PDI - Predictive Discovery

[Sean K]

BtL did a video on PDI on Sunday ?

Maybe he could post it up here?

 

[Sean K]

Tapping on the downward resistance line of the chanel. I have zero confidence it'll break through at the moment. Maybe at the mercy of the general market and POG. If it gets through, 24c looks like a challenge.

 

[Sean K]

Sprott update on their last ann that I didn't post up because it was boring.

No change on PT, and seem to be more banking on exploration success for more significant upside. They really need to follow up some of those significant hits close to NEB.

Major catalyst for this IMO will be some sort of positive news about an excise from the NP. Would remove a massive chunk of risk.

Just breaking up out of that sort off chanel identified previously.

 

[bk1]

Just breaking up out of that sort off chanel identified previously.

The scent of gold, @Sean K ??

 

[Sean K]

The scent of gold, @Sean K ??

Yes, and this has done similar to most gold stocks I suppose since the Oct/Nov bottom. ? it was a bottom.

 

[Sean K]

My riskiest holding due to the perceived geopolitical risk of the monkey park but I think investors overestimate what coups and monkeys do to West African drill plays. This will be a mine and one of the biggest in WAf. If it was in WA it'd be around half of DEGs MC which is $2b. So, should triple from current MC of $300m. It's certainly better than TIE's deposit and they had a $900m MC at one point. Probably a TO target for an experienced WAf developer/miner like a PRU.

 

[rcw1]

My riskiest holding due to the perceived geopolitical risk of the monkey park but I think investors overestimate what coups and monkeys do to West African drill plays. This will be a mine and one of the biggest in WAf. If it was in WA it'd be around half of DEGs MC which is $2b. So, should triple from current MC of $300m. It's certainly better than TIE's deposit and they had a $900m MC at one point. Probably a TO target for an experienced WAf developer/miner like a PRU

Good afternoon,

Burkina Faso:
In 2014 political unrest led by the people resulted in the dissolution of the government in October, of that year. The establishment of a transitional administration later that year finally being succeeded by a democratically elected government, maybe 2016.

A military coup in January 2022 deposed the president, suspended the constitution, and dissolved the National Assembly and the government.


Kind regards
rcw1

​

 

[Sean K]

Good afternoon,

Burkina Faso:
In 2014 political unrest led by the people resulted in the dissolution of the government in October, of that year. The establishment of a transitional administration later that year finally being succeeded by a democratically elected government, maybe 2016.

A military coup in January 2022 deposed the president, suspended the constitution, and dissolved the National Assembly and the government.


Kind regards
rcw1

​

Lucky PDI is in Guinea then.

But, same sort of coup though. One thing everyone needs to understands with WAf coups is that they are a power and money play. The coup leaders are not benevolent dictators, they just want to line their own pockets. They do not know how to mine gold on scale, so they will take their cut and eventually run to Switzerland.

 

[rcw1]

Lucky PDI is in Guinea then.

But, same sort of coup though. One thing everyone needs to understands with WAf coups is that they are a power and money play. The coup leaders are not benevolent dictators, they just want to line their own pockets. They do not know how to mine gold on scale, so they will take their cut and eventually run to Switzerland.

Guinea:
Political turmoil ... last coup on record was in 2021. Today, not sure, but thinking still an interim government backed by the military.


Kind regards
rcw1

 

[Sean K]

Guinea:
Political turmoil ... last coup on record was in 2021. Today, not sure, but thinking still an interim government backed by the military.


Kind regards
rcw1

Yep. The whole of WAf has been under military rule of some kind or another for the past 2000 years. It's now probably the safest jurisdiction for mining companies to go from exploration to production within years, not decades. It's far easier to grease the wheels. Just need some decent security.

 

[rcw1]

Yep. The whole of WAf has been under military rule of some kind or another for the past 2000 years. It's now probably the safest jurisdiction for mining companies to go from exploration to production within years, not decades. It's far easier to grease the wheels. Just need some decent security.

Maybe, the trouble with 'greasing the wheels' is, where does one draw the line in the sand. Might well be good, until the wrong person gets to do the moving and shaking, then will need more than decent security.

Kind regards
rcw1

 

[Sean K]

Interesting this character popped up of the registry recently. That's a whopping holding for an individual. Looks like he needs a secretary too. Don't see a handwritten note like that very often.

 

[Sean K]

MC still low 300s and they should be about to upgrade most of the deposit to indicated, further derisking. Disappointed they haven’t done too much more deeper drilling to increase the resource. Hard to tell how much deeper will be included in the MRE update due imminently.

I‘m surprised the run in POG has hardly affected PDIs SP. Still too risky for most punters I guess.

