morningstar have upgraded status to buy, page-2

well i bought some PEM this morning DESPITE being bearish re base-metal prices after mid-2011. The fundamentals look sound and low cost of prod obviously appeals. Having silver by-product certainly helps. Here is some more analysis from a fav source of mine.

'Revenue declined 18% on the prior half to $127m due to weaker commodity prices and lower sales. NPAT declined 35% to $18.5m. FY10 Production guidance remains 120,000 - 130,000 tonnes of contained zinc and lead. Our FY10 revenue and NPAT forecasts remain unchanged at $264m and $43m respectively. We upgrade our recommendation to Buy. PEM remains a good turnaround story and cost control is tracking well. On Broken Hill alone, the stock represents value. The FY10 PE of 5.4x looks cheap. New CFO, Angelo Christou, adds additional stability. Exploration, development and M&A provide potential upside. Perilya produces zinc, lead and silver from the historic Broken Hill underground mine. A pipeline of growth projects, exploration upside and leverage to zinc and lead
prices attract. Net cash of $56m assists expansion or acquisition plans and provides a degree of insurance against volatile cash flows. Cornerstone investor Shenzhen Zhongjin brings stability to the shareholder register and should allow the company to focus on longer term plans. Exposure to volatile zinc and lead prices makes PEM a high risk investment and only suitable for risk tolerant investors seeking production growth. Development, commodity and single mine risk needs consideration.'