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North American Palladium Ltd. Message Board

bigsee4c 222 posts  |  Last Activity: 2 hours 26 minutes ago Member since: Sep 6, 2011
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  • Reply to

    What $855 Pd hedge?

    by bigsee4c 9 hours ago
    bigsee4c bigsee4c 2 hours 26 minutes ago Flag

    "...this forum should at least be honest. It would be nice to have an honest open discussion about PAL's future. If you ever would want to talk about the good and bad points of PAL I would love to engage in a conversation. "

    If this were the case, why would you characterize attempts to explain what appeared to me (and others) to be double counting by-product revenues (AISC thread) as "flim flam"? Why question whether I was posing as a "Canadian hedge fund" because I posted that my calculations show PAL as being close to the end of it's cash rope. After taking the time to try to set the by-products miscommunications straight, and provide Q3 cash numbers as back up my very low cash opinion, you posted no response to either discussion point. That doesn't strike me as very open or engaging conversation. Your post generally have not appear to encourage honesty, from my viewpoint.

  • Reply to

    why up 7% today?

    by finanza 8 hours ago

    The Fed did sound pretty optimistic.

    Most of mine was in the green, as well. Though, GLD hasn't been doing so well.

  • Reply to

    why up 7% today?

    by finanza 8 hours ago

    Goldman upgrade SWC to a buy today. Though, the Fed's positive tone is taking a little wind out of it's sail.

  • Reply to

    SWC will benefit by the precious metals Boom!

    by auwindstorm Dec 9, 2014 5:37 PM

    My thought is that a majority of the SWC short position 80-90%+ is likely a hedge on convertible debt. If that's the case, we might not see that portion move much until 2019.

  • I have notice quite a few posters assuming that PAL will be receiving $855 for Pd produced in Q4. I believe this is not an accurate assumption. The $855 hedge mentioned in the CC refers to ounces in concentrate that were shipped in Q3, which PAL receives payment for (already accounted for in Q3 reports). I read nothing which suggests it has anything to do with Q4 production.

    It is standard practice for PAL to hedge concentrate, so they do not have to continually back-adjust their reports to account for the pricing changes of ounces in inventory. It is not a standard practice for PAL to hedge, or to pre-sell anticipated Pd production futures. The Q4 running rate for Pd price is about $785.

    From Q3 transcript:
    "David C. Peck - Vice President of Exploration
    Well, we've hedged in the fourth quarter. So everything that gets delivered into Q4 we're average priced in on all of those palladium ounces. It's USD 855, so close to CAD 950. So for the fourth quarter, we completely covered the exposure there.

    Andrew Mikitchook - Edgecrest Capital Corporation, Research Division
    Okay. So to be specific, that's effectively the ounces in concentrate that you shipped in Q3 that you will get paid for in Q4. You've locked those essentially Q3 prices in for those ounces, right?

    "David C. Peck - Vice President of Exploration
    Well, for the ounces, we will get received cash for. In the month of October, November, December, we have hedged those ounces at USD 855.

    Andrew Mikitchook - Okay. And those are ounces that were produced in Q3, effectively?

    David Peck- "Q3 in the latter part of Q2 as well. We basically have 5 months of platinum and palladium material in inventory than any particular month-end.

    Andrew Mikitchook- Okay. So there won't be any backwards-looking adjustments for Q3 or something in the future or something like that?

    David C. Peck - Not on the platinum and palladium for that quarterly period. Obviously, we do have exposure to the remaining byproducts ..."

  • Reply to

    When "engaged" means HIRED?

    by on_kelp_9 Dec 15, 2014 10:14 PM
    bigsee4c bigsee4c Dec 16, 2014 8:21 PM Flag

    Thank you for your point goddessgurl706. I looked at the portion of the transcript which refers to US$855. To be clear they did not "purchase futures" near the top. They appear to have forwardly hedged the amount of concentrate "in process", so as not to have to backwardly adjust downward Q3 sales. This is standard for PAL. If anyone has reason to believe that they sold forward production futures at $855, please post your reasoning. This would be very new for PAL.

    "David C. Peck - Vice President of Exploration
    Well, for the ounces, we will get received cash for. In the month of October, November, December, we have hedged those ounces at USD 855.

    Andrew Mikitchook - Edgecrest Capital Corporation, Research Division
    Okay. And those are ounces that were produced in Q3, effectively?

    David Peck- "Q3 in the latter part of Q2 as well. We basically have 5 months of platinum and palladium material in inventory than any particular month-end.

    Andrew Mikitchook- Okay. So there won't be any backwards-looking adjustments for Q3 or something in the future or something like that?

    David C. Peck - Not on the platinum and palladium for that quarterly period. Obviously, we do have exposure to the remaining byproducts, which represent about 30%, 25% to 30% of our revenue stream."

