AGM, page-86

HS – in my post of 4 Nov, I asked you the following questions:

1. Do you agree with Autosime's conclusion that there will be a $12M surplus in year one based on 600,000 lbs production and a $57/lb average sale price?
2. Do you agree that total costs of production will be $37/lb - based on $30 all in sustaining costs and $7 'corporate and other' costs?
3. If you agree with 2, can you itemize what the $37 is made up of - in terms of opex, capex, all in costs, corporate governance and any other relevant costs?
4. If you do not agree with 2, what do you think the costs will be and how are they broken down?

(In repeating these questions here, I note Autosime’s correction that he suggested an average $12M surplus over the first 4 years).

I asked the questions for a reason – to steer the conversation to things that matter. But, of course, as has always been so typical of you, you simply ignored most of the questions and diverted to your usual rhetoric about your supposed superior knowledge.

You did respond that “I don't believe they will be cash flow positive for at least the first 2 years operation, there will be no surplus as the plan has always been and remains to pay off debt within the first 2 years operation”.
In other words, you have implied that there will be a substantial operational surplus – sufficient to retire debt in 2 or more years.

But to confirm and clarify that, could you please answer a modified Qu1 as follows: “Do you agree with Autosime's conclusion that there will be a $12M average surplus in the first 4 years (based on 600,000 lbs production and a $57/lb average sale price) and that this will enable PEN to retire debt in the first 2+ years?

I note that you did not even attempt to address questions 2 to 4. Why I wonder?

Well, the answer is quite abvious. Attempting to answer them would betray that you don’t know as much about the industry as you think you do. Not knowing, for example, the REAL costs of ISR start-ups (despite the ready availability of info from the web-sites of other U companies operating in Wyoming) and your confusion over the subtle, but real, differences between all in costs and all in sustaining costs. If you revisit and pay attention to what I wrote in my posts addressed to autosime, you may be able to see the incorrectness of your assumptions and conclusions. This, for example, from your last post on this matter: HS:

I have explained the absurdity of your double dipping of costs, especially wellfield development, exploration and evaluation all of which PEN has included under all in costs, along with OPEX, salaries and associated costs, royalties, indirect taxes and including funds held back for restoration etc and excluding corporate overheads. No double dipping HS! You need to learn the difference between ‘all in costs’ and ‘all in sustaining costs’ (and the grey definitional boundaries between them) and how these differences have been handled by producing U companies across the board and you may then understand that the ‘absurdity’ relates, in fact, to your comments.

HS: You have wrongly added development and exploration to the all in costs PEN has stated when they are already included. If you can't grasp that I suggest you stop posting on this topic as you are misleading those that aren't aware.

Again, you need to learn the difference between ‘all in costs’ and ‘all in sustaining costs’ and particularly the difference between ‘sustaining capital’ and ‘growth capital’. And to paraphrase you, “if you can't grasp those differences, I suggest you stop posting on this topic as you are misleading those that aren't aware”.

HS: You certainly would not get a guernsey on any development project I have been on, especially the current one with a CAPEX exceeding the Ross project by over 5 times.

As I’m neither an engineer or a project manager, that goes without saying. But I can read financial reports – which is all that is really required to make the points I did

HS: Yes this is my daily bread and butter so you could say I know a little about it.

Great – you should be able to answer my questions then. It’s the least you can do given the arrogant attack you made on my posts to autosime

HS: Better you stick to forte of published timelines, as you have demonstrated here you have no idea on this topic.

Yes, unlike you I got the timelines pretty much right but permitting is hardly my only interest. Besides HS, it wasn’t just the ‘published’ timelines I was interested in. I did everything I could to evaluate their veracity as well and concluded that the published timelines were the best possible result if everything went right. PS – looking forward to your answers to those questions HS. If not for me, at least for Gav, as it seems he needs some clarification on this matter.