Ann: PEN Investor Update - May 2012 , page-19

Written last night but HC was down for maintenance by the time I was finished.
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I found today's Investor Update quite surprising and expected to see more discussion about it. Significant adjustments have been made to expectations and timelines look a lot more realistic now. Finally we've moved on from the fantasy of 2012 production and now even early 2013 has been removed from possiility with late 2013 now the current estimate for production. I can't say I'm exactly happy to find that management are now resigned to production this much later than they were forecasting just months ago but I'm hoping that this signals the turning over of a new leaf in the way they approach communications to shareholders. the last of the mission statement point "Maintain safety, integrity and quality throughout all activities" gives me the impression that this has been thought about and an effort is being made to be more circumspect in broadcasting objectives and timelines. If this proves to be the case and they make a reasonable fist of achieving these more realistic timeframes than I'll be a much happier holder.

My points of note were;

1. Most of the June deadlines have now been movcd to 2nd half of 2012. These include upgraded resource at Lance, Permit to Mine and the big one IMHO project funding.

2. The above means that we're pretty much done with the expected announcements prior to the expiration of PENOAs. There's the possibility of left field announcements of course but given the state of the markets I'd be almost dumbfounded to see some kind of take-over or serious acquisition come about in the next few months. I hope that the price can stay sufficiently high to encourage a full conversion of these options as we really do need the money to continue to fund admin and drilling and this isn't a great time to be going cap in hand to the market.

3. An initial Karoo JORC resource is also now a late 2012 rather than a June goal.

4. There's either a mistake or some confusing information (or management still playing games) in the NRC license timeline. Slide 7 has the NRC granting the SML in the first half of 2013 whereas Slide 12 has the NRC granting the permit in H2C13. The latter would be result in 2014 production not 2013 so my guess is it's just a slip (Freudian ?) but it may give us thee most realisitic forecast yet of production by management. (We won't mention the misspelling of Karoo in the heading topping page 26 but it does leave room for the assertion that the slides weren't checked particularly well and that the later SML date was just a typo).

I've tried to be philosophical about the changes in the time line. In truth most of them I'd come to expect anyway but I still feel a little disappointed that it has taken so long for management to come clean about the real dates. I'm not particularly clever but I've known (courtesy of some excellent research and reasoning by Vintage, Agent, Reichman and others on top of my own) that the production target of 2012 or early 2013 was purely fiction since the start of this year so you have to conclude either management haven't being playing straight or that groups of posters on HC have a better understanding of the permitting process than they do. Neither one is particularly palatable. As for HS, Purd, etc I cannot really understand their motives for backing the word of management on timing when it was so obviously not true. At any rate they have been proven wrong despite their loud and continuous protestations and accusations of down ramping and nefarious purposes leveled at the rest of us who questioned management.

Anyway my sincere hope is that this Investor Presentation signals PEN management making a clean breast of things and a concerted effort on their part to continue on towards production with credible timelines and a concerted effort to execute the milestones accordingly. If so they will have my full support. If not then all we've been given today is another kick in the guts. I very much hope it's the former.