they call me evil knievel - no schist!, page-3

GPASAS,

I haven't heard of Evil Knievel for some time now. He was a hero for a while but I wouldn't recommend him as a role model for Mums and Dads managing their retirement nest eggs.
There is a place for high risk, high reward companies in the portfolio of some people. In my view PSH only meets half of that description.
I have outlined how in my view PSH has serious nearterm risks. I don't see the potential reward.

Before you don the Lycra suit and fire up the rocket powered bike let me respond with my opinion to a couple of your points;

1)Net Tangible Assets are irrelevant. They include a whole lot of 'overburden' as stock. I doubt you would want this schiest distributed in specie.
You say it hasn't lost the cash it raised. I wonder how much working capital it has left. I understand it is cash flow negative, it burns cash, I don't know where its going to get the next lot from.
You say its gearing is at a low level. If you compare its debt to its caket cap it is looking sick. This is the ratio that matters as it reflects its debt to its ability to raise equity.

2)Remember PSH production costs are in Australian dollars. The market price of Soda Ash is international and expressed in USD. The rising value of the AUD means PSH gets less AUD for its product sold. On such a thin margin business this is critical.

3)Reported profit is hypothetical accountant talk. Cash flow is real, dividends are real.PSH isn't paying dividends.

4)If the selling was due to one or two significant shareholders I would have expected an announcement. Management haven't convinced a new insto onto the register as a significant shareholder at these prices, I imagine they are trying.

5) I am not impressed by the contract renewals. Soda Ash is a commodity. Its just a matter of cutting price to keep contracts.

6)I think the limestone quarry's product is a quality limestone for the chemical market. I think it only supplies this inhouse. If and when Soda Ash production stops I expect the Quarry will be uneconomic. It is deep and has been in production for about 70 years.

7)If the Chairman paid 52c for shares now worth 29c I wouldn't be following his judgement. I wonder if the directors will buy more this week?

8) I think Windimurra is not a major issue. PSH sells all its product at internationally related prices.

I expect PSH to fall through the 20s quite quickly. If I had shares I would sell. If I wanted to buy into PSH I would wait till their price is in single digits or await a sale of distressed debt.

GPASAS, this is a canyon too wide.

Regards
Bacci