 

[mullokintyre]

PDI junked 5% today after release of quarterly.The only reason I could see for the price drop was the fact that they have only 1.9 quarters of cash left, so a trip to the capital markets in the offing.
Not much else we did not know of.
mick

 

[Sean K]

PDI junked 5% today after release of quarterly.The only reason I could see for the price drop was the fact that they have only 1.9 quarters of cash left, so a trip to the capital markets in the offing.
Not much else we did not know of.
mick

Yep, CR approaching. They’re only spending about 10% on Admin so that’s well within acceptances. Maybe they will produce the updated MRE and the CR off the back of that.

 

[Sean K]

Sprotts valuation no change on the drilling update. 40c. Longer term still see around $1.

 

[The Triangle]

Yep, CR approaching. They’re only spending about 10% on Admin so that’s well within acceptances. Maybe they will produce the updated MRE and the CR off the back of that.

They've already said a large % of drilling has gone towards shifting inferred to indicated (rather than increasing ounces). Just looking very roughly in FY22: They increased the resource by ~ 0.55 moz to 4.2 moz from an exploration spend of ~$24 million. They've spent about ~$28 million in this current half year - so divide those out and I get about 0.65 moz they might be able to add to the current resource as a complete guess (haven't looked closely at the drill results and made an intelligent guess on the increase in ounces). Round up to 5 moz total on the next update and I get a EV/OZ value of around $65 ~ Which is probably actually fairly valued in my book considering they have not even done a scoping study.

We haven't really seen much M&A activity in Africa lately and I suspect the bigger fish in the market are happily sitting back sipping on lattes waiting for these exploration jrs. to keep burning cash to upgrade resources - essentially calling their bluff (a lot of these juniors are desperate to get bought out and not move into production). Let's say PDI can spend another $50 million this year on drilling and get to 6 moz, maybe 7moz - who is out there that can afford to buy them out and then go spend a half billion on the capex?

I just have this feeling that there are getting to be a lot of decently large looking deposits but not enough people willing to fund them into production.

Sprotts valuation no change on the drilling update. 40c. Longer term still see around $1.

View attachment 152394

Sprott...What isn't a buy with them?

 

[Sean K]

They've already said a large % of drilling has gone towards shifting inferred to indicated (rather than increasing ounces). Just looking very roughly in FY22: They increased the resource by ~ 0.55 moz to 4.2 moz from an exploration spend of ~$24 million. They've spent about ~$28 million in this current half year - so divide those out and I get about 0.65 moz they might be able to add to the current resource as a complete guess (haven't looked closely at the drill results and made an intelligent guess on the increase in ounces). Round up to 5 moz total on the next update and I get a EV/OZ value of around $65 ~ Which is probably actually fairly valued in my book considering they have not even done a scoping study.

We haven't really seen much M&A activity in Africa lately and I suspect the bigger fish in the market are happily sitting back sipping on lattes waiting for these exploration jrs. to keep burning cash to upgrade resources - essentially calling their bluff (a lot of these juniors are desperate to get bought out and not move into production). Let's say PDI can spend another $50 million this year on drilling and get to 6 moz, maybe 7moz - who is out there that can afford to buy them out and then go spend a half billion on the capex?

I just have this feeling that there are getting to be a lot of decently large looking deposits but not enough people willing to fund them into production.

Sprott...What isn't a buy with them?
View attachment 152395

Sprott ~ just what they haven’t funded or own.

 

[Sean K]

In regard to M&A @The Triangle it would be interesting to see a spreadsheet of all exploration and development projects (that the majors would hold) to see what’s most likely. PDI must be up there with the size, consistency and grade of the ore body. Not sure of any others that compare at all. There‘s a lot of waste on the western side of it to remove but digging from the east they’ll be bringing up gold pretty much from surface. Over 250k Oz pa for 15+ years must look good on the surface of it.

 

[The Triangle]

In regard to M&A @The Triangle it would be interesting to see a spreadsheet of all exploration and development projects (that the majors would hold) to see what’s most likely. PDI must be up there with the size, consistency and grade of the ore body. Not sure of any others that compare at all. There‘s a lot of waste on the western side of it to remove but digging from the east they’ll be bringing up gold pretty much from surface. Over 250k Oz pa for 15+ years must look good on the surface of it.

Probably on the Sprott website somewhere! I'm sure there are lots of people interested in PDI - but who knows what price they are willing to pay... Charts below are very interesting and give some historical context to gold acquisitions.

I think there is an interesting paradox here. These juniors want to grow the resource, but if you're growing it at depth then you're also growing the cost per unit. If the cost per unit gets too high, then the big boys probably aren't interested in paying a big premium.

It would take 5 minute to plug some cost estimates into the computer with their ore resource and work out a rudimentary NPV/AISC/Schedule/Production Rates. I'm sure PDI has done this - if the numbers were looking great - they would have pushed out a scoping study by now (in my view). It's hard to visualize the deposit, but sections like this below are a worry. First few years would be great. But after that my feeling is that at some stage the stripping of waste becomes a rather large problem or 'hole' and you need to go underground - which then gets complicated and expensive. That red section has a lot of waste to mine before hitting ore.