PDN SMM

You did miss an important point. C1 was materially affected by...

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Oracleyoda

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16/11/14

10:29

Post #: 14297360
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Originally posted by goldbear77 ↑

now this is a good subject! good to see someone engage in a fact based discussion.

But - as to your numbers... utter nonsense

LH ran at c1 $US35.1/lb cost Sep qtr according to the quarterly.

Then in most recent preso they say they are hoping to reduce c1 cost by 6% over fy15. They dont make it clear whether thats against the $31 pre production slowdown number or the Sep $35 figure - so youd have to assume $35 - ie a reduction of $2.10/lb.

So c1 cost not likely to be less than $US32/lb in remainder fy 15. Agree costs may be lower in fy16 - but who cares as by then the refinance will have been done or not and the cost or benefit will be in the sp.

As mentioned, c3 costs - ie the non direct opex costs are approx $20/lb.

So NPAT breakeven at PDN corporate level - assuming no particular nuances of d&A, goodwill ect - would be $US52/lb.

there is no evidence in what ive read to substantiate any meaningful reduction in fy15 c3 all in sustaining costs. I guarantee - if a $30 p& i repayment was going to susbtantially reduce All in sustaining costs they would flag it in bold.

But even if i took your $30m early repayment proposition at face value - across 5.4m/lbs thats a maximum of $5.55/lb principal + interest so say $us6/lb 'saving' - so bank balance shrinks to $170m but breakeven would become $US46/lb.

I dont buy that number - but at least it makes for a good argument as to why PDN should be increasingly become a BUY.

But PDN would still be loss making December quarter.

But this is a good discussion - if you have math to differ from what I;ve outlined please lay it out for us

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You did miss an important point.

C1 was materially affected by the plant mainyenance in the sept quarter. The real number is 28 at name plate production.

PEN Price at posting: 2.5¢ Sentiment: None Disclosure: Unspecified

SMM Price at posting: 21.0¢ Sentiment: None Disclosure: Unspecified

PDN Price at posting: 42.0¢ Sentiment: Hold Disclosure: Held
4 Upvote

0 Great analysis

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You did miss an important point. C1 was materially affected by...

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