whats happened and what is happening?, page-9

Hi Satori,

Welcome back i was worried PLV had broken your will to post. Clearly not after your mammoth post this week.

You have raised plenty of relevant points for discussion.

My take on it goes something like this:

PLV had a project that required $400m CAPEX start up. Management sold this and the whole story was built around these estimations (managements).

The main concern was NTA this got ticked and the SP rocketed to over $1.

PFS was a huge shock to the market as CAPEX almost doubled (bit of a game changer or deal breaker) and the share price was slammed. The reasons from management for this blow out was increased costs due to the mining boom, abiding by JORC and "oops we kind of misculated a few things". The killer with that is management is steering this ship and to make such a massive oversight and to offer a couple of throw away comments raised serious concerns around the credibility of management and in turn the project as whole.

Insert the rumblings of a second GFC timed perfectly to add onto the shock PFS and we have a SP killer.

I think as a result of the blowout in CAPEX which i believe management wasn’t ready for they had to change direction quickly and make compromises that were not planned. I think there was an air of arrogance/confidence prior to the PFS from management and holders (me included) and this quickly evaporated. I believe PLV went from being the girl with 10 dates to the prom to the ugly duckling. PLV’s position of power evaporated and the potential suitors gained the upper hand. We must remember PLV signed an MOU with the Japs but that didn’t proceed and Timeone appeared out of nowhere - does this sound planned to you? PLV clearly built expectation around the pre PFS figures when negotiating and the game changed quickly when true costs became apparent. Japs either walked away or made a reduced offer and surely given the mou and background PLV were expecting to sign with this party.

Enter Timeone. On the surface it appears they got a pretty good deal in their favour which would have been a combination of world conditions and the change in cost to the project. PLV selected Timeone and this may have been forced by the fact of cost saving regarding the beneficiation plant and ability to fund the project on new cost estimates.

I believe we now have the stigma of the boy who cried wolf! The market watched management peddle a story pre PFS which was miles off the mark. It is fair to say the market is now not interested in what is expected as told by management but what the data will say in the DFS. This is not unreasonable given the shock of the PFS. They got it wrong the first time so until they prove otherwise many will remain sceptical.

So i think we are stuck in the 20’s until we see a strong DFS proving this project is feasible and profitable. That is the first hurdle.

Second funding for the project. We hope this will come from Timeone. They are showing that this is their intention and i hope that process continues. Why was tranche 3 delayed? Makes me slightly nervous but hopefully it is a technicality and not posturing for negations or squeezing the company as the ability to seek funds externally would be difficult. Will Timeone try take the project over who knows but they are a business and if the opportunity was there then they may well make a play. Value of a takeover who knows as it would tie back to the DFS results you would think.

So we wait and hope that the PFS matches managements guidance. I keep my fingers crossed its a cracker and if it is then we are back on and the SP should respond in like.

Good luck to all and lets hope 2012 is a great one for PLV and shareholders.