disgraceful, page-35

Mich ,Coeur d alene , pre bought the silver from PEM in around 2005 from memory ,in much the same way as the deal from CBHs Endeavour mine ,in Cobar .Coeur didnt get their hands on the silver for the Rasp mine as yet, and cant see CBH giving that away .
Perilya looks to be in a lot of trouble and apart from CBH savings by not having to build the mill there is little else attractive about PEM.The hedging is not very attractive for any potential merger ,the silver is sold ,and the mine is high cost .Why would CBH want to take on loss making operation just as their operations have turned the corner ?
I could not believe the large hedging position (out to 2009) , at low prices when I saw it . If there is any major production problems ,and PEM need to buy lead or zinc at high prices to cover the hedging, some of that cash in the bank could disappear ,as losses . They have a lot of cash ,but this has a dark cloud of risk attached . They have way too much hedging . Disclaimer :I am not an expert on hedging so dont take my word for this ,it is my personal understanding of how it works , and my view is shaped by this understanding .I am quie happy to be corrected by someone with more knowledge in this area .
CBH hedge a maximum of 25% .To do more is very risky ,and has sent companies broke before .
Unfortunately PEM's mine is now very high cost ,and the prices they hedged at are vey low ,they have already sold the silver ,so no attraction here for CBH .
With PEM share price at $1.30 ,why would CBH shareholders want to do a deal that effectively gives them a 3c premium to merge into a risk profile such as PEMs ,assuming a 3for 1 deal .
There will need to be a premium to get Toho to agree ,and personally I think 2.5 for 1 ,would be the absolute best PEM could hope for now .Unless CBH get this really cheap to deal with the mess ,they will be left holding a very marginal operation and the market stigma just wouldn not be worth it .The market doesnt like high cost operations ,as the risk of huge losses is very real if the metal prices drop below the operating cost .
I am not an expert on PEM , so happy to be corrected on any facts ,but have a good understanding of CBH operations and potential .