  • Reply to

    When "engaged" means HIRED?

    by on_kelp_9 Dec 15, 2014 10:14 PM
    bigsee4c bigsee4c Dec 16, 2014 6:22 PM Flag

    "I think people forget all of Q4 sales will get US$855/oz"

    How do you figure? $855 sounds like Q3 numbers. I'm seeing a Q4 Pd running price of $785.

    "Cash is king and in 2014 PAL has been burning it! If they are running like they can long term, they are in trouble."

    If by "long term" you mean in the next 60 days, I would agree.

    NAP might not be in trouble and may go on to do some interesting things in 2015. They have gotten out of near insolvent financial predicaments in the past, borrowing more rope to tie onto the end.

    PAL shareholders, on the other hand, will likely pay steeply for this every increasing price of rope.

  • Reply to

    Operating Margin

    by geofyte Dec 16, 2014 3:39 PM
    bigsee4c bigsee4c Dec 16, 2014 5:04 PM Flag

    "Seriously", it doesn't take a hedge fund to be able to read a financial report and know that NAP is in a desperate cash position.

    NAPs Q3 reports indicate a cash balance of $11.8M at the end of Sept. (see p.15). NAP's cash burn rate has been between $7M and $11M per month, for years, and was higher in Q3 2014, than Q3 2013, since they are now paying BAM interest. Q4's PGM price drop isn't helping matters. So, they must have been able to open up some of the revolving credit funds, or they would have been out of cash last month already.

  • Reply to

    When "engaged" means HIRED?

    by on_kelp_9 Dec 15, 2014 10:14 PM
    bigsee4c bigsee4c Dec 16, 2014 4:34 PM Flag

    " Probably they would not have spent interview time mentioning fruitless past talks."

    I think that's a very valid point on_kelp (and skittle). What's more, if "it is NAP management's devious attempt to hide meaning", that could set them up for some lawsuits, perhaps even criminal.

    What I don't understand is why this question of whether they have already hired or haven't yet hired Cementation (to do some job) is such the big point of contention. Let's say there is a verbal agreement of some sort. Isn't how they could possibly fund a new project be far more important of a discussion point? We are taking about a potentially sizable cap-ex bill on a company that has virtually no cash and a negative cash flow. Somethings gotta give.

  • Reply to

    Operating Margin

    by geofyte Dec 16, 2014 3:39 PM
    bigsee4c bigsee4c Dec 16, 2014 3:55 PM Flag

    I agree with your stockpiling arguement. However, at some point asking whether or not PAL may have a $271 operating margin itself may be meaningless to a decision on whether to go long now or not. If PAL is out of cash, which it sure appears to close from my calculations, why would anyone commit capital prior to the financing issue being resolved. When has financing ever been a positive to PAL PPS.

    There may be some opportunities after that. But if you hear that financing train coming, as I do, ask whether you really want to jump on the tracks to stare at the shiny white light at the end of the tunnel.

  • Reply to

    AISC

    by nettlesm24 Dec 16, 2014 9:31 AM
    bigsee4c bigsee4c Dec 16, 2014 3:40 PM Flag

    Perhaps, I misunderstand you. If so, let's clear it up. "Time to set this right!", as you say. One of us appears to be misunderstanding the by-product revenue accounting.

    If you "do understand" that by-product "revenues" (not just costs) are subtracted from cash costs, then why state, "People on this site keep forgetting to mention or just plain ignore that Lac de Iles gets 25% of its revenue stream from secondary minerals much higher than stated and is the reason why AISC is so low."? How is AISC so low? Even if it were $856, rather than $976, who would call that low? It's still a loss at Q4 PGM prices.

    Are you meaning to say that by-product accounting "… is the reason why "cash costs" ($375) are so low"? If that's what you are saying, then I would agree that is why cash costs appear low. However, if that's the case, I seem to be missing the point you are making about "just plain ignore that Lac de Iles gets 25% of its revenue stream from secondary minerals…" given that the by-product "revenue" is already accounted for in the cash cost and so is not ignored. As geofyte pointed out, as have I, on several occasions, you can't double count these revenues.

    I believe that insults and name calling have no place on a message board. If you make your case clearly, there is no need to call anyone a "fool" or "liar" or describe honest points "flim flam". Negative does not mean "hence biased". Sometimes, there is unbiased criticism which needs to be made clear. With PAL, there is good reason why what sounds "negative" comes up more often than with some other companies.

    If an investor wants to make a trade based on what they read on a message board and doesn't know how to separate truth from fiction, then he or she deserve the losses that they get, whether on the long side or short.

