PRU - Perseus Mining

[JTLP]

as with some of the goldies, PRU is showing a change of trend. These lows have not been seen since 2011 and might offer a good entry point if POG stays strong. No time for chart sorry, someone else might add if they can?

Can't add a chart but I can add that last time I watched PRU and OGC run from about $1 and $0.60 to their respective highs!

Do I feel confident in a POG uptick and PRU cruising along? As Kennas noted - they seem to have fixed some of their problems - if they can do it all and keep cash costs at a minimum it would look VERY interesting. Just hope politics in the lovely African continent can be kept in check. POG - the world is chugging along ok atm - perhaps on weakness I will buy.

 

[shag]

with the europe shambles again, ie the blatant weath grab, who would hold cash. u would think the pog would go thru the roof, along with dwindling supplies n asian buying. wouldnt one be scrambling to buy precious metals esp. au, and stash it in the garden or dog kennel.

seems they flogged the crusher to death in the first yr n ignored warning signs, upkeep etc, for reasons one can only assume.
its a shame theres not a mechanical engineer or even a skilled technician on this site to comment.

a very tough lesson for all, but hopefully its behind them.

 

[JTLP]

You'd have to feel that those rumours of PRU being a takeover target are still in the mix - they're down at $1.50 today (MC of $760M...not long ago it was $1.5B!)

As I said last time - when this thing turns it turns pretty quickly...will be interesting to watch. I know the US have said that they'd need to ease their easing program in the future...but I really can't see it happening

 

[Calliope]

I think PRU has been over-sold as a result of falling gold price.

Clarus Securities released an updated research report on Perseus this week. Analyst Nana Sangmuah wrote, “We remain encouraged by PRU’s growth potential with Edikan now turning the corner and a fiscal stability agreement at Tengrela imminent. Production at Tengrela is expected to deliver production growth of ~85% by 2015. We maintain our BUY rating and $3.20 per share price target.

“We remain encouraged that Edikan operations are on the mend with crusher availability at 89% in April from the 51% level recorded in January. Management is now focused on fine tuning plant metallurgical performance and maximising SAG mill throughput with a targeted rate of 8.0MMtpa plant capacity expected to be reached by mid-year. We are modeling production of 183koz for the remainder of the year at total cash costs of US$965/oz. However, attainment of the targeted plant capacity of 8.0MMtpa by mid-year could provide upside to our estimates.”

 

[Sean K]

It's only oversold if POG recovers. Will it? All this money printing was supposed to destroy the USD and support POG. It hasn't.



Yet.

 

[mr. jeff]

It's only oversold if POG recovers. Will it? All this money printing was supposed to destroy the USD and support POG. It hasn't.



Yet.

Yes very true. Serious things were supposed to happen and haven't eventuated at all. this leaves a lot of people;

1) Cyring conspiracy etc.
2) Suggesting the market is distorted phys. vs. elect.
3) Buying stocks that are "way undervalued".

No advice permitted, but POG suggests that these falls are in line with the market movement at the moment and people are trying to get clear of exposure to gold miners at this time. PRU is of course a decent miner worth watching for a change of trend though...

Of course things can change quickly, but with markets looking like finding a recovery and a bit less volatility, then maybe gold has seen its run for a while.

 

[JTLP]

PRU at $0.86 now. Wow. Never thought we'd see it back down here again.

Everything hinges on the Fed tonight. Will they or won't they support ongoing stimulus?
IMO - I think they will start to wind it back with scope to increase at the first signs of weakness. Indicators look good and they can't continue on this unsustainable trajectory forever.

 

[Sean K]

I really did think, on the balance of things and market commentary by respected economic analysts, that the continued stimulus would result in massive inflation, total debasement of the USD, and flight to perceived 'safe havens'. The perception of this forced the POG to go hyperbolic for some time. Massive rises, year after year. There are quite a number of gold bulls on ASF, most still here. Most of those probably think that this is a correction before the next leg up after the world financial system absolutely keels over after getting into so much debt that it is irrecoverable. Faber and Rogers are close to buying if not already I think. Maybe they lose their shirts...Personally, I've been out since 2009. Very happy right now.

 

[mr. jeff]

I really did think, on the balance of things and market commentary by respected economic analysts, that the continued stimulus would result in massive inflation, total debasement of the USD, and flight to perceived 'safe havens'. The perception of this forced the POG to go hyperbolic for some time. Massive rises, year after year. There are quite a number of gold bulls on ASF, most still here. Most of those probably think that this is a correction before the next leg up after the world financial system absolutely keels over after getting into so much debt that it is irrecoverable. Faber and Rogers are close to buying if not already I think. Maybe they lose their shirts...Personally, I've been out since 2009. Very happy right now.

I persisted past the end of the run, but fortunately was able to extricate my positions and move on.
I agree with you that there seemingly was the case for gold to go a lot further than it did, however when you see the chart, as you say it went parabolic and that was as much as it could do.

What happens next is hard to predict, but may of the drivers for POG are still there - money printing, incentives to drive each currency down by printing to devalue for debt reasons as well as competitive reasons between nations.

