low operating costs, page-4

Nklex,

Applying the PEN/BMN cost ratio of 1.5 and assuming a common uprice then yes BMN would have to produce some 1.5 times more then PEN to deliver the same profit. Although the maths is correct it is not apples for apples or even par because that 2.25M is only part of the total yearly 6(5-7M)lbs BMN is targeting or is 4.5 months production, whereas PEN's 1.5M is a full years production target. For instance over a full year BMN still makes 2.7 times more profit (6/2.25) and thus all things being equal eg share vol, then BMN would still be valued 2.7 times more.

I think more appropriate is that PEN to match BMN has to produce some 4M against BMN's 6M to achieve the same overall yearly profit and goes to show the benefits of low cost ISR mining as you have stated.

In process/mine production, assuming demand is there, production volume is everything in relation to potential revenue, profit and company value. Increasing volume reduces unit cost and thus increases margin. That's why it so pleasing that PEN will most likely double production at Lance and only needs an extra 1M to match BMN.



regards JJ