PDI - Predictive Discovery

[Sean K]

Buying this with an MC under $300m is gold if you believe in the gold story and they get a mining permit.

Next MRE not till Sep so if NE Bankan keeps going at depth and they continue adding ounces elsewhere it should be considerably re-rated by then. Still has the coup and monkey risk of course, but if you look past that...

Should be more consistent drilling results out as they've sacked their last contractor and brought on a new team.

From the 27 Apr ann:

 

[Sean K]

I'm not sure if Mr Market understands what the extension and infill drilling at Bankan is going to provide at the next MRE in Q3. The initial MRE certainly surprised to the upside due to the grade and continuity of mineralisation at depth in NE Bankan and those results have just kept coming outside the MRE. Next result will start with a 4 in front of it and could be on the way to a 5. Will almost certainly be the second biggest mine in Guinea after Siguiri. Sprott are plucking somewhere between 5-6Moz. That will certainly put them on the map.

Looks like a smart appointment in the Country Manager role. Should have some insiders in the government who will readily accept some additional Aldi bags for a mining license.

 

[Sean K]

Mining the market. Didn't see this coming until next quarter.

In The Fin.

 

[Sean K]

Sprott are saying that this is growing at about 5K ounces per vertical meter below the initial MRE. So, on this 113 hole that goes 370m below that's about 1.85Moz Au on top of the 3.65Moz = 5.5Moz.

However, it's still not closed off at depth, so might be a few more hundred meters of mineralisation. Just a matter of grades to know if it goes underground mining. Looks like it should.

 

[Sean K]

PDI holding up at the placement price which is good considering POG downward momentum. MRE upgrade can't be too far away. MC still around the $300m mark with a potential 5-6Moz deposit which has good met and pretty consistent mineralisation. Still has the national park issue to resolve at some stage, but this is Africa. I still don't think the market understands what this MRE upgrade is going to deliver.

 

[Sean K]

Nothing new in the quarterly that I can see.

Resource upgrade due 'early August', and looking forward to that. Most who follow it will be counting on 5K oz extra per vertical meter over the initial MRE and I think all the drilling is probably been done that will be included in the upgrade. Although they do indicate planned DD holes 200m below the last deepest hole, so will see.

 

[Sean K]

Update from Sprott. Those rough comparisons to other similar project valuations at the bottom make this look pretty cheap. $350m v $3.7-4.7b... That would make this a 10 bagger from here, less dilution from capex.

 

[Sean K]

MRE update out and it doesn't include all the drilling I thought would be included, unfortunately.

It's not really clear but I think this only goes about 50m deeper under the initial MRE which is way short of the 370m I had in the calculation of total ounces. I was going off the companies (and Sprotts) pluck of 5K per VM as well, and I'm not even sure that is the case here. So, disappointing they haven't somehow incorporated the last few drill results. Maybe next time.

Also, no upgrade from any of the inferred to indicated which is odd. I thought they'd done quite a bit of infill in the top half of the deposit.

I don't think this is going to be very good as my Aug tipping comp pick. Needed a 6 in front of it I think, which was the expectation.

 

[Sean K]

Sprott update on the MRE.

Still projecting 6Moz once the deeper holes are filled in, but I think it will be more once they concentrate on some of the regional hits that indicate there's more to be found.

The $1 a share once into production is supposed to include future dilution, but they're just guessing what that might be I think.

 

[Sean K]

Some great infill results here with a couple extending the resource under the previous MRE as you'd expect. Looks like it will continue down to the lowest hole with some consistency which should lead to the 6m ounce deposit forecast. Maybe it'll just keep going after that.

 

[Sean K]

Sprott seemed to have lowered their target to 40c, but say ‘unc‘. I must have missed the previous change.

 

[Sean K]

Sprott seemed to have lowered their target to 40c, but say ‘unc‘. I must have missed the previous change.

View attachment 147859

Found the reduction in price target. Sprott have adjusted down their POG assumptions which has affected all their prices.

 

[mullokintyre]

PDI hit a 52 week low.
There is a huge disparity between buyers and sellers by a factor of 10, so methinks this will have to fall further.
Will wait until the dust settles.
Mick

 

[Sean K]

PDI hit a 52 week low.
There is a huge disparity between buyers and sellers by a factor of 10, so methinks this will have to fall further.
Will wait until the dust settles.
Mick

Looks untidy short term. MC down to about $250m now with what's going to be 6m OzAu. Upside to come from any nearby discovery and they've had a few pretty good regional hits to follow up. The only doubts I have about this becoming a mine remain the excise from the national park. Maybe that's still scaring punters. I'm using weakness to top up on a couple of these African explorers. eg, ORR MC down around $150m with a very good resource looks oversold now.

 

[mullokintyre]

Which ORR are you more interested in ORR.ASX (Orebody) or ORR.LSE (oriole resources)?
Oriole is big in Africa but according to what I read, its MC is closer to 5 mill Aud.
Orebody the Oz one has mines in Tanzannia, which is really East Africa.
Mick

 

[Sean K]

Which ORR are you more interested in ORR.ASX (Orebody) or ORR.LSE (oriole resources)?
Oriole is big in Africa but according to what I read, its MC is closer to 5 mill Aud.
Orebody the Oz one has mines in Tanzannia, which is really East Africa.
Mick

OreCorp, Tanzania. Has been smashed the past six months, like a number of gold juniors/explorers including PDI. Explorers mostly out of favour due to the global financial situation combined with USD strength.

 

[Sean K]

Some good infill drilling results here with the contractor recommending that the widths go out a bit which indicates it's a pretty consistent deposit. 38m@7g/t is amazing. Not sure how much this is discounted because of the national park issue. Maybe 0.2xNAV ish.

 

[Sean K]

Sprott update on the above announcement. No change really, but reduces risk a little due to the consistency.

A significant catalyst for me would be an excise in the national park for mining and follow up drilling on some of the close regional drill results. As Sprott indicate, the focus seems to be on reducing risk on what they've already got as opposed to blue sky regional success.

Probable 5m ounces with an EV of $250m.... DEG 10m ounces with $2b MC.

 

[Sean K]

This has been pretty volatile due to coups, gold cracking and monkey parks but it's been pretty consistent in going down for the past year. Bought seven parcels on the way down, but miraculously only down 5%. Could have been much worse without averaging in during the market stress. Fingers crossed this channel is broken to the upside. I thought buying under 18c was pretty safe with the placement done around there, but have seen that strategy fail before too. I'm banking on the park excise. I think that news will change the market perception on this considerably. Or, monkeys win and I'm in the toilet.

 

[finicky]

BtL did a video on PDI on Sunday ?