Few posters are enough to lower the debate to a point where it is not fun anymore. I do not know if you noticed but I have at least one stalker also perhaps 2...
Will post from time to time but I have better use of my time right now.
Good luck with SWC...I am not still a long but recognize it is a solid company. I am not sure how SWC will really improve from here so?
Palladium seems caught in a flat line situation for quite a while and production will plateau from here even with the improvement of the recycling palladium at high cash cost.
Peregrine and Marathon are two dead weights(even after impairment that I have predicted) that will be carried along for months or years without any real solution.
SWC has to re-invent itself now or just go down to the 9 or 8 area where I will be willing to buy without problem. Do not wish that for you so and there are plenty of fish in the sea for me anyway.
God Jul och gott nytt år
Your numbers are not working all due respect...
Why do you want BAM to negotiate with SWC a deal? It owns already PAL with a debt at 169M at 20.5% yearly and a market cap at 80M.
Furthermore, SWC is USA and both BAM covenants and the Canadian government is against any foreign acquisition of the mine. How do you solve this hiccup?
Even your estimate of Peregrine is highly unlikely now...look at the filing and SWC estmate it at 100M but with Gold so low the prospect is not even salable at 50M now. Furthermore, just maintain the site for the next cycle will cost probably dozen and dozen of millions on top.
As I said, I think SWC/PAL make a lot of sense but it is highly improbable because of the situation and also the low response of the SWC management which is new and afraid to embark shareholders in another acquisition...after 2 financial catastrophe Peregrine and Marathon.
Time will tell
BAM and PAL are Canadian not USA...and BAM did exactly what it is allowed. No illegality there even if you are right it is predatory in nature I agree, so what...They are expert. Look at BAM company.
The question is how desperate was PAL CEO Phil du Toit to sign a deal like that. and how close to BK they were and still in trouble now looking for about 20M to 30M in extra financing that will come in form of equity financing.
They said they need this "bridge" to really profit from the new shaft. The new management did a HUGE financial mistake a while back by underestimating how much cash they needed to complete financially Phase I.
Maybe SWC can be a partner with PAL and financing the last leg for about 40% of the Company now which will position itself well to acquire PAL later on...by negotiating with BAM.
40% may cost only less than 40M in cash...Maybe it is allowed for SWC USA?
I am sure there are few Company interested as we speak because the situation and how cheap they can get the potential.
PAL has a good potential of reserves for at least 4 to 5 years with Phase I now completed...The shaft opened up these reserves and it is at 250Koz at 300 cash cost starting 2015 to 2018.
But, another 10 years of reserve are dormant until Phase II will be done and PAL cannot do that...They have some alternatives on the lateral Roby and Offset in shallow with a bulk mining helping to reach their goal without PII.
The shaft has a potential of 8,000 TPD and the mill can run at 15,000 TPD but the shaft is schedule at MAX 5,500 TPD and the mill is used not even half a month. Lac des Isle has been only worked on 1 km2 and a big potential around.
With this lack of cash and the huge debt PAL will not survive financially and will need at least a friendly partner. Guidance for 2014 is about to be released etc etc...
Time will tell
No more posting on PAL for me, I had enough...to much insults and harassment there.
You should not worry about getting PAL with SWC...It is almost impossible with BAM debt, they have totally strangled PAL now...I think it is too late for SWC anyway although I agree with Sample it would have been a good idea for both but specially for PAL that would have avoided BK down the road.
I have been in favor of a take-over of PAL by SWC for many months already and it has been a subject of a lot of discussion here already.
I even emailed Mike about the idea and if you look at my posts few months back you will see his answer. I do not know if it is possible so because SWC is not a Canadian company and it is required by BAM and also probably the Canadian government.
If you look at the BAM debt which is now at 169M dollars at 19% plus 1.5% and a total debt load now at around 245M with an yearly interest at 42M...
If SWC which is a USA Company wants to acquire PAL it will have to pay HUGE fees to BAM which may almost DOUBLE the BAM debt. Look at the covenants with closing fees and commitment fees.
The BAM debt CANNOT be repaid by SWC but the interest can and the interest will go down from 20.5% to 16.5% including closing fees. Then if SWC wants to acquire PAL now the BAM debt to be paid will not be 169M but about 325M!!! As you can see it is impossible...at these 325M you will have to add 43M of note at 6,15%, 36M of line of credit and about 17M in lease...or 421M dollars for the debt and if you want the PAL shareholders and management to accept that you will need about minimum 0,7 per shares at 197M and it is another 140M dollars. Total 561M
BUT, if SWC CAN use its Canadian subsidiary with Marathon then it will be able to avoid a breach of covenant and be able to take over PAL through its Canadian company and Mitsubishi somehow and keep the loan to BAM as it is by reducing only interest from 20,5% to 16,5% until 2017?
