First then Offset zone was going to be the salvation
Then the shaft into the offset zone
Then lateral mining in the offset zone and ruby zone
Now hints of deeper shaft will be the salvation.
Slip slidin' away
Slip slidin' away
You know the nearer your destination
The more you're slip slidin' away
One step forward and two step back
Nobody gets too far like that
Desert Rose BAnd
I don't like PD as an investment via a ETF for the following reason:
Right now PD is 710. 3 year estimate (buy a number of banks) is 786 or about 11%. Less mgt fee return would be about 3%/year. IMO not a good investment period. To play PD you have to be leveraged somehow - futures or options on EFT or maybe SWC. None of which excite me right now, Would rather own HD.
"ABSA announced a delay in their new SA Rand based palladium ETF fund."
They said "paperwork" but IMO I think they did not get enough demand for another PD ETF.
PALL peaked at 1.2M oz in Feb 2011 and dipped as low as 700K as recently as Nov 2013 and now has been at 717K for 2 months. I think PD ETF was a fad that has passed.
Interesting that bank estimates (shown in latest PAL presentation) are as follows:
may have adjusted for new finance but has it adjusted for 2014 operating reality? Guidance was very negative especially with regards to cost. All they got was 27M, just a few months worth.
"improvements to their mine to reduce costs which I see as a long term positive"
While that is certainly true. the real question is whether NAP can limp along long enough for the costs to come down. Dropping PD and byproduct prices are not helping either.
This is not promising:
"Accordingly, cash costs per ounce are forecasted to be higher in the first half of 2014, and are expected to decrease to approximately US$450 in the fourth quarter. The Company estimates that cash costs per ounce will average around US$550 for the year and that the overall cost per tonne milled will range between C$51 and C$55."
If they expect to average $550 for the year and also expect to be $450 in Q4 then expect Q1 and Q2 costs to be awful. Simple math. Wasn't long ago that we all expected sub$350 costs.
Remember these are cash costs, not all-in costs which are higher than current market price.
"Do not buy at the top and do not sell at the bottom."
Please let us know via posting when top or bottom is reached.
It is also possible and IMO less risky in many stocks to buy high and sell higher.
PAL has repeatedly said they do not hedge future production. The only hedge they have is for the PD $625 warrant exposure. They also short term hedge between delivering the concentrate to the smelter and final payment.
If you look at the Kitco 5 year chart you will see that Pd has been sideways for the past 3 years trading between 600 and 850 (and more recently 750).
During these three years
- there have threatened and actual strikes and violence in SA
- claims of a robust global auto industry
- annual reports that Russian stockpile is gone
- reports of Pd moving from surplus to deficit.
My (serious) question is this - if the above failed to move PD into an significant uptrend what different things are you proposing (or hoping) will? Please do not cite manipulation as reason PD has not risen.
Awaiting your reasoning.
Conversion price on T1 debs is .57 (USD). So I would guess they expect to see more than that as repayment IMO is very unlikely.
Another way to look at it is that you can "exercise" now at .42 without having to loan PAL any moeny. :-)
"of 7.5% convertible unsecured subordinated debentures"
These are specifically UNsecured and subordinate (to BAM). Pretty risky IMO. Only hope for buyer is PAL success that moves the PAL price above the USD conversion price of .57. IMO that's the plan , on a spike, exercise and sell rather hope to be repaid at maturity.
That is correct - accounting rules require that any items from possible conversion of bonds, exercise of wts and exercise of stock options be included in the EPS calculation **IF** there is reasonable chance they would be exercised at the time of the report. Since the PD wts are "in the money" their effect gets included but shares from these db's wts won't be included unless PPs rises above conv and exercise price.
That's why you often see two lines in reports
EPS (only counting actual shares outstanding)
EPS - fully diluted (counting outstanding shares plus those already likely to be exercised)