that caught my attention, and just my general reading of the financials. A huge portion of the value is option value I suspect.
1. The current inst holders have stayed away from the cap raise in record numbers - I have no CR scenario that comes close. If it was a bargain - they would be jumping in to the inst offer, I would have thought. Underwriting will be interesting with a full indemnity to the underwriter. So is it fully sub underwritten?
2. Many have longed this based on two fallacious views - 1. that japan is restarting most of their reactors - they are most likely to only re-start one third (and does Japan matter so much anyway?) and 2. That the spot price of U3O8 is meaningful, when it is currently not, but it is quoted everywhere as if it matters by spruikers. This nonsense spot price is being gamed IMO. Good to short on a spike derived from these two views being propagated.
3. Paladin stated that they would have enough funds til at least June 2016, but with lots of assumptions. That does not sound very long to me, and they will need a margin of safety - accounts cannot zero out.
4. They will have to fund the $200m worth of prepayment over 6 years from 2019. With reasonable assumptions for NPV at the time, with a ten year average prepay period, PDN will be possibly losing total guess ~$45m pa of their op cashflow at that time for six years. Also seems a risk that Michelin may not be enough security nowadays? This will be more of a focus in mid 2016 I would expect. Will anybody want to lend in the lead-up to this period?
5. I have concerns that some statements were "interesting", as I have already written about. There could be blowback from that. It seems to suggest desperation too.

Against my trade - Hopu are buying in - with OPM however it seems. Do they know more than all the analysts over the last five years? Eventually the U3O8 market will come good. The market is not good at predicting these things though.

I've seen many valuations of Paladin - I guess they are as meaningful as anything - but none have been accurate for a long time. So I'll be playing it as I see it. I strongly suspect it will go underwater after the retail offer period - no idea how far under.

My opinion only. Nobody can predict the future perfectly.