SWC Canada can also pay off the 43M note and other debt and will have PAL paying only 27M around yearly in interest to BAM until it will be able to pay it off.
The question is how low the offer to PAL shareholders can be and how big of the deal it is for SWC? You will need a serious "due diligence" and a financial model for PAL for the next 5 years.
PAL has not many years to survive without a partner SWC or else...
Thank you for your support my fellow US citizen. This Internet forum never cease to amaze me!...
Another generation of cyberchildren like that and we will be acting like sadistic irresponsible cave men with no sense of right and wrong anymore.
Like Albert Einstein said ""Two things are infinite: the universe and human stupidity; and I'm not sure about the universe."
I made a choice of becoming US citizen and will not renounce for the purpose of simplifying my US Tax...
Which is less than some other Countries in Europe by the way. It is always funny to hear people complaining in US about TAX and price of gasoline...
As for news...If you read the last financing with BAM, Phil du toit said that he will release the guidance in December and I think he talked about before Christmas of course then it is not a rumor it is official...
I just hope PAL will release also the next financing around 20M to 30M...The cash from BAM may be enough for January so with a stretch and depending on the production for Q4.
If PAL can raise receivable in time it will be able to tap on the 24M remaining in the credit facility but I do not think they can before March 2013 imho.
Just to remind all how close to BK PAL was lately!!!
Serious situation here but I see no risk of immediate BK at all NOW...Just trade PAL that will fluctuate between a range very wide range of 0,30 to 0,70. You will be as happy as I have been lately...
Do not amplify a situation here, it is already serious enough and long do not need to get catastrophic Nostradamusian future events. It will not change a 1/100 cent in the pps anyway.
Europe is NO exception as you know mon capitaine...History repeat itself at an accelerated pace.
One of my friend is the direct descendant of Red Cloud...I am sure he will not agree with you on USA is" fine with its history.". It is all in the eyes of the beholder. True since the first humans invaded Europe and wiped out the Neanderthal race because they basically could.
What I can say is that USA is a young Country with a limited history which reduces "hiccups" to a minimum.
That said I learned to love this Country and became #$%$ citizen almost 20 years ago along with other citizenships.
By the way, although I do not live in US but own properties there only, I am required to declare ALL my income etc etc...that I own Worldwide which is "cumbersome" using an euphemism. Few Countries that I know are so exigent in that matter and complicate extremely my tax time which start around now...
Monday will be another day...I feel a bit deceived and abused by PAL...but I cannot complain because I knew that I cannot trust much the system and every time I have "invested" longer than few weeks I lost money.
One year of trading PAL is gone now in smoke with this last 2 weeks and I estimate that I have been lucky to break even. A months ago I was up a great deal...I still have 3 tremendous years before so.
This is the reason why I pull out from PFE and GE few months ago with a almost 50% profit even if I will have to pay some terrible gain on this. I do not trust the market in general...The more you wait and invest in a company the more likely you are to lose...
PAL with BAM is toast sorry to say. It has to re-invent itself somehow in finding more ore to produce but it is not so simple and without cash....
It will be a good time to a buy out before financing at a cost of another 50 60 or 80M shares for few dozen millions who will not last 2 Quarters. Hope Phil du Toit is not dumb enough to think he will be able to solve BAM alone.
" I am tired of talk that comes to nothing. It makes my heart sick when I remember all the good words and all the broken promises."
Chief Joseph - Nez perces tribe. He was called the "red Napoleon" but I think they were referring to his brother Alikut who died in battle?
I follow for days his great escape for 1600 miles until he surrendered from Oregon/Idaho to Yellow Stone and up...Sad time for USA!
It is already 1 pm here and I am struggling with all my trades on Friday...Frequent trading is really difficult accounting wise! My Saturday is going just for that and it is pretty boring.
With the last news regarding BAM I was both relieved and horrified with the deal. Now 169.7M dollars at 19% + 1,5% it is unsustainable as Dorianpc said unfortunately.
BAM is maintaining the mine on life support to milk them as long as they can and perhaps until 2017.
By then the reserve will be gone and PAL will go BK but at this pace it will be all gravy for BAM who will get more than 169M in interest alone. I start to wonder the legality of these type of loan?
When I saw this disaster and look at the impact in financial model till 2017 I could not be Long anymore as you did. Numbers do not lie...
I still see good opportunities for trading short term and day trading the pps between perhaps 0,35 to 0,65, assuming no more hiccups which will put PAL directly in BK and assuming a 20/30M financing done but I am very very cautious because no financing has been released and guidance 2014 and up is still hypothetical.
