||EPS - Basic
||Market Cap (m)
Real-Time news about Palladex (London Stock Exchange): 0 recent articles
|wdurham: It might not be worth much with the current abysmal state of the share price, but should be noted that unlike Oxus, Centerra et al, Palladex has a 100% interest in their exploration ground in Kyrgyzstan.
I daresay if they find anything worth mining, they will have a JV partner thrust upon them, though....|
|planetgong: yeah, I missed the significance of those options; 1,200,000 granted at 20p valid for three years. The date of 25/1/06 means they must have known about the good drilling results - par for the course with this sort of stock. It does imply that the insiders do have good confidence about the future share price.
I'd expect a rise to about 20p as the drill results get a mention in penny share newsletters and newspapers over the next few weeks - Excellent!|
|armsteel: well here we go, maybe the directors taking share options at 20p, should give us a clue where they feel this share price is heading|
|wdurham: I have always reckoned that any board member of any small company should go on a one-week trading course. I even suggested it directly to one such board member, and he agreed with me.
The reason for this is that many have simply no idea how management activity (or apparent lack of it) can impact trader/shareholder perception and thus the share price. Many have no idea how and why their share price moves, nor how the market will perceive their "news". They know nothing about how traders/investors assess the viability of their company, and how - for those who use it - TA can trigger both buying and selling activity.
Seems something that the PLX board could benefit from?|
|ianwc: Palladex Avers It Has Turned the Corner - But Will the Market Agree?
By Stephen Clayson
26 Jul 2005 at 07:09 AM EDT
LONDON (ResourceInvestor.com) -- On the face of it, Palladex [AIM: PLX], which is exploring for gold in the Kyrgyz Republic, seems an interesting stock, but political unrest in that country combined with management ineptitude has impeded its progress and taken a corresponding toll on its share price.
Palladex's CEO Merlin Marr-Johnson however feels that the company has now resolved its organisational problems, and is ready to move forward. He has come to realise that Palladex came to market too early, and that the blithely positive sentiment regarding most mining IPOs that prevailed at the time and which facilitated this premature arrival was not in the company's best long term interest.
By Marr-Johnson's own admission, an initial dearth of experience and a surfeit of confidence amongst management led Palladex to underestimate the undeniable challenge of creating a viable junior gold mining enterprise. The company was hence forced into a serious restructuring that led to the unceremonious departure of two directors and the appointment of a new Principal Geologist with an outlook more in tune with Palladex's requirements.
Now that some valuable lessons have presumably been learned and a relationship, which Marr-Johnson describes as 'pretty good' has been established with the local government and populace, along with the logistical arrangements necessary for exploration work in remote areas, then Palladex may indeed be able to make more effective progress.
As for the precarious political situation in the Kyrgyz Republic, Marr-Johnson reports that Palladex's routine operations have been unaffected by the recent strife, partly as they are located in the south of the country away from the capital Bishkek. Nonetheless, lingering political uncertainty and simmering ethnic tensions will remain a concern for investors.
Palladex's proximate objective is to complete the first phase of a drilling programme on its Aksur prospect, which Marr-Johnson anticipates after 'some minor delays' by September. Once this is has been achieved, a decision will be taken on whether to embark upon phase two.
Interestingly, Palladex now classifies Aksur as a complex polymetallic, rather than pure gold prospect, which might prove useful in boosting the profitability of a mine if one is ever deemed to be merited. The other licence that the company came to market with, Karakala is no longer a significant priority next to Aksur on the basis of preliminary work.
Looking towards the future and of particular relevance if Aksur turns out to be a disappointment, Palladex is pursuing the acquisition of additional regional projects.
Marr-Johnson reveals that the company is in 'advanced discussions' with the government of Tajikistan regarding the purchase of mineral assets in that country, a phylogeny which he describes as 'possibly transformational'.
The company's focus will remain the Former Soviet Republics of Central Asia, which it decided upon in the hope of finding growing political amenability to foreign controlled mining and an operating environment in which it could advance, along with a greater number of available prospects when compared with established gold provinces.
Palladex has reportedly been reviewing a number of potential new projects in its chosen region, but the company has not become aware to date of any other assets in the Kyrgyz Republic with which it would like to become involved, whereas it sees Tajikistan as more interesting. Acquisitions could be funded from the $6.5m in cash that remains from the £5.5m of funds Palladex raised at its listing.
As an investment, Palladex's abysmal record of share price performance, constituting an overall drop since its listing in February 2004 from a value of around 25p a share to approximately 8.5p today with periods of improvement few and far between, has not helped engender positive market sentiment.
Ergo, the company's challenge hereafter will be to prove that it has