cash analysis

Sales revenue of 1.92 Mlb * $55.2 / lb = $106.1 million (note that this ignores the EdF forward purchase payment).

Cost of sales $86.7 million.

Ignoring impairments but taking into account exploration and admin costs, operating profit before interest and tax was $8.4 million.

Finance costs were $16 million, which pushed PDN into a $7.6 million cash negative quarter.

However, interest costs in future quarters should be about $2.5 and $3.0 million less now that $134 million outstanding convertible bonds were paid off and $15.7 million of project financing facilities were paid off.

With more cost cutting and ignoring non-cash impairments (and other things remaining equal like uranium pricing) I predict PDN will just barely have cash negative quarters from now on. And with cash and cash equivalents of $112.9 million, this means that they can tread water for quite some time yet.

There are no upcoming debt maturities (now that the EdF money was used to pay off the convertible bonds and some project financing) so whilst PDN treads water we will see uranium pricing increase for so many fundamental reasons discussed in other threads on HotCopper and this will push PDN into profitability. Hopefully we'll see this happen before the end of December.

And, of course, there are the pending "strategic initiatives to reduce debt and strengthen the balance sheet" that should be announced before the end of June. This seems to involve a "sales process" and a reference to "utilise current platform for future growth leverage with the assistance of a strategic partner". I await eagerly for news on this front.

My take is that PDN is doing well in a sector that is still overshadowed by negative sentiment post-Fukushima. It has hit its bottom and it is now a matter of time for the sector to rebound (which will affect PDN's share price accordingly).