Why are you still against a buy out for PAL? Is there any other choice?
God Jul min vän
Then Revenue for 2014 will be around 160M or 130M with cash cost at 365. This number have to be confirmed and will be the high range of what many expect.
Then PAL is still heading for a theoretical 250Koz at 300 dollars cash cost until 2017. Even if the mine can produce till 2018 it is prudent to take a year less due to the debt.
Lets assume 750 palladium from 2015 to 2017 average and 300 cash cost also. What will we have?
2014 - 160M revenue and BEST a break even assuming at least 725 palladium or 130M with cash cost.
2015 - 235M revenue or 188M with 300 cash cost X 3 assuming 2015-2017 same.(best case scenario)
Total revenue until 2017 will be 865M dollars.
Total revenue palladium until 2017 will be 930koz x 750 or 695M dollars
1 - cash cost average from 2014 to 2017 *around 315* or 930x315 or 293M
2 - General and administration around 10/Y or total 40M
3 - Interest 42M/Y or total 168M *assuming no change in % until 2017*
4 - Capex 30M/Y or total 120M *which can be curtailed down if necessary*
SUCCINCT MODEL FOR 2017
695M - 293M - 40M - 168M - 120M = 74M
As you can see the debt to be paid in September 2017 the latest is 212.7M and PAL can have only 74M...Only with 0 capex it is barely possible!
As you can see the new increase debt has been a killer. PAL could not afford any hiccups after the first BAM loan. This is the reason why I decided to liquidate my long position and yes at break even with day trading and my previous profit made with PAL during 2014.
A buy-out before BK will be the best solution for shareholders...
I would appreciate any intelligent comment regarding my succinct model and I would be willing to correct if any error. Thank you in advance
Your TA is possible although it is very very early...But you forgot one essential here is that PAL is not behaving as a TA stock now. Fundamental make the pps unsuitable for a TA analysis that can logically lead to conclude anything...
PAL is in a very serious cash squeeze as we speak and got some relief from BAM with a totally scary deal that push the debt to 169M running now at 19% plus 1.5% *closing fees in 2017* or 20.5%. This is a fact and I am not misleading anyone here. Furthermore, the company has stated that it will not an immediate additional financing that cannot be monetized under any loan due to BAM then it will be an equity offering that will eventually be around 20M to 30M based on 0.37 to 0.49 we can assume that the close of Friday is what will be the change...At 0.44 it will be around 50M to 75M shares added to Outstanding or close to 260M shares. And this is the OPTIMISTIC side of the story! As of today, PAL did not indicate any equity financing and we do not know if it will be able to do that yet?
I think PAL will be able to finance the way I said above and avoid BK. The move last week are probably telling us that a deal have been inked and will be released next week.
Assuming this situation PAL will have a debt load of 169.7M at 20.5% but also 43M at 6.15% and credit line used at 36M at maybe 6% *do not know the % here* and 17M in lease...Total debt is now 265.7M with an yearly interest payment of around 42M. 212.7M will have to be paid before end of 2017 or re conducted somehow.
What do we have on the other end to make it work? Let's be optimistic again here...
2014 guidance will be at 190Koz...assuming what Gallagher said at the CC?
But it will be prudent to take 180Koz so at 720 palladium and 365 cash cost. If you model with the 42.1M for interest now and 30M in capex for 2014 we will be at -17M or - 0.06 at 260M shares. The cost of % jumped from 25M to 42M!!! and capex from 10M to 30M!!!. Unless capex comes back to 10M then we have 0.
"Moreover, we believe that Stillwater could still take control of its struggling Canadian peer North American Palladium (PAL) for comparatively little money and forge a unique palladium-focused investment vehicle."
This is the only way now to unlock PAL potential...the sooner the better for shareholders here.
Look at the schedule 16.13 I do not think much has really changed since then...All these proven reserves etc etc....Are not really reliable. What is, is the production estimated until 2018 for the Phase I which is the shaft.
From 2014 to 2014 we have an average of 3700 TPD grosso modo at 4.2 gr/t
PAL has also the low grade at 0.97g/t the 12M tonnes...
Now, it is not including what you can see with the lateral Roby and Offset shallow...and the bulk mining may increase production?
As you can see PAL is not giving what we need to really evaluate production until 2017 2018...
I am tired to make conjectures and I need 2 basics things...to turn bullish again despite the level of debt that now seems unsustainable sorry to say.
1 - FINANCING that will keep PAL afloat until it will be cash positive
2 - A real GUIDANCE for 2014 and also a REAL plan for the next 4 years.
