Jogger, you need to add another 700m unlisted options, these...

Jogger, you need to add another 700m unlisted options, these will be given to unlisted optionholders if (when) they convert the current oppies into shares. Whereas the current unlisted options are exercisable at 1 cent (raising $7m), the piggy-back options have a conversion price of 1.5c, so will raise another $10.5m.

That is why there will be about 3b shares on issue within 18 months and $25m (I haven't include the 4c oppies) in the kitty. It the share price was to remain as it is now PDY will have a market cap of about $70m and $25m in the bank. Obviously the sp should respond to encouraging drill results and PDY will have more than enough cash to fund their 70% of the project. The key is to drill targets asap to ensure as much of the money is used for exploration and supporting activities rather than administration costs which has been the biggest expenditure outlay at GPN/PDY previously.

In yesterday's post I compared GWR and PDY. As an aside, GWR identified hematite in late 2005 and have 141mt now. PDY identified hematite in 2009 so are over 3 years behind. They could speed up the process by bringing some of the ore into either measured or indicated definition in the most prospective area first and get a bfs underway in short time. If the project is feasible an offtake agreement should be possible, then continue drilling to expand the resource and look at Mt Padbury and other areas of interest simutaneously.

The Oakagee Port is probably still 4 years away and even then MMX and Gindalbie are likely to take up the full initial 35mtpa capacity. GWR are able to truck ore to the Esperance Port if they are closed out from Oakajee in stage 1 of development, though whether PDY will ever get a berth is uncertain. You may find the company chooses to sell the project to another exporter. MMX would probably hold the key as they have 50% of the Oakajee Port and rail project and Jack Hills is not too far away to truck ore to.

So what would 100mt of hematite be worth? UMC got $1.20 per tonne for their Railway resource, though that was above average due to their proximity to BHP's railway. Depending on the ore prices at the time $1pt royalty is possible, so $100m for Telecom Hill, if there is 100mt dso.

That's about 3.5cps fully diluted and still leaves plenty of upside at Mt Padbury and maybe 5bt of magnetite. More importantly, PDY management will have proved they have the ability to take the company forward and erase the sins of the past. This in itself, though intangible is invaluable.

Telecom Hill will obviously be worth much more if developed by the company but shipping the ore is going to be a big ask.

The cost to shareholders has been more than just the dilution, time itself will have a huge effect. Look at Midwest, bought out for a high price by being one of the first to rock n roll. Those 2 years of wasted time by previous management who worked against shareholders has set AGU/PDY back and only strong management now will get them over the line.

Things are looking quite positive, though as history has shown here before, self-serving Directors can kill off potential at any time. Long suffering shareholders here deserve quality management and only time will tell if they have it now. Some good signs lately, though I will reserve my judgement atm. I look forward to the day I can post here commending the boards of PDY & AGU for a job well done.