Australian (ASX) Stock Market Forum

PEN - Peninsula Energy

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I expect PEN to wallow around for ages in the 11c to 7c range.
This final corrective phase will take a long while.
You wont see 15c visited again for a long long time.

PEN 9.gif
 
I think we can all agree that in the short-term PEN is going to struggle with recent events, but back at company headquarters I hear its business as usual. Found this article concerning the 'Megatons to Megawatts' Program that is due to come to completion in 2013:

http://www.npr.org/templates/story/story.php?storyId=121125743

Considering that the U.S receive approx half of their nuclear fuel through this program, when it comes to an end in 2013 I think we can expect more upwards pressure on uranium prices.
 
A very interesting read tech and it seems that China are at the forefront for developing the technology:

http://www.larouchepac.com/node/17409

However with the goal being implementation 'in about 20 years', hopefully the price of yellowcake should hold up for a few years longer.

Some other interesting reads from the same site

Russian Scientists: Abandoning Nuclear Will Kill
http://www.larouchepac.com/node/17833

Tsunami of Hysteria Doesn't Make It Up the Beach; Asian Powers Continue Nuclear Programs
http://www.larouchepac.com/node/17828

China Moves Ahead with HTR: Nuclear "Workhorse" for Economic Development
http://www.larouchepac.com/node/17832
 
skc said:
Lower. U prices in $US translate to fewer $AUD...
Click to expand...


That is true SKC.

It should be noted however ......

1) The Broker Report has discounted the NPV Factor by 35% to accommodate for PEN still being an explorer/non producer

2) PEN management have already signed off on their first off take agreement with a US Utility at a Uranium price of $70/lb (not $50), for 8% of their production (and a 7 year Contract)

Even with the 35% NPV discount ..... at $70/lb , the SP is calculated at 14 cents per share.

With a high AUD, that figure would be discounted of course ..... ie. 40% premium on U sales Vs 23% downside on the AUD. (still in the black though:D)

A lot of water to go under the bridge yet .......

a) Possible acquisitions at cheap prices to offset the above scenario

b) Once Production is started, the NPV discount will be decreased exponentially, so perhaps a 20% gain there.

c) Increased production/resource delineation which looks a certainty if the current results of Lance/ Karoo are any indication

d) Raki Raki potential for increased bottom line

The Brokers have to be reasonably conservative to maintain credibility. Even with a high AUD, the other positives seem to far out weigh any downside. If we weigh in a possible improvement in the USD over the next year or two, which is on the cards, the numbers will get even better ;)

ps I'm no Fundy, so feel free to pick on my numbers:)
 
barney said:
That is true SKC.

It should be noted however ......

1) The Broker Report has discounted the NPV Factor by 35% to accommodate for PEN still being an explorer/non producer

2) PEN management have already signed off on their first off take agreement with a US Utility at a Uranium price of $70/lb (not $50), for 8% of their production (and a 7 year Contract)

Even with the 35% NPV discount ..... at $70/lb , the SP is calculated at 14 cents per share.

With a high AUD, that figure would be discounted of course ..... ie. 40% premium on U sales Vs 23% downside on the AUD. (still in the black though:D)

A lot of water to go under the bridge yet .......

a) Possible acquisitions at cheap prices to offset the above scenario

b) Once Production is started, the NPV discount will be decreased exponentially, so perhaps a 20% gain there.

c) Increased production/resource delineation which looks a certainty if the current results of Lance/ Karoo are any indication

d) Raki Raki potential for increased bottom line

The Brokers have to be reasonably conservative to maintain credibility. Even with a high AUD, the other positives seem to far out weigh any downside. If we weigh in a possible improvement in the USD over the next year or two, which is on the cards, the numbers will get even better ;)

ps I'm no Fundy, so feel free to pick on my numbers:)
Click to expand...

I have to say that I was surprised that the value of PEN wasn't immediately obvious - as I've read somewhere that it is anything between a no-brainer to vastly undervalued...

The report certainly provides a starting point to a price for PEN shares. I think it is fair to discount NPV for an explorer (as they used only a discount rate of 10%). I think it's crazy for them to use AUD/USD = 0.8 as investing in PEN shouldn't be a speculation on currency. At a minimum they should provide some sensitivity analysis on the exchange rates...

Personally I would have valued it with discount rate of 15-20%, exchange rate of 1.0 and U price of $40-50 (8% of production at higher contracted price is good but not enough). If those numbers stack up then everything else would be bonus and the current share price would be vastly undervalued.

Having said all that each investor is free to value the share for themselves based on his/her level of optimism / conservatism.
 
skc said:
I have to say that I was surprised that the value of PEN wasn't immediately obvious - as I've read somewhere that it is anything between a no-brainer to vastly undervalued...

