PLA has been hit by the general collapse of the markets and now the disappointing December quarter mining report, which also sets us up for a weak March quarter.
Longer term my positive feeling on PLA remains unchanged;
1. Teething problems are a very common risk in new mining ventures and we should remember the experience of both Panaust and Equinox new copper mines. Optimal production targets at SH should be reached even if takes a couple more quarters.
2. Kalplats BFS is due to be finalised over the next couple of months and from info to date it is not unreasionable to expect a very significant resource and annual production target upgrade. I would also particularly be interested in any developments from the 50% JV extension.
3. PGM prices are expected to increase but we have had statements that current PGM producers share prices are fully reflecting expected 2010 prices. I tend to agree but see this as where PLA differentiates in that a) Achievement of Smokey Hills targets should support sp going forward, b) Kalplats BFS resource upgrade and funding not reflected in current sp and when this happens there could be a significant re-rating. (c) Final resource definition at Rooderand could deliver similar significant upgrades to what we saw at Kalplats (d) Signiifcant exploration upside from Kalplats extension and Stellex.
There will for sure be difficulties and hiccups along the way (Funding issues, start up issues at both Kalplats / Rooderand and market sell off's)but longer term PLA has the chance of developing into a serious mid tier platinum producer and investors are now offered another opportunity to get in at the beginning at a very reasonable price.
BR Max
PLA Price at posting:
99.6¢ Sentiment: LT Buy Disclosure: Held
