mqg negotiations have started?, page-8

It is interesting to note that a Newsletter frequently referred to on this site (and a one-time promoter of PGI) has recently circulated a research report covering a fellow gold miner, Doray Minerals (DRM), with the analyst quite excited at this company's future prospects. Taking a closer look at DRM's figures and comparing them with PGI's forecasted results (see last week's Quarterly report) confirmed my belief that PGI is vastly undervalued.
Let's assume that PGI meets it's Production Forecast in CY14/CY15 (viz: 103,000 oz AU + 852,000 oz Ag = Operating Profit of US$88M):-
* Doray (Market Cap A$120M) is stated to have a profit margin of A$523/oz (with a gold price of US$1,200/oz; A$ @ US$0.87). Converting Panterra's Ag to Au using Ag @ US$19/oz, i.e. a ratio of 63:1) PGI will have an operating profit of A$799/oz during this period, bettering DRM's by 53%.
* With a forecast Operating Profit of US$88M PGI will be able to eliminate it's current debt of US$41M and, in the space of two years, have cash in excess of US$40M and no debt - a remarkable achievement!
* DRM's 'mine life' is estimated at 3.7 years - PGI's is >5 years with the firm potential to secure feed sources to extend the life by a further 15+ years.
With a successful outcome to this world-first utilisation of Albion technology to extract gold from sulphide ores, coupled with three under-explored exploration concessions totalling 24,500ha adjacent to high-grade operating gold mines the future looks very promising indeed.
In conclusion, DRM's Market Cap currently stands at around A$120M with PGI's at A$27M - quite an amazing differential given the facts and figures shown above. With a successful conclusion to PGI's tweaking of the plant's circuit in coming months it will only be a matter of time before the market wakes up to the future potential of this vastly underrated project.