Alan Kohler Interview with CEO of PGC today, page-8

Firsova - I really don't know what Mark S has to do to get the share fairly valued but I also think that when it turns it will be a big one. The reality ( this is not my take but that of a person I respect) is that there is little appetite under $100 million market cap ( maybe our mutual friend can comment) and that only the smaller funds are interested there - the problem is the size differential in the ASX. The big whales are huge and the minnows have had a bad record as many are born in speculative areas like exploration. The fact that around 30% of the ASX in number of companies are at risk of failure says it all. I have no evidence but I would surprised if many stock markets have the same risk profile. Personally , having avoided any of mine going into administration , I know how hard it is to fight the greed factor when you see these huge plunges and try to convince yourself that value is there - before you have even analysed the company. Many of those I know have bought on rumour and sold when everyone was at the exit.

So if the market doesn't see institutional investors in real numbers below $100 million who is funding them ? Thats an easy answer in most cases a combination of management , a couple of cornerstone investors and retail investors. His view is that there is a greater disconnect here than in the USA. The valuations on the whales is high and on the small or micro caps appallingly low. The range changes as the appetite for risk changes.

Right now volatility and risk are riding the prices. So really it isn't inconceivable that prices will drop - maybe even to 25c again. Then one day someone will look at the company either a predator or just a slightly larger almost institution and the process will change from excess stock to no stock.available and the price will start driving upwards.

My view is that the company has over $6 million in available borrowing and it is probably generating around $300K per month in cash flow.so over the next 10 months it could , after dividends , have added another $2million to cash - that is a purchase price of $8 million assuming it can be purchased at 6 PE thats $1.3m and using the 15% that would mean turnover around $9 to $10 million. Essentially to do a large deal they would have to raise at least $8 to $10 million - that adds another 30 million shares and takes us to around 100 million.

I am not sure that would get you to the $1.00 so I think that you have to wait until the share price is 50c to do a deal that requires another share issue. thats at least 6 months away. So unlike Caketin I am less concerned about a cap raising now. I think its in the plan but I think that MS has enough on the line to not want a huge dilution at bargain prices - unless the purchase price is cheap. I think he will have to go out there and start marketing the company - so maybe is a few roadshows or maybe a company presentation at one of the small cap shows.

Right now I don't see much happening until after the interim and really for all of us to travel on as believers it has to be a good one - otherwise we will start having a few that sell.

I would welcome a bit of putting the stuff to bed before the next report. I am not a seller so I am happy to hang in there earn a reasonable - if not flash return and await delivery of a good set of numbers and then lets see where the market goes.