The report certainly provides a starting point to a price for PEN shares. I think it is fair to discount NPV for an explorer (as they used only a discount rate of 10%). I think it's crazy for them to use AUD/USD = 0.8 as investing in PEN shouldn't be a speculation on currency. At a minimum they should provide some sensitivity analysis on the exchange rates...

Personally I would have valued it with discount rate of 15-20%, exchange rate of 1.0 and U price of $40-50 (8% of production at higher contracted price is good but not enough). If those numbers stack up then everything else would be bonus and the current share price would be vastly undervalued.

Having said all that each investor is free to value the share for themselves based on his/her level of optimism / conservatism.
Click to expand...

Appreciate your input and agree with you on the exchange rate. When Hartleys put out their original Report in June 2009, the AUD was around 79-80 cents, so I guess they've continued on with that projection for continuity??

Worth emphasizing the Company has indicated the size of their resources will eventually be much larger than the current Report is calculated on. When both Karoo and Wyoming are proven up in time, their total resources will be many multiples of the current estimates. Working on that scenario, even with a low Spot U price and a high AUD, the numbers could look "scary" in a couple of years.

Looking forward to getting the green light on final Permits, That should set up an interesting chain of events :)
 
Yes barney permitting is going to be interesting to state the least.

However I believe a decision to mine based on a much improved DFS will be as interesting. For now though it seems PEN is a play thing of traders/shorters again.

What will be will be, however I remain very positive about the medium to long term with PEN.
 
youngone said:
Do you think PEN will start picking up again in 1, 2 years?

(Former PEN holder)
Click to expand...

No I think PEN will pick up far sooner, as I do most quality U stocks now.

The media fear induced frenzy created an opportunity of a lifetime, that unfortunately some fell victim of. This sentiment won't last and PEN is moving forward as planned and unhindered. Just because the sp has been hit doesn't meean it is over for the company, far from it.

When this will turn around is truly anyones guess. However my views, that I have held since this started, are now shared by many. The media hype has now waned and moved on to greener pastures such as Libya (the media just loves a good civil war to speculate on impending doom).

I believe the turn around will catch many out in the cold.

A little read of two of the best recent articles I have read...

The True Costs of Electrification: The Future of Nuclear Power After JapanApril 4th, 2011 by Edward Blandford, Stanford University

"In 2000, Neil Armstrong, on behalf of the National Academies of Engineering, announced the 20 engineering achievements of the 20th century that have had the greatest impact on quality of life. At the top of the list: the electrification of the United States, which, he noted, changed the country is economic development and gave rural populations the same opportunities and amenities as people in the cities.If anything shines as an example of how engineering has changed the world during the 20th century, he observed, it is clearly the power that we use in our homes and businesses.

Much attention will be paid to electricity generation in the days and weeks to come, and in particular to its relationship to the future role of commercial nuclear energy. The unfolding crisis at the Fukushima Daiichi nuclear station in northern Japan has raised critical questions about the use of nuclear energy, the potential alternatives, and the costs and benefits to maintaining current plants and building new ones. More specifically, the disaster at Fukushima will highlight what may well be the most adverse unintended consequence of the electrification of the United States: palpable widespread consumer ignorance about the true cost of electricity.

Let's look at the figures: According to the U.S. Energy Information Administration, the average annual electricity consumption in 2008 for a U.S. residential utility customer was slightly more than 11,000 kilowatt hours (kWh). The average consumer price per kWh was around 8 cents. Assuming a median annual household income of roughly $50,000, the typical American household allocates slightly less than 2 percent of their annual income to all residential electricity demands. But as Massachusetts Institute of Technology Professor Richard Lester [1] has noted, from the customer's perspective, a nuclear kilowatt hour is indistinguishable from a solar or a coal kilowatt hour.

Therein lies one of the fundamental problems.

Since the inception of power generation and distribution, the use of various fuel sources has resulted in substantial environmental, political, national security, and public health consequences that are not internalized in that 8 cents per kWh figure. Hidden in the cost at the meter are the human health impacts and the irreversible environmental degradation [2] that come from the use of fossil fuels such as coal and natural gas. According to a 2010 United States National Research Council (NRC) report, the hidden health and environmental costs of all U.S. energy production and consumption totaled a staggering $120 billion in 2005, with nearly half coming from coal-generated electricity. Life-cycle CO2 emissions from nuclear, wind, biomass and solar power appear to be negligible when compared with fossil fuels, the report says. It goes on to say that the fuel cycle of nuclear power does pose some risks, mostly from the health impacts from uranium mining activities.

