A few notes from the Quarterly;The process plant commenced...

A few notes from the Quarterly;

The process plant commenced operation at he start of June and ramp up to 12 Mtpa was not achieved until late July.

Operations for the first 2 years are focusing on processing the near-surface low grade ore. Higher recoveries will occur from the primary ore deposits. Gradual improvement in grade and recoveries is expected through 2009.

Heap leach gold operation was in wet season care and maintenance mode during the quarter and is due to recommence production in Oct. This should contribute to the Dec quarter.


So simply taking the results in the Sept quarterly and doing a back of a fag packet calculation of steady state operation costs can be misleading. Now that the existing processing plant is at capacity the Dec quarter will be a more accurate reflection of steady state production costs. The marginal cost of producing each additional pound is likely to be low and falling and It would appear management have calculated their claimed steady state production cost per pound of $1 taking this into account. I expect the Dec quarterly will show a cost per pound much closer to this assertion.

Management haven't BS'd us so far so I'm not inclined to believe they will in future.

The real issue here is the plummeting price of copper. Stockpiles are not close to historical highs but they are growing. If PNA can stay afloat with copper at around $1.50 then they will come out of this recession smelling like roses, assuming they don't get swallowed by a bigger competitor in the interim.

Just my 2 cents worth, not investment bible. DYOR!