I am now trading and day trading PAL only until the Company decide to address these CRUCIAL ISSUES
Have a good week end...it is late here
They repeat exactly what they have said in the technical report on Feb 19..2018 is also a production year but much in decline.
for the ones who want to read it go to the page 200 table 16.13
North American Palladium Lt
Technical Report Lac des Iles
Mine, Ontario, Incorporating
Prefeasibility Study Offset Zone Phase I
Table 16.13 Yearly Build-up to Full Production
Year 2013 2014 2015 2016 2017 2018 Total
Offset Zone, Phase I (t/d) 3,300 4,000 3900 3,452 3,452 3,112 -
Total Phase I ('000 t/a) 1,208 1,447,1,430 1,260 1,260 1,136 7,741
Full Production (%) 96 100 100 100 100 90 -
Palladium (g/t) 4.62 4.24 4.33 4.29 4.29 4.00 4.30
Platinum (g/t) 0.29 0.29 0.31 0.31 0.31 0.35 0.30
Gold (g/t) 0.28 0.28 0.31 0.33 0.33 0.24 0.30
Copper (%)0.08 0.08 0.09 0.10 0.10 0.03 0.08
Nickel (%) 0.11 0.11 0.11 .12 0.12 0.09
We know already that they are behind schedule for 2013...as you can see they indicated 3,300 TPD.
But these reserve and production are from Phase I and do not include Roby and Offset lateral...
This is on paper...The real reserves have been unlocked with the shaft and extend until 2018, go read the technical presentation on February 19th. They even lower that because they probably intend a bulk mining and increase production...
You will see around 16.5 that there is an estimate regarding production from the shaft until 2018. At the CC they also talk about these 5 years...Now what is important is what the lateral Roby and Offset can bring to the plate to compensate Phase II...
You make a point regarding the potential but PAL has not the cash to get this potential...Only through a partnership or buy out PAL will be able to do that.
I really would like you to tell me what you think of the PAL future with or without partnership.
BAM debt is really really HUGE and now at 169M running at 19% plus 1.5%...yes 20.5%...Until the next financing is released and guidance for 2014 and after is better set I cannot be very optimistic now sorry.
How much do you want to bet that you are the liar? are you willing to bet 5,000 dollars that I am not lying?
It is very simple Phil and it will end this harassment for good. But I know you are a coward and you will never do anything of that sort.
What a life you must have my poor friend harassing others on internet forum just for this sadistic pleasure
to be anonymous. I am pretty sure you are a well behaved person in the real World where your acts have real consequences.
Good luck my poor friend
No chance of delisting or reverse split...Go look at the NYSE MKT requirements. You are mixing apple and oranges to make it worse Lottapgm. With your could we can put NY in a beer bottle....
Yes, PAL is in very serious financial situation but it will finance with equity and the outstandings will be around 260M shares...The pps may take a small dive to 0.35 but mid term it will be a BUY accumulate again. I am just waiting for PAL to release the fiancings news and guidance 2014 to have a real picture of the situation. Without it is not wise to invest in PAL but to day trade or HOLD for longs who cannot trade.
Will be busy today with several trading stocks and will not be able to post much...Another nice trade with HNR out at 4.05 and already sold out at 0.437 to 0.4385 with PAL waiting for the next weakness...
Bought end of day IAG at 3.42 and already I am out waiting for 3.40 or lower...
I wonder if Dorianpc got his 0.4011 but I got my 0.4025...
Until PAL will decide to release news this pattern is here to stay unfortunately for Longs....Waiting for news next week?
Same to you Nomcondo...
I wish all shareholders here some good luck with PAL for a change.
In my opinion PAL should be about to deliver some news within a week or so? I believe financing and guidance 2014 will be announced at the same time because they will have some probable opposite effects.
What I think is that PAL will have an equity financing of about 60M shares which will give PAL between 20M to 30M in cash assuming a pps average at 0.38 to 0.49. If 0.43 average the 60M shares give 25M cash about.
Now, guidance 2014 should be positive because it will be around 30% to 40% increase from Y2Y or about 180Koz to 200Koz with a cash cost probably under 350 dollars.
How the street will react it is very difficult to predict and you can see that the pps is fluctuating already now widely.
With the last jump I have completed my long holding selling and I have no more holding in PAL right now beside 10k shares at 0.4236.
I have managed to break even money wise finally with this new cycle, in extremis, and may end up with a slight positive if PAL fluctuate until end of December?
I do not see any reason why I can stay long PAL right now and will accumulate again only when the fundamental picture will be clearer even if I will have to add at higher pps.
No matter what if these 2 events are completed and specially the last financing then it will be possible to invest in PAL betting for better days and assuming that PAL will be able to stay on schedule. Long time of recovery ahead but PAL will survive...
Then lets wait and meanwhile have some day trading...