G'day Stu and other frustrated holders.I've been reading the PMI...

G'day Stu and other frustrated holders.

I've been reading the PMI threads and can relate to your disappointment and fretting about the declining sp and seemingly lack of progress in obtaining funding, EPA approval and how the Dynamite Hill discovery may impact the project.

I'm in the same boat but can assure you that the new CEO Peter Bradford is currently examining financing alternatives and the Board is aware of the declining sp and the interests of shareholders.

In this regard, I don't believe they want to dilute the company further by a CR...read into that what you will. My view is they would prefer a further debt facility.

The discovery of DH has in a positive way complicated things because it could even mean (just imho) a new BFS has to be prepared as the cash flow on start-up would alter if shallow, high grade oxide ore was to be milled first.

Just say for example that DH contained ~50,000 oz of gold at around 3g/t (me just guessing here) and the plant could start operating at the rate of only 100,000 oz pa and not the forecast 220,000 oz. Even at that rate of production with a cash cost of $700/0z with a POG around $1300, that would equate to a $600/oz profit after 6 months or 50,000 times $600 = $30M.

Now, $30M minus a marginal amount for shallow pre-stripping at DH would go a long way to defraying the $80M required to get at the main Nkran orebody and have a significant effect on the economics of the project start-up. What I'm trying to say is that all of this takes time to calculate and negotiate with the bankers and isn't an overnight job. As we know, "the market" does not like delays and this has helped (?) suppress the sp along with volatility in world markets and the declining POG. GRY, AMX and PIR to a lesser extent have had the same fall from grace even though they have gold deposits. These delays coupled with a lack of news flow lately discourage sh and cause some to get despondent and lose patience and bail out when they should be holding or accumulating. (Just my opinion. In no way is this meant to be investment advice...I'll most likely get egg on my face!) The co. has however seen the need to conserve cash and advised the market of cost cutting measures they have put in place. Hopefully, we'll get some updates before year's end...we'd better!!

As far as financing of the project is concerned, it's interesting to me that funding options are always mentioned in the plural which makes me think there actually are offers on the table from banks to get this baby up and running. Just a matter of the Board deciding which one to go with hey? lol.

That was tongue in cheek but I've done a bit of research on the IRR (Internal Rates of Return) of the project (pre DH discovery) and as at Nov 2012, the IRR at $1300/oz was 35% (pre-tax) and 28% (post-tax) increasing to 54% (pre-tax) and 43% (post-tax) at $1600/oz which are exceptional numbers. Debt finance would be paid back in 2.9 and 2 years respectively. What bank wouldn't want those terms with PMI's inferred resource already standing at ~4.5M oz @ ~2.2g/t with potentially huge upside to that with further drilling programs?

As noted that's before the Dynamite Hill discovery and who knows, that could be the icing on the cake as it's open along strike and down dip with a parallel system 300m away.

I'm of the view that Obotan isn't going to "fall over" and just maybe "the market" hasn't got it quite right in this case

Hope this has been a bit of encouragement for disgruntled shareholders and I might add that I'm not spruiking the stock, just stating some facts that may have been lost in the background noise and a bit of extra information I've found through research.

As I said, this post is in no way meant to be construed as investment advice and everyone should always do their own research.

Cheers and GL to all holders...