I posted on PAL forum my thoughts about an eventual share swap but yahoo doesn't allow me to re post it here for some idiotic reasons? Please go to PAL forum to read my thinking about that.
I would like to read some posts about this idea and why it is a good or bad idea?
Thank you in advance
I'll chime in here too, as a former PAL shareholder. NO - NOT A GOOD IDEA! As some here have mentioned, PAL's debt situation is horrific, including the palladium "options" that went with one of those debt offerings. The finished mine (if/when they do finish it, late this year or whenever) should be a great asset. BUT, unless Pd goes well above $1000/oz, I don't see the whole package being worth it for SWC. It's such a shame that the two great North American PGM deposits were screwed up by horrible management, but Frank has done an awful job for SWC (especially with the Peregrine fiasco) and PAL is so screwed up that even if they could be acquired at 1 cent/share, it might not be worth it when you factor in the current debt and forward sold Pd. Of course if Pd prices keep rising, that changes the equation.
All due respect Alex your post is nonsense and total misunderstanding of the PAL debt...
You are talking about palladium option which is hedged and at 25koz level only. You must have been hurt by PAL to use such horrific statement regarding the balance sheet with some 47M in revenue the last quarter. And I do not say that PAL has a nice one either.
But you are entitled to say whatever you want...
You do not seem to realize that a partnership or a joint venture between the 2 only serious palladium in North America is a benefit for SWC specially at this valuation still over 120% of the BV (9+) and will create a strong association going forward.
PAL can sustain itself right now with a minimum loss and the only problem is the financing of the shaft or about 80M plus or minus remaining after investing 330M so far!!
The only problem of PAL now is a bottle neck financing to achieve the Phase II of the shaft by 2015 specially because their credit line is fully drawn at 60M and due July 2013 or re negotiated then.
Doing a joint venture will give SWC a 50% in palladium production by 2015!! and may not cost more than 20M shares.
PAL is a tangible palladium mine with 16 years reserve proven with the expansion done and a 250Koz of palladium at 300 dollars cost. Go look at the reserve and the potential around LDI.
Instead SWC has sank a FORTUNE in a gold venture Peregrine and has 300M debt now and may lose much more going forward.
Talking about intelligent strategic decision here? PAL could cost perhaps only 20M shares plus or minus or less than 20% and will give a 50% increase in production in 2 years! The debt is already assumed by PAL revenue almost entirely.
The question is not IF SWC want the partnership but if PAL may be willing to accept it in situation of weakness and a bullish palladium that may help PAL to finance on its own?
Think twice about SWC and its future without a strong palladium base and "diversification"
Disagree. PAL is "too far gone" only because of the financial issues, not resource or mining issues. I agree with BB, that SWC takeover makes sense. All in all I think it is the best thing for the PAL stock holders vs the alternatives. Sad and disappointing PAL cannnot get to 2015 on its own. While it makes sense IMO SWC BOD won't go for it right now. Right now I expect the are fighting about what kind of donuts to buy for the BOD meetings. IMO the BOD is philosophically divided, just as the Reps and Dems, and until they (both) realize they only way to move forward is to work together nothing will get done.