PDI - Predictive Discovery

[Sean K]

Trading halt for the initial MRE to be released, probably before open tomorrow. Good luck to holders. I hope it's well above expectations and there's no buy the rumour sell the facts type thing. Anything at or above that Sprott guestimate above will be very good. The coup and POG languishing sort of put a damper on excitement perhaps.

 

[Sean K]

Well, this is quite incredible. Double what was expected. This MRE was cut off weeks ago as well with additional excellent results announced outside this estimate to add to the project. Looks like this will end up being closer to a 5m oz au + project. Coup or no coup, this is a major gold discovery.

 

[bk1]

It's impressive, and to think there has to be further room to increase that resource base going off the most recent announcements and extension drilling.
Interesting that they use a mine in Mali for comparison, if the AISC for Bankan is anywhere near that then this could really be a gold mine...

 

[Sean K]

It's impressive, and to think there has to be further room to increase that resource base going off the most recent announcements and extension drilling.
Interesting that they use a mine in Mali for comparison, if the AISC for Bankan is anywhere near that then this could really be a gold mine...

I looked up Fekola to see if there was a way to compare value but B2B Gold own a few projects and it's impossible to attribute value to just that one mine. So comparisons are very difficult and you'd have to go back to when Fekola was at the same stage of development to compare $$ per ounce.

I'm not sure if PDI have the expertise to take this through to production. Board and management look like geologists / explorers. Might now be on the radar of someone who can. One of the directors is the Chairman at TIE...

 

[Sean K]

Even though this has jumped there's probably still a coup discount attached to this. MC still just $330m with that resource and more to come. Should get to 5m oz based on extension drilling already announced plus probable discoveries in the region. Has held up well after the excitement. Not much of a trader sell off, yet. Volume coming off which is a big positive. Might end up in a bullish flag/pennant formation.

 

[Sean K]

Now know why they surprised the market. They included the most recent drilling into the MRE when they said they had cut it off some time before. That's a bit shifty.

MD thinks they're going to take this to mining by themselves. Not sure if they have the internal capability to do that.

The way he's talking is that they thing they've got much more than 3.6m oz, but heading towards 10m oz, mainly due to the grade at depth, plus regional potential.

 

[bk1]

I saw this...(is this the Crux Investor video?)

My prime concern is still how to accurately apply an Africa risk value to this.
He is correct, if this was discovered in WA the share price would be materially different
Even at say, 5 Moz after further drilling, how much sp increase can we forsee.

 

[Sean K]

I saw this...(is this the Crux Investor video?)

My prime concern is still how to accurately apply an Africa risk value to this.
He is correct, if this was discovered in WA the share price would be materially different
Even at say, 5 Moz after further drilling, how much sp increase can we forsee.

Yes, Crux. Matt is the best host of the all the you tubers doing small caps interviews. He normally gives them a pretty hard time and is not just there to promote them.

PDI current MC is around $330m with potentially 5m oz at next MRE upgrade (first half next year) with no additional CRs to get there should see them at a much higher MC. Much depends on general market, POG and future coups. It's a guestimate to say how much of a discount. I'd pluck 25% discount for WeAf and 25% for the coup. So, if this was in WA should be on a current MC of about $500m. With $5m oz, give them half the MC of DEG which is currently $1.5b...

 

[Sean K]

TH because of a media report? Done a google but can't find anything yet. I assume it's negative and about the coup and effect on operations. You wouldn't put a halt in because of the positive MRE.

 

[qldfrog]

missed my exit by a day..will be costly

 

[Sean K]

Ann out. Media report questioning legality of mining on their lease. I wonder how they even got authorisation to drill if it was not going to be legal to mine? Makes me think that they will eventually be OK. Maybe.

Their key deposits are in Buffer Zone 2 which is a 'multiple use' area. They were cleared for exploration activities in their area, but will they be granted a mining permit that will be much more disruptive? Maybe not, as they state in their ann: 'Buffer Zone 2 of the Upper Niger National Park is a protected area where the mining of mineral deposits is not permitted.'

This throws a spanner in the works. How was this not made public by the company prior to this?

 

[bk1]

After all that has recently happened in that country, how is this even a news story?
This is Africa. Rule of law is a novelty in these parts.
More to the point who or what is the media outlet behind this?

 

[Sean K]

More to the point who or what is the media outlet behind this?

Yes, I wondered that. Why would someone dig that deep to find this out and make it news? hmmm

 

[bk1]

Down about 20% as we speak.
Guess i'm getting a crash course in West Africa mining risk premiums...

 

[Sean K]

Down about 20% as we speak.
Guess i'm getting a crash course in West Africa mining risk premiums...

I think they still might be able to mine if they provide the right amount of compensation... I think this is too valuable to the local community and to the central gov.

The only people who would dig into this would be a green/conservation activist group I reckon.

I was spewin I didn't have the courage to buy after the coup when it went to 10c. This might be another time I will regret not having the courage. Might be worth taking a longer gamble. I'm about to flip a coin...

 

[bk1]

I bought again after the coup, but at 11/12 c. I'm pretty sure Sprotts still had a PT of 40 cents that i saw on one of their analysis, and that was published after the coup.

 

[Sean K]

PDI smashed after the revelation they currently can't mine their deposit, but a lot of punters are backing them in to get the authority at some stage. Now significantly discounted due to that risk, on top of the coup, and on top of being in WeAf. If they get something positive back from the new government (whenever that is) on future development then the value (guess how much - 80%?) can get added to their price.

Very good drill results out extending the Creek. I think they'll have to redo the pit shell to include these hits and if it's getting too deep it'll turn into an UG effort. Going to add substantially to the next MRE if they keep going like this.

Too valuable to the locals and the country for this not to turn into a mine at some stage, imo. Might just cost them some extra large Aldi bags.

 

[bk1]

And now global investment manager Van Eck decides to become a substantial holder.
Proof of ownership confirmed?

 

[Sean K]

And now global investment manager Van Eck decides to become a substantial holder.
Proof of ownership confirmed?

I think any of the institutions with a lot of skin in this are just banking on mining being approved. In a couple of years time I think most will look back at these big hits (coup, national park) and rue the missed opportunity. Current mc $250m for 3.6m OzAu but will easily go over 5m from surface. TIE have 3.35m Oz and will be digging up over 200k oz pa. I think PDI will be aiming for at least 250k oz pa for 10+ years. Will be one of the biggest producers in WeAf. Just gotta hand out those Aldi bags.

 

[Sean K]

And, here's the news article.

Not much we don't know here except we now know how incompetent the government of Guinea is. The Environment Minister claiming that he didn't know about the exploration licence granted by the Mining Ministry. Morons.

And, as expected, it was a greenie group / newspaper that dug this up. All good to them to try and protect the chimps though. We must ensure these animals survive.

But, does this stop a mine going ahead when billions are at stake? History seems to show that with enough compensation even 'sacred' land can be mined with the right royalty stream.

As an interesting aside, PDI just recently announced a director had resigned and there's been a shuffle of management. Related? The director who resigned is the Chair of TIE, Mr Francis Harper. Francis also financed WAF and was also Chair for a time. He seems to be a WeAF expert. Was it he who was in charge of overseeing the exploration/mining licence? The reason for his resignation was to spend more time on TIE, but perhaps he was asked to resign and fell on his sword? Curious timing, at least.