No point in attempting to predict the future.

 

[jancha]

I persisted past the end of the run, but fortunately was able to extricate my positions and move on.
I agree with you that there seemingly was the case for gold to go a lot further than it did, however when you see the chart, as you say it went parabolic and that was as much as it could do.

What happens next is hard to predict, but may of the drivers for POG are still there - money printing, incentives to drive each currency down by printing to devalue for debt reasons as well as competitive reasons between nations.

No point in attempting to predict the future.

Supply and demand would have to have bearing on how low Gold can go. The cost of producing Gold is becoming more and more expensive. For that reason and the demand for Gold I cant see it going down much lower otherwise who's going to mine it?

 

[skc]

That was some crazy price action today. Sure the market rebounded well from a weak start but PRU went from 63 to a high of 79. A range of 25% from the low. Had a signal to go long RPU as a pair but was too chicken to take the trade.... oh well.

 

[Sean K]

After the set back with cocking up the mill, negative political/tax issues, it's POG v Opex that's killing them. And the Hedge.

March quarterly:

Total site cash cost for the Quarter of US$1,132/oz1 was 7% higher than December Quarter due to costs of crusher repairs and one-off costs

Production and cost guidance for six months ending 30 June 2013 of 105-125,000ozs of gold at an all-in cost of US$1,100/oz remains unchanged

Hedging commitment linked to debt financing reduced to 193,000oz at a weighted average price of US$1,389/oz

Obviously, if POG keeps going down and cash costs up, they are toast.

 

[JTLP]

I thought they were meant to be a super cheap producer?

Doesn't look like a lot of meat left on the bone factoring in all those costs.

 

[Sean K]

I thought they were meant to be a super cheap producer?

Doesn't look like a lot of meat left on the bone factoring in all those costs.

I can't recall what the BFS OPEX figures were but surely less than that...

Looks extremely high for Africa. Maybe there's a lot of Expat salaries in there?

Or, the costs of keeping a dodgy mill going...

 

[JTLP]

I can't recall what the BFS OPEX figures were but surely less than that...

Looks extremely high for Africa. Maybe there's a lot of Expat salaries in there?

Or, the costs of keeping a dodgy mill going...

And naughty naughty.

Just told the market after close that things aren't all that rosy out at Edikan; mill problems etc and a lower gold output forecast and higher cost per oz than 1,100 .

This one is in an absolute pickle now...personally staying away as I don't think they'll make it now.

 

[Sean K]

And naughty naughty.

Just told the market after close that things aren't all that rosy out at Edikan; mill problems etc and a lower gold output forecast and higher cost per oz than 1,100 .

This one is in an absolute pickle now...personally staying away as I don't think they'll make it now.

They've just been crucified the past few months. It's got it's basis in the OPEX, contractor/mill issues, tax, and short term POG crumpled. Maybe a perfect storm. The way out short term can only be a POG recovery I think. Like significant bounce based on some 'fundamentals' like huge inflation numbers and USD tanking. Maybe they need Russia to start sending troops into Syria in support of Assad, that might be a nice POG supporter...

 

[JTLP]

They've just been crucified the past few months. It's got it's basis in the OPEX, contractor/mill issues, tax, and short term POG crumpled. Maybe a perfect storm. The way out short term can only be a POG recovery I think. Like significant bounce based on some 'fundamentals' like huge inflation numbers and USD tanking. Maybe they need Russia to start sending troops into Syria in support of Assad, that might be a nice POG supporter...

They will need something to send the POG up and fast. Apart from the hedging they are really hanging on by a thread. I feel for holders; seems a bit misleading to give an update not long ago about costs circa $1,100 then come out and say in the past few weeks X has happened at Edikan and now its going to be more!

Still; as I predicted - justly smashed down to 51.5 cents (-22%). They will have to put other projects on the backburner now in order to survive.

Does anybody have a P2P sheet with cash cost per oz?

 

[Sean K]

They will need something to send the POG up and fast. Apart from the hedging they are really hanging on by a thread. I feel for holders; seems a bit misleading to give an update not long ago about costs circa $1,100 then come out and say in the past few weeks X has happened at Edikan and now its going to be more!

Still; as I predicted - justly smashed down to 51.5 cents (-22%). They will have to put other projects on the backburner now in order to survive.

Does anybody have a P2P sheet with cash cost per oz?

They've been providing cash costs in their quarterly presentations but use a different term for it. And it's changed over time. Maybe a bit of smoke and mirror?

Must be close to a Dead Cat.

 

[Sean K]

Well we got a bit of a dead cat from late June but yesterday might have seen the cat it hit it's apex. Absolutely shocking time for those holding on to the gold story. Gee, I hope it turns around, although that will probably mean we're coming out of this economic mess. Or, this is just a break in the traffic...No idea.

 

[skyQuake]

She'll be right mate

I am of the opinion that no US o/n leads = easy selling in AU.

Technicals wise its looks pretty good, filled gaps on downside, waiting to fill gaps on upside!