PDN post 21/04/2012 HC to PDG 2 ERRORS CORRECTED see ******* well firstly add the company is not what it was when it originally took out the CONVERTIBLE NOTES.
at those points in time the markets were higher so was the PDN share price... However PDn was still in the development stage....
Pdn now has two operational plants with sales contracts for HIGHER than the SPOT market......
It still has some old contracts ,so with the new contracts added in they are getting close to an av of $60/lb....thats well above the SPOT market......
Being at the more advanced stage PDN (as a 2 plant producer) it is now longer in the Higher Risk category when it comes to obtaining FINANCING...ie convertible NOTES
so it can attract lower cost financing on its own terms...unlike before........something the Brokers report left out as did the AFR
and remember INTEREST RATES continue to FALL.....GLOBALLY....and are expected to Fall more.....
....so there is a lot of money out there seeking a good return with low risk........they won't get the returns they require from any Banks......
At this point in time ...if Pdn wanted to pay out the 2013*** NOTE......it can easily do so with new financing on MUCH BETTER TERMS WITH HUGE SAVINGS to the company......
...and technically doing so now....11 months before the due date would be a wise move ...as any prospective financier would know that PDN is NOT A DESPERATE BORROWER......
...THEY WOULD get a much lower interest rate and probably a longer conversion date and of course would have no share price linked... covenants.
----------------------------------------------- Convertible notes interest rate charges are no different than say 2 people going to a bank and asking for a loan.....
One may well get the loan at a much lower rate as they are deemed less risk...they may have more assets to put up,higher income,longer term employment.....etc
The second person may be deemed HIGHER risk so they will pay a premium to the advertised normal lending rate...the reasons would vary but they would not meet the same standards as in case ! ------------------------------------------------------
Analysts and Journos influence the market....
The latest one from a BROKER about its concerns PDN may not be able to meet its note repayment in March 2013 was the foundation for the AFR article.......
NOW go back to the Q4 2011 REPORT....the media ONLY highlighted and ran with the "IMPAIRMENT" issue but omitted to give any explanation on the the issue......just how many people who read papers etc REALLY understand what an "IMPAIRMENT " really is.. .....its an accelerated deprecation which will be offset against future TAXABLE income.....
all they would have seen "loss""... OH pdn is in big trouble.... ---------------------------------
The MEDIA is about selling advertising space...so they require sensational headlines .....accuracy in full....is immaterial.....
Most of the Journos who write about the market pull their information from ASX headlines and select "analysts" who are also associated with brokering firms.
The Journos for the most are not experts on the market...there is the odd one or two who are very good ....
.......................................
As for many brokerage House they have vested interested they issue puts calls.....are involved in lending stock for shorting.....are involved in the issue of warrants ...and the list goes on..........
They make money irrespective of which way a stock goes....up or down. ...................................
Fundamentals is what it now boils down to
2 operation plants some teething problems ..all companies experience these established and ones at the PDN stage.......
CASH in the Bank US$128.8 M at 31/12/2011
inventory valued at lower cost of US$177.7M at 31/12/2011 increased inventory according to the latest report ahead of what they said was to be HIGHER SALES volume in Q2 to June 30 2012
KM Plant reached 96% nameplate inspite of the wet season ,delays in peroxide delivery and using an unsuitable REGENT
LHM PLANT WAS AT 90% of stage 3 at the end of Q4 2011 Q2 saw its production down 140,421/lb for 2 reasons which have NOW BEEN RECTIFIED....
LHM ore MILLED by 50,002 ton ********************************* Grade INCREASED Q4 693ppm Q1 706ppm --------------------------------------------
During a development period and global market problems its a good time for some firms to easily play short then long....keeping a share in a tight range...till they can no longer hold it back....they make money both ways....till they lose control.....then they play again on the rises......
PDN is recogonised by the Nuclear Energy industry as a reliable independent supplier of uranium......
Pdn has its Canadanian assets now open for exploration... Cameco (canada) was out bid by Rio for Hathor Cameco already has a working investment relationship with Pdn in Australia...Pdn being the manager of the project
SMM....LNP win in QLD...Fed Labor allowing new Uranium mining in Aust..but for individual states to make their own decision.......Federal labor now to allow India to be a BUYER of Aust URANIUM.......
SMM...in QLD...Mt Isa District....over 82% owned by Pdn ....AREVA with about 10.2 %....revelation Fund with about 5.1%
...................
So from whats above its not hard to see that a TRADE SALE in Part or Full may be on the cards soon......
I anticipate any PART TRADE deal will involve a CASH payment component to PDN
AREVA paid $6.10 a share for 21,879,518 shares pdn did a script swap for its 178,911,682 shares in smm.. NO CASH INVOLVED.....
Revelation Fund holds 11,110,332 shares....minor player in this game.... SMM total on issue 217,981,769 shares
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NUCLEAR ENERGY INDUSTRY EXPANDING GLOBALLY
435 now operational 7 new plants came into operation globally 2 new plants under construction 58 New Plants under construction 4 NEW plants to start up in United Arab Emirates (UAE) in 2020 1 New Plant to be operational in the UAE in 2017
MORE plants expected to be ordered and constructed in the UAE REGION....by other countries in the region.
Japan... 51 plants 1 still online 2 seeking permission to re-start japan Govt does NOT REQUIRE provincial Governor approval to allow re-starts of plants that pass safety inspection...thats the LAW....
BUT the Japanese Central Govt would like to consult with and give the provincial Govt's a better understanding of the safety issues.....and assure them of that the plants are safe to re start
THEY will re start...Japan cannot afford to be NUCLEAR POWER FREE
OVER 30 % of all power in Japan comes from Nuclear PlANTS
NO RE START......AND some provinces will be virtually with NO POWER AT ALL
The rest of the country will suffer rolling brown outs... Industry will suffer......people will be laid off in the thousands........
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NUCLEAR FUEL DEMAND
Nuclear Power producers have to plans their uranium supplies many years ahead......
With new start up in the pipeline they have to sign contract now.....they have to invest in producers now......NOT when they shortage arrives and the cost of URANIUM GOES THROUGH THE ROOF.......
........ NEW PRODUCERS OF URANIUM
with the LOW SPOT PRICE it will be increasingly difficult for potential new producer to develop their resources to THE OPERATIONAL PLANT production stage.......
They will be deemed HIGH RISK FINANCING.....and any financing will come at a big premium ...a premium interest rate that they will not be able to service.......
ONLY major energy suppliers will be able to develop these deposits........and they won't pay a big premium for early stage prospects......they will be looking for ones that have proved up the deposits to the point that they can move to planning either building PLANTS of do Direct Shipping of ORE to established PLANTS.
--------------------------------------------------- Analysts and Brokers are aware of all this but have a bit of time on their side to play games with URANIUM STOCKS....THEY do it with GOLD and COPPER companies all the time......
well ....so much more could be written....but its time for the readers to start trowling the web....finding information....printing it out....highlighting the main points.......then start adding input to this forum.....
..... and don't worry about other people .....everyone misses critical and minor issues.......gets some point wrong....the forum is here to help each other........not about feeling foolish because we get some points wrong....its a LEARNING EXPERIENCE.....SO DO IT.....
------------------------------------------------------ AND show appreciation of good posts ...to encourage people to do research and post it.......
GIVE them a TUMBS UP for good posts.... THUMBS DOWN when you feel they are wrong etc.....
PDN Price at posting:
$1.68 Sentiment: LT Buy Disclosure: Held
(20min delay)