  • Reply to

    AISC

    by nettlesm24 Dec 16, 2014 9:31 AM
    bigsee4c bigsee4c Dec 16, 2014 1:28 PM Flag

    There is not a snowballs chance that positive Q4 results would allow for an external refinancing on shareholder friendly terms. BAM has prohibitively high pre-payment penalties. I'm not even expecting all that positive of Q4 numbers. Costs may be down some, but so are Pd and Pt prices in Q4.

  • Reply to

    AISC

    by nettlesm24 Dec 16, 2014 9:31 AM
    bigsee4c bigsee4c Dec 16, 2014 1:20 PM Flag

    I gotta hand it to you skittle, you do have nerve. It takes some never to call other posters "fools" and "clowns" who "keep forgetting" "or just plain ignore that Lac de Iles gets 25% of its revenue stream from secondary minerals much higher than stated and is the reason why AISC is so low."

    So, do you "keep forgetting" or "just plain ignore" the past posts which have plainly stated that by-product revenue already accounted for / subtracted from operations costs? You can't subtract it out twice. Cash cost would have been significantly higher than $375 in Oct/Nov had by-product revenues not been subtracted from the figure.

    I don't mind if someone doesn't quite get this, even though I and others have posted this many times. It is a misleading way that the company chooses to report costs. I do take issue with belligerence and insults, when you don't take the time to understand what you are saying.

    Messages on this board are not the reason why PAL is hovering in the $0.12-$0.14 range. No one in there right mind would argue that PAL's AISC is currently low. They might say "better days tomorrow" or "Pd will surge and save the day", but not that total cost are low. Is it too painful to accept that there might be bono fide reasons for this pathetic PPS. Why shoot (or insult) the messengers.

  • Reply to

    Northern Ontario News re PAL

    by bellbell63 Nov 21, 2014 3:07 PM
    bigsee4c bigsee4c Dec 16, 2014 2:18 AM Flag

    On_Kelp_9
    "...and pandering to Bigsee4C?"

    First, when has Bell "pandered" to anyone? Secondly, pandering to what?? What do you suspect/project my agenda to be?

    Are you really still being a cheerleader for PAL? Legitimately? Do you honestly believe NAP will get through the next 60 days without major dilutive financing required?

    If you are sincere about your PAL enthusiasm, maybe you would like a similar sort a wager as I had with Bell in the Spring on Pd prices. Something like, If PAL gets through the next 60 days without a majorly disruptive and/or shareholder equity damaging financing, then I will post (both on this board and on PALs, that you were right and I was wrong), otherwise you need to do the same. Willing to call on that bet?

  • From PAL thread "New Sanctions" begun by nomcondo, yesterday, in which all 6 replies have been deleted.

    the_truth_4 said:
    "Look at the last two fiascos: Marathon and the Cu mine. Just shows you that 'they' don't have a clue about the industry they are in. Now they shed some people (which should have happened years ago) …"

    You have to know that "they" are not the same 'they'. SWC is not the same SWC. Their board was taken over 18 months ago, and the management was replaced. Large impairment were taken of Peregrine and Marathon. The board has clearly stated two missions, one to reduce expenses, the other not to get involved in any non-core acquisitions (i.e. the Cu fiasco). Marathon might still be a go at some point, provided that metals prices make it clearly economically advantageous. Until it meet a their threshold, though, it's on the back burn and resource redeployed. And this isn't because they need to conserve cash, they are sitting on a mountain of cash, which they have stated they hope to return to shareholders in the "middle term".

    Regarding how expensive it is to mine there, I would gladly take SWC's all-in costs over PAL's any day of the week. Even looking at operating cost, it's comparing apples and oranges, as PAL deducts by-product revenue from operations expenses to give a misleadingly low operations cost.

    I don't know how much will come of plans for a horizontal drift into the JM reef or Beartooth exploration, but it is obvious that expense and IRR are forefront in decisions from the new management, which is refreshing.

    "I haven't looked under the dress there for while."

    I might be worth another peek under that skirt, you may be surprised at what you find.

    It seems clearer by the day that both PAL and the PAL board may both be best left to others.

  • Reply to

    Lots of new negative posters on this board.

    by skittle12345 Dec 15, 2014 4:28 PM
    bigsee4c bigsee4c Dec 16, 2014 1:43 AM Flag

    I posted this earlier but I for some reason it didn't take. So, will try once more.

    Yes, at least one poster abuse screen-names frequently. Palsucksbucks has had at least a dozen screenmames over the years, and often uses them to "converse" with itself and, thus bump his on threads up. He will also take another valid screen-name and change one letter to try to confuse matters more. It's troll behavior. There used to be a way to look up screen-names by ISP, but that was a while ago.

