Hi folksHeraclitus, thats two days in a row where the VWAP has...

Hi folks

Heraclitus, thats two days in a row where the VWAP has been considerably higher than the close.

Its a manipulated sell down alright and its worked a treat.
Didn't think we would revisit these levels again...based more on the strong trend up and the pending news that will completely redefine and considerably re value this company.

But heres the good news.. and an indicator I think for a serious re rating shortly;

As the post header says time for a comparison:

Lets look at Flinders Mines (FMS)first up. A fellow quality iron ore hopeful with a market cap nearly double PLV's (PLV around $200 million. FMS $355 million.

Now this quality little IO player has just released its PFS and the numbers look pretty good.

But does it stack up to PLV on majority of criteria?

You be the judge.

FMS production is targetting Q1 2014. So PLV easily have that covered as the aim for PLV is last qtr 2012.

So they will be first to production.

How about time to pay off debt? FMS reckon it will take them about 5 and a half years.
PLV clearly have them on that one as well.
Of course the PFS has not been released so 'any' comparisons at this stage are at best ball park..

But...imo at least a DSO operation on line last qtr 2012 with 2mtpa would put a serious dent in the debt required for the 'beneficiation' stage of the project.

Remember folks that JTC will pay $$$ to PLV. Those dollars will more than adequately cover DSO project...its start up will most likely be sub $50 million

That = no debt for DSO project obviously

Once that is up and running the $$$ earned will go into paying the 'other' debt...for beneficiation project.

Now of course we don't know the details yet as PFS isn't released as ive stated already.

But if JTC fund a big portion of the beneficiation project as expected, and PLV go remainder debt as expected then just how much debt are we talking about?

200 million perhaps?

Or to put it another way, 2mtpa of DSO at a profit of $100 T!!!!!!

Payback looks pretty quick for PLV and if IO prices hold up then its not improbable that PLV could be debt free soonafter FMS start producing any iron ore!

Now lets look at the capacity.
FMS are going to intially start up at 5mtpa for a project cost close to $488 million.

PLV will initially do 2-2.5mtpa but add beneficiation and you have a project looking towards 10mtpa.

So in first 5 years of operations PLV will produce more iron ore...and remember the quality of the beneficiated product will command a much higher price per tonne.

So on capacity and output and quality of the beneficiated product PLV would 'appear' to have FMS covered here as well.

FMS will be a 5 year project at 5mtpa with a cost of production similar to PLV levels (as advised by broker reports prior to PFS release obviously)of $35T.

So they are even on this criteria.

FMS do have the capacity to move to 15mtpa but as mentioned above, this option is 5 years out.
This could be achieved initially of course and may be considered....for an additional $640 million.

So the total cost of the FMS project = $1.28 billion.

On current estimates that treble the cost of PLV's operation (s)

Remember FMS is currently 150 million MC greater than PLV....nearly double our MC.

It is landlocked. Its infrastructure spend will he higher. Its risk profile imo is greater as it will take longer to get to market.

As I say, PLV and FMS are both quality emerging producers.

Think PLV is overvalued?

Think again!

Toot toots aside and similar comments, the value here is clearly not understood. It is not appreciated. And one only has to look at the comments here by another poster commenting on an analysts comments about PLV's infrastructure rail concerns (say what?!) to know that this story isnt fully understood..

At least not in Australia anyway ;)

Please consider! MC Not too squeezy!