In the wake of Japan's nuclear crisis, it is time for this country to be honest and confront the true cost of generating electricity. Indeed, as we reflect upon the ongoing situation in Japan, and attempt to answer the many questions about the future of nuclear energy, here?s to hoping that the post- Fukushima societal calculus involves a much better understanding of the hidden costs associated with delivering cheap and reliable electricity. If it does, nuclear energy will likely continue to be a vital component of the global energy generation portfolio. If it does not, we will all be reminded that merely hoping for a careful consideration of the costs and benefits is not enough, and there is a reason why hope was all that remained in Pandoras jar."

source (and more information):
http://www.energypolicyblog.com/201...tion-the-future-of-nuclear-power-after-japan/


And if this hasn't been read before it should be, especially all the ones that call constantly for "balanced" posts and yet posted nothing but one sided negatives since the Earthquake and resultant Tsunami. Yes "Tsunami" induced event, not Nuclear accident as was Chernobyl and 3 mile.


This is an excellent article IMO...

In part...

Nuclear as Usual: Why Fukushima Will Change Less Than You Think
By Jesse Jenkins, Ted Nordhaus & Michael Shellenberger
Mar 23 2011, 12:52 PM ET


"Jesse Jenkins, Ted Nordhaus & Michael Shellenberger - Ted Nordhaus and Michael Shellenberger co-founded the Breakthrough Institute, an energy-focused think tank. Jesse Jenkins is the director of energy and climate policy at Breakthrough.


Despite the sturm-und-drang and political posturing about the Fukushima nuclear disaster, the event won't do much to change the basic political economy of atomic energy



From virtually the moment that reports first hit the international media that there were problems at the Fukushima nuclear plants, speculation about the impact that the accident would have upon the future of nuclear power overwhelmed accurate information about the actual nature and severity of the accident.

While the full extent of the accident is still unclear and may remain so for many weeks or months, one thing is clear and has been since the very earliest reports of trouble. The public health, economic, and environmental impacts of the Fukushima accident will pale beside those of the natural disaster that caused it.

Total fatalities resulting from the earthquake and tsunami will likely exceed 20,000 and has left close to a half million people homeless. The economic loss associated with the disaster has been estimated at up to $300 billion. The tsunami has scattered the civilizational detritus of what was much of northeastern Japan over a landscape of hundreds of square miles.

Even in the worst case, involving the full meltdown of multiple reactors and a significant breach of containment, there are no credible scenarios wherein the Fukushima accident could conceivably have racked up a similar human, economic, or environmental toll. Nonetheless, Fukushima was the worst nuclear accident since Chernobyl and anti-nuclear activists were quick to make the comparison. Never mind that the Chernobyl disaster resulted from an explosive fire at an uncontained reactor of a far more dangerous design that exposed vastly more people to vastly more radiation than Fukushima could ever possibly result in."
source and full article:
http://www.theatlantic.com/technolo...ushima-will-change-less-than-you-think/72913/
 
tech/a said:
I expect PEN to wallow around for ages in the 11c to 7c range.
This final corrective phase will take a long while.
You wont see 15c visited again for a long long time.
Click to expand...

I agree with the Duck!

It's about shareholder sentiment, which is very slow to come back from disaster, as opposed to fundamentals of PEN, which are undisputed.


Could well be a few exciting moments of history unfolding!
 
skc said:
Broker research out... these guys must have read and responded to my post.

http://www.pel.net.au/images/peninsul-134--daadaikeis.pdf

View attachment 42206

So NPV is 7.5c per share fully diluted based on U price of $US50 and AUD/USD 0.8?

Any comments?
Click to expand...

Largely missed by the faithful

The OPPORTUNITY of 16c a share has come and gone!
It will I feel remain at value until something throws it to undervalued---not just opinion or Company fluff!

Technically the analysis remains valid.
Not one techies would have an interest in.
 
Another earthquake in Japan. Testing uranium stocks again now.:) I wonder how would traders feel about that. It is time to do some observation
 
bathuu said:
Another earthquake in Japan. Testing uranium stocks again now.:) I wonder how would traders feel about that. It is time to do some observation
Click to expand...

Thanks for your post.
I would never put a smiley on my posting while dealing with people tragedy like Earthquake in Japan.
Probably the best winning construction contractor to repair a devasted town will not put a smiley sign on such postings.
I am just expressing myself recognising PEN's SP is volatile on people reaction on emotions associated with nuclear related matters than the real economic advantages from nuclear powered station and environmental benefits in a long run, but can not cope up with people's elation on matters related to people tragedy.
Every one has a right to express opinion and so I am.
 
Miner said:
Thanks for your post.
I would never put a smiley on my posting while dealing with people tragedy like Earthquake in Japan.
Probably the best winning construction contractor to repair a devasted town will not put a smiley sign on such postings.
I am just expressing myself recognising PEN's SP is volatile on people reaction on emotions associated with nuclear related matters than the real economic advantages from nuclear powered station and environmental benefits in a long run, but can not cope up with people's elation on matters related to people tragedy.
Every one has a right to express opinion and so I am.
Click to expand...

Get a grip.
Would never have been his intention---your reading much more into a benign post AGAIN.
You appear to be quite an antagonistic opinionated character.

Purely expressing my right of opinion of course.
 

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