The announcement today was about what i expected and although it will have a negative impact on the SP in the short term i think the overall result will be very positive for long term holders.
PLV has continued to move in a direction that will maximise value in the long term as opposed to seeking short term gains.
I think we will see a significant sell off from holders who were seeking short term profits - i believe most buyers who entered the market over the last few weeks were expecting a binding JV or funding agreement which would spike the SP upward. Todays announcement highlights that massive gains in a small amount of time is not the PLV ethos and this is the long term venture.
Given Tonys position to date todays announcement underlines the fact that PLV have adopted a slowly slowly approach to developing this resource. To me this shows they are in for the long term. Given the Tony and his family hold circa 6m in stock it should give confidence to holders that he is in it for the long haul (and personally committed) and not seeking a quick deal and dump scenario which probably could be achieved from all reports.
Given the MOU will stretch out to Mar 2011 it will enable PLV to continue to remove risk from the project by hopefully ticking the boxes such as a Native title agreement. By March next year it will mean most of the pieces of the puzzle in place and the SP can realise its true value.
Why would Tony agree to an MOU when he might have been able to secure a binding JV! Simple he knows the true value of what exists and would rather sure up the resource tick all the boxes regarding the MOU and then put a deal in place with the Japanese that reflects the true value of the asset held. Why would PLV agree to an MOU that could be achieved, they wouldnt so no doubt they are hyper confident they can meet all requirements of the Japanese.
I have held for over a year and as tempting as it was to take almost 50% profit over the last few weeks it is not worth the risk of missing the boat especially when keeping in mind the potential long term gains. If we are still hovering around the 60-70c mark mid next year i will need to reassess my position but i dont believe this will be the case and expect the SP's true value to begin to be realised by mid next year.
Satori thanks for your posts i find them most informative and well thought out!
Good luck to all and lets hope we see a positive announcement regarding a resource upgrade shortly to help shore up the SP and ensure we dont slip back down to the 40-50c levels previous seen.
PLV Price at posting:
64.8¢ Sentiment: LT Buy Disclosure: Held
