Any thoughts??, page-27

Hey Alby, very much appreciate the reply (measured and honest).
We have all been there investment wise (taken too big a stake in a stock that we know is higher risk than we might usually be comfortable with). As I mentioned, I continue to watch PGO from afar because they are trading at a low E/V resource and reserve, they are unloved and they have good ground.

The main thing stopping me from buying in, is the usual issue, lack of capital. I know of course that Coolgardie will hopefully provide that, but... as I mentioned, it seems a big task for PGO to get the production going without further capital. PGO have printed quite a lot of shares over the past 2 years. This coupled with their share payments to the drilling contractor last year, and for the payment of the Coolgardie project itself, these shares are possibly part of the reason for the never ending slow sell down.

I mention the Coolgardie purchase, because I knew there was something else niggling at the back of my mind. When PGO bought the project, the deal also contained 40m shares which were to be escrowed for 6/9/12 months from completion of the deal - Coolgardie deal settlement details 2016



So I finally found the document again and perhaps ironically, that 12 month period is up just 2 days ago. So PGO have just paid a further $1.5m (which, after reading through the quarterly, is not actually included, which I would have thought they had to do... oh, wait, it was just after the 3rd Q, so... hmm.. that is bad, it would imply that PGO has much less cash than I even thought, as going from the quarterly, they projected to have $2.8m on 30th Sept, take a further $1.5m and you are left with just $1.3m. Then you have the usual ongoing costs, perhaps just $150k per month, but still. Money is getting very tight!)

I highly doubt I am the only one to realise this, so... hence the selling, plus you have McPhersions with their potentially, 40m shares (27m could have already been sold, I have not checked the Top 20 holder info yet), with a further 13m now allowed to be sold).

Sorry to be so negative about the company's current cash situation. I have no doubt that with the gold sector sentiment starting to improve, PGO will be able to raise more cash, but.... perhaps at a price as low as $0.04, at least if they tried to right now. My guess.... they will do it straight after the Coolgardie news all comes out. That would at least to me, make sense, as their Bundy project is a more long dated.

All good about your bias, I have it on all the stocks I hold. I just hope that ever year that goes by I get a tiny bit smarter on how to not let it affect me so much! (I am an optimist after all, why else would I take such big risks and invest directly in shares, haha).

Thank you for sharing your conversation with Gary. All that you say makes sense. As far as I have read, it would seem Gary has a high level of experience in the sector. So that is not holding me back from buying in (although I do admit, that Mt Bundy's location is a slight worry, as being that far north means that production will always be affected in the big wet). Still... the gold is there and profit can be made with a strip ratio of less than 2.

All good about who the toll treatment will be with. The plant is very close after all. I expect the deal will see around 90k ounces to be produced over perhaps 3 years? AISC of around $1200-1300, which should see PGO make around $12m a year. Which would be awesome, but... just need to get over the big hump that I discussed above.

I hope you get the clarification you want from Gary. It would not surprise me at all if my overly negative view means I miss out of a great buying opportunity, but.. until I see that Gary is able to pull off the Coolgardie treatment without another big capital raising... I will continue to watch.

I do think that PGO has a great project in Mt Bundy, but for reasons that I cannot put my finger on, the 'market' seems to be quite disinterested in it, at least right now. I wonder if Gary would be willing to bring in a partner like Westgold? Better 50% of something that another few years of dilution and small drilling programs. (have to cut this short, not enough hours in the day, but happy to discuss all the above further).

Good luck with PGO either way Alby!