The why to this is that PDN were mining the U and it was costing about $26 per lb to get it out of the ground and process it. Then they were selling it for approx $28 per pound. PDN was running out of money and could no longer afford to mine the Uranium.
However they did have some nice stockpiles. So they started processing the stockpiles which brought the cost down to about $16 a pound. A good idea.
The main drawback here is that the Chinese company CNNC owns the stockpiles as well,, and they do not necessarily want their high grade stockpiles used just because PDN has created a financial nightmare for themselves.
Some sort of agreements must have been made between PDN and CNNC to process the stockpiles. It seems that CNNC has PDN over a barrel in a number of ways at the moment.
CNNC are one of the major bondholders.
CNNC have some sort of right to buy in regards to purchasing more of the mine before 11 March.
PDN owes CNNC $90 Million dollars in a seperate loan that PDN organised.
CNNC have security over the rest of LHM, probably to do with the $90 Million loan.
PDN must have made some concessions to CNNC in regards to processing the stockpiles as well.
PDN Price at posting:
13.0¢ Sentiment: Sell Disclosure: Not Held
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