    Having said that, obviously it doesn't help when skittle lumps anyone and everyone who might have a valid criticism about PAL into this category.

    I do not post under more than this screen name, as I assume you (geofyte) and Bellbell also do not. BigBlue / FunTrader no longer posts on Yahoo boards at all anymore, he hasn't for nearly a year. I can understand why.

  • Reply to

    Can PAL deliver for investors?

    by liamoshaunnesy Dec 15, 2014 12:15 PM
    bigsee4c bigsee4c Dec 15, 2014 3:25 PM Flag

    Geofyte, you are replying to a spam-bot. There is no franklin or liamo.

  • Reply to

    New sanctions

    by nomcondo Dec 14, 2014 4:58 AM
    bigsee4c bigsee4c Dec 15, 2014 3:11 PM Flag

    TheTruth,
    Sure, I'd do some profit taking SWC above $20, assuming PGM prices participate.

    "Look at the last two fiascos: Marathon and the Cu mine. Just shows you that 'they' don't have a clue about the industry they are in. Now they shed some people (which should have happened years ago) …"

    You must know that "they" are not the same 'they'. SWC is not the same SWC. Their board was taken over 18 months ago, and the management was replaced. Large impairment were taken of Peregrine and Marathon. The board has clearly stated two missions, one to reduce expenses, the other not to get involved in any non-core acquisitions (like the Cu fiasco).

    Marathon might still be a go someday, provided that metals prices make it clearly economically advantageous. Until it meets their threshold, though, it's on the back burner, with resource redeployed. This isn't because they need to conserve cash, they are sitting on a small mountain of cash, which they have stated they hope to return to shareholders in the "middle term".

    Regarding how expensive it is to mine there, I would gladly take SWC's all-in costs over PAL's, any day of the week. Even looking at operating cost, it's comparing apples and oranges, as PAL deducts by-product revenue from operations expenses to give a misleadingly low operations cost. And cash flow? Obviously, no comparisons need to be stated there.

    I don't know how much will come of plans for a horizontal drift into the JM reef, or from Beartooth exploration. What is clear is that expense and IRR are key to all decisions from the new management, which is refreshing.

    "I haven't looked under the dress there for while."

    I might be worth another peek under that skirt, you may be surprised at what you find.

  • Reply to

    New sanctions

    by nomcondo Dec 14, 2014 4:58 AM
    bigsee4c bigsee4c Dec 14, 2014 6:56 PM Flag

    I was about to agree with you. But then you posted that SWC is already over priced. I guess that opinion must depend on where you see Pd prices next year. IMO, SWC is very much underpriced, and if Pd were to head back toward $900, SWC's efficiency improvements could easily get them into the $20's in 2015.

    Russia is always interesting to keep an eye on. Depending on the dynamics there, it could make for some favorable Pd weather.

    Re. Nomcondo's statement, "If the company does not have to raise more funds . . ."

    I assume that most people who pay close attention to PAL's cash flow already figure that the likelihood of PAL not needing more financing (and very soon) is similar to the odds to picking winning Powerball numbers.

    Russia and PD are no longer good enough reasons to risk more investment into PAL, unless or until the financing situation is settled.

  • Reply to

    Pd grades

    by bellbell63 Dec 11, 2014 4:18 PM
    bigsee4c bigsee4c Dec 11, 2014 9:04 PM Flag

    Thank you ... I think?

    I hope you can understand that my post was not to "protect" anyone. Bell does a fine enough job defending himself (or ignoring disagreement), without my need to chime in.

    My biggest issue on this board has been trolls -- people pretending they are different people, when they are not -- and lately, even having conversations with themselves to create further confusion.

    My second biggest issue is when someone tries to discredit (or insult) other posters, for having an alternative viewpoint. I doubt I would even have much issue with "palsucksbucks" if it were only one person posting it's opinions.

    I have on occasion felt that Bell has posted something negatively more often than one needs to post. But that was a subjective thought. I do not doubt the sincerity from whom it comes from. Keep in mind I've been reading PAL posts for 4+ years, and consider myself a pretty good judge of character.

    Fun trading? I have never had such harsh disputes or irritations with any other poster on any board I've participated in, in my life. This was most true when I was negatively characterized as short-sighted or naively reactionary for having divested a majority of my PAL shares between $1 an $1.40. Having said that, I'm not sure, now, what point I could find fault in, in his last SA piece. If you need to dislike me for saying so, that's OK. If you slam me or try to discredit me or try to keep me from posting further, I would suggest that this approach is no better than what I disliked about Fun Trading, in the first place.

    Posters should be allowed to speak their truth, even if it goes against someone else's position. I hope sincerity will speak louder than position loyalty. But if not, I'm willing to chance that. Who really cares at this point.

PAL
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