Surprise good or bad will be VERY limited but still possible in my opinion.
Last year, we had an extra cost for the rain and flooding etc etc...many costly items can derail the normal way of doing business in the mine and they always wait for earnings to give the bad news.
On a positive side we can be ahead of schedule at the shaft? or stopes delay corrected etc etc...Everything will help mitigating the picture. We may get some info about the sheriff zone or other surface zones which may be used to push back phase II?
But, basically PAL has said what to expect, for a while now...and it is not good. Debt is huge while revenue plunged. Concerning covenants too...
Phil du Toit indicated that the production for 2013 will be down about 15% from 155koz to 135koz *from memory* and cash cost will be above 600 dollars while transitioning *it was strubble a while back*.
Lucky Palladium is still at 713, down only 3% Q to Q for Q2 but by-products like Gold, Platinum, copper and nickle are down a lot adding to loss. I expect around 33koz from 45koz last Q or nearly 28% down. I do not blame du Toit or Languille for that but the precedent management who should be sued.
The only good news for me is that PAL has escaped bankruptcy, in extremis, with the last financing from BAM but financial will show a grim picture at least for Q2 and Q3.
Most traders/investors, will act the way I do and will sell out before earnings but, as usual, they will wait for the last minute and will exit all together the same day because hope is the last thing that escapes our soul.
To me, it will be an EXCELLENT opportunity to get PAL at a depressed level again and probably under 0.95 again, could be wrong so.
My opinion is that we may trade under 0.90 this time for a little while.
My buying will be related to what will happen the next 3 Quarters and what Du Toit will say.
If I am wrong then I will buy PAL at a premium and ride it up instead, makes no difference for my trading.
I think I will try to sell out just before August 8th then...Not much left now.
Unless, some tremendous news regarding LDI or a take-over of some sort, I expect PAL to take a serious plunge after production and after cash cost will be shown.
I do not wish anything here just simply stating what I believe it will happen most probably.
If PAL surprise on the upside? then I will be buying the up trend and if the earnings are a disaster? then I will be buying if it reach the low 0.90's.
Q2 earnings will be the low point for PAL, production at record low and a cash cost above 600 will be grim. It will be somewhat mitigated by the 713 dollars for palladium but by-products. The risk is too great not to take profit and start a brand new holding perhaps after earnings.
We are at the point with PAL where shareholders need a better understanding of what must be done to achieve Phase I with an honest time schedule. We need to know what can be done to replace Phase II production?
My future trading and position will be directly related to what will be said at the CC.