More than 10X (TEN Times) Current Share Price, page-5

Dear Iminvestor101

Thank you for your comments and question. Let me respond by making some observations and how they might relate to PMY, as the answer to your question does not lend itself to the options presented.

Stock selectors are less concerned with timing the market cycle, than they are with searching for differences between PRICE and VALUE.

Traders and investors generally agree that share prices tend to track the value of their underlying companies over time and that share prices can diverge from value over the short to medium term.

Contradictory approaches undertaken by traders and investors can confuse people. Investors attempt to identify mis-pricing and use it as their opportunity to buy or sell - they seek enterprise value. Traders act as speculators, attempting to identify market sentiment and to capitalise on the very short, to short and medium term movements of share prices or the market generally.

Traders use stop loss orders and sell when a stock falls in price by a predetermined amount. Investor's do not use stop loss orders. In fact they are likely to buy in a falling market as long as their view on the investment merit of the stock remains in tact. We have seen this strongly with PMY. I seem to recall 12 of the top 20 shareholders, someone recently posted, picked up stock dropped on market over the last 6-9 months and two of those people were Simon Noon the Managing Director and former Chairman Richard Monti, people who best understand the opportunity.

The period of most relevance for PMY is the period since the acquisition of the Sorby Hills tenement. This happened less than 2 years ago. The market since then has been saturated with the on-off Brexit, the on-off US China trade deal and the recent COVID-19 and the oil price shocks. All of these things are outside of investors control. Traders with stop losses and computers with algorithms in these instances might deliver speed of reaction, but neither have INSIGHT into the value of any particular company, and react inappropriately.

While market efficiency might explain share price movement a lot of the time it is unlikely to explain stock prices when emotions are strong. Extremes of collective emotion can result in the market mis-pricing stocks. The intrinsic value of an investment might or might not equal its market capitalisation at any point in time. Successful investors are those who act on calculated values that are "less wrong" than the daily market price.

The most reliable calculations are made by investors using relevant information that can be reasonably substantiated - referred to generally as the facts. For us it is the publicly available information about PMY, the external environment in which it operates, our knowledge from experience etc. Discounted cash flows are the most common valuation method used and I have used PMY's own 2019 PFS as my guide for that. Yet the most important factor is not the method used but the quality of the inputs.

As time goes on the quality of the information released by the Company about Sorby Hills has in my estimation increased beautifully. The level of engagement, the sense of urgency and the quality of the work by PMY management and the Board is impressive on this measure. By the way, a strong indicator of a quality investment is one where the capital cost can be repaid in less than 10 years. Based on the available facts Sorby Hills can be repaid in well less than 2 years. This is stunning.

Charles Dow is quoted as saying that "values determine prices in the long run. Values have nothing to do with current fluctuations. A worthless stock can go up five points just as easily as the best, but as a result of continuous fluctuations the good stock will gradually work up to its investment value. An investor who will study values and market conditions, and then exercise enough patience for six men will likely make money in stocks".

An investor should use value as a bedrock of investment decisions - independently value a stock and then wait for the market to present a favourable price to either buy or sell. Real opportunities do not present often so patience is important. Patience is the hallmark of true investors. Furthermore, our investments should be limited to the very best deals we come across in a lifetime. I read these and similar comments in Michael Kemp's book "Uncommon Sense - Investment wisdom since the Stock Market's dawn" before I can across PMY. It prepared me for my analysis and for my subsequent focus and investment. I now know how important it is to have few investments that meet certain criteria and follow them closely, timing buy sell decisions carefully.

One of the only consistencies in the financial markets is how people behave when faced with similar sets of circumstances. Humans react inappropriately when interacting with the financial markets because their instincts were shaped in an environment of physical risk, not financial risk. The fight/flight response causes many to sell at a time of panic, the worst time to do so. They are influenced strongly and unconsciously by groupthink.

Investors who can think independently are at an advantage.

We should always seek correctness, not consensus.

V