The balance sheet, in my opinion, whilst has some nuance...is very good. How does the Bal Sh of say PDN, GGG, BOE, TOE, BKY, AEE look compared to ours? The nuance I refer isn't a curly 'get out of jail card'. It's an assessment that, with regards to PEN, imo, the price has previously been conveniently low to arrive at cheaper shares for PALA/RCF, as I had previously suspected ("save your pennies" reference where you got a shot at the title also.
My point now is that they are at their maximum holdings IMO (plus CN conversion, which we should expect in April '18) so in dovetailing the balance sheet convo into the prospects for the business, I believe that the lineup of usual suspects above (PDN, GGG, BOE, BKY, etc) then you can ask yourself (or not, as others aren't) whether they need to raise cash or not anymore to build their project (slight relief for BOE but still needs capex, different argument for PDN).
Point being, if PALA and RCF are buying more, then they are taking over this puppy. And I'll have no issues commandeering a blocking stake. Furthermore, I've had correspondence from Mark Wheatley that, while not working for RCF (but being their board rep) insisted that I didn't perpetuate a myth that RCF were trying to take over.
Oh yeah...the balance sheet. So put our balance sheet up against another peer and I'll give my best shot, as we've got to compare apples with apples. Some clown suggested $10m for the company, perhaps not getting past the first line that told him we had some $20m in the bank and 2 years of inventory paid for. So that type of downramp is just ridiculous and perhaps speaks volumes about the person itself, not the content.
And lets' say we all get it wrong and we go another 3 years (not 1-2) before U returns? So...we raise a small amount to resume our (now new) status as a 'on call/treading water' producer.
Fluffy...seriously. You're better than this. if this is just a snatch and grab trade for you, fine. But you honestly can't play that dumb and expect to come back and have a reputation. I (actually) respect you too as I know what you've done here and perhaps traders like you have been feasting off the flesh that's been falling off for a while. But again...seriously.
Perhaps to put it another way.
If PEN is in trouble (think about that for a while) by say end of '18/'19, 3 points:
1) We raise another say $5m - $10m to pay for G & A as we certainly aren't going stage 2. If people can't accept this, then they certainly don't understand mining. It's not hoped for, but it's dilution now that should account for 5-10% of dilution (if you don't participate)
2) Then also keep in mind that PDN (by then) is gone, I'd say CCJ would be scaling down, others would be out of business perhaps?? Who's left. There's no TOE if that's the case, no GGG, BKY would be lucky, WUC...nup. GoviEx...nada.
3) Could we drop cost profile even further as we move away from the high overhead model? (2 years is a long time)
Read in context, it's a good balance sheet and a great projection given our relatively fixed (predictable even...wrong word?) costs now.
Consider the posting today from Etchell. Given the headwinds we've had and the likely direction in the next 3 years, all of those 3 outcomes could be probable. And when that is a worst case, given the industry you are in - I'll take PEN over all the others.
A better question to ask the naysayers of PEN (who, famously don't frequent other U forums), is that if not PEN (which is fine in it's own right)...who?
How could any of these companies above (minus PDN, a different set of circumstances) get to production without the potential of what has occurred to PEN (sever dilution)?
Apologies for changing the theme Fluff, I gotta go now so I just continued my rant to get a days worth in I'm asking you to be genuine for once. If it helps, I've learned that nothing I say or do here will ever move the SP one way or the other. I gave that up long ago. Surely you could see the same and participate as a genuine contributor. You once put up a post: "LOVE PEN". With nothing else. In hindsight, looked like you saw downside and sold into strength. Good for you. Other times, you criticise. It's likely you buy on that weakness and congrats if you got into 35c - 40c. Now you want a retrace? Great.
But you don't offer anything of value. And I actually don't say it as a criticism. I say it because I believe you have intellect. So use it.
What do you know that others don't and what is it about PEN that is so fatal whereas the same issue is clearly washed over on other U explorers/producers. (otherwise you'd be there saying as much, as a logical extension) ?
Oh... You've got to tell us all (now that we have resumed a 'holding pattern 1.5 stage production profile) what any future CR $ is for. Say, the 20c CR you speak of. I understand the 20c thing. Sure, that can happen. Of course it can. But what for, needs explanation:
Here's my guess:
- it's not for stage 2 production, as we're not there until U price is higher and we jag multiple (or 1 large) contract to take stage 2 production levels
- it's not for G & A. We don't need it. We're cashflow + in near term
- It's not to buy more inventory. Not now at least, we don't need it at the moment. (2 years) Best bet is to keep production at lowest level as only to satisfy toll milling agreement (see Edgar)
So, with $20m AUD in bank...what is it for? It's a genuine question.
I fully understand the comment that comes from others :"all I've known from the company for past 2-3 years is price down, they get more cheaply, price down again, rinse repeat". But that doesn't undo the need to explain this time - what's this next raise for? Previous to this we had a 2 stage ramp up. The U price didn't perform...we went to 3 stages. U price tanked...we went to 1.5 and tread water/holding pattern/spot market arbitrage.
If you look at how Gus and HQ manufactured us out of this, it's actually very elegant. And it didn't occur overnight. Decisions were made that couldn't be accounted for months even 12m later. They have done hard work and they deserve some credit. Don't buy if you don't want, but when arguing the position the company is in...people need to start bringing their A game.
If we raise money this side of Christmas while just ASX listed, I'd be genuinely surprised. None of the other raisings surprised me, and of course I was expecting the last one. I got to participate in the Insto raising (but was not told of it impending...I just expected it), so I can't make the same claim to be shut out of this...but I'd like to think I could see dark clouds looming.
All the others can be explained, and in guidance given and hindsight, can be demonstrated that they went to the infrastructure that was mooted and accounted for. So now the company comes out with, not just an announcement - but a battery of actions and announcements (change of senior exec, production curtailment to indicate to the market that we are pulling stumps at stage 1.5 and satisfied as a 'mine operator' in a crap U market rather than a (impending) mine builder. I'd suggest others take heed of those announcements, as they are now a genuine theme.
I gotta go Fluff but give this some thought as I think you could contribute. if it's bad...so be it. But put it in context, and give reference to the audience what their other alternatives in the U space are? Are you overlooking good for the perfect?
Cheers
ps. sorry for typos- on hop
PEN Price at posting:
38.5¢ Sentiment: None Disclosure: Held
where you got a shot at the title also.
(20min delay)