Got a fair bit of spare time on my hands out here at work so I decided to go through the March Financial Report and from what I gather they are set to lose $95M net give or take a little for the full financial year. That is at a spot price of US$35/lb. They currently have $469M cash on hand through issue of bonds (which will dilute our shares eventually) and 25% sale of LHM and a couple of other bits and bobs. Assuming they do reduce costs slightly next year (estimating $US3-4/lb) and the spot price remains the same they may end up with a total loss of $US75 million.
This is a downward trend as the company strives to cut costs through efficiency and less spending on exploration. Add into that the ever so slowly increasing spot price and those loses in 3-4 years time should be gone leaving them with I would say a reasonable guesstimate of $US200M on hand and by that time the spot price should be a fair bit higher.
From all of this I reckon that they require $US50/lb to start turning a profit again and at $US75/lb as they state they will consider opening up KM which will bolster volume significantly.
So from this I believe the company is in for a few tough years which in my opinion is a great time to pick up dirt cheap shares, shares that are cheaper than they have ever been. Maybe it goes down a bit but if you are in for the long hold the company can most certainly rise back towards it's glory days. Maybe in 5 years time you will be sitting on a ten bagger if you get in at today's price. Bit to slow for some I know and that is assuming no one blows up any more reactors and if that happens U will only be good for dirty bombs!
So I ask you poppy how do you arrive at the $US75/lb before PDN begins to turn a profit? Just so you know not digging at you I agree with alot of your short term outlook but it is good to have a spirited discussion.
Please DYOR
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$13.97 |
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Mkt cap ! $4.203B |
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22 | 5508 | 13.980 |
13 | 8480 | 13.970 |
8 | 2628 | 13.960 |
8 | 4431 | 13.950 |
Price($) | Vol. | No. |
---|---|---|
14.000 | 2580 | 24 |
14.010 | 2252 | 12 |
14.020 | 3782 | 12 |
14.030 | 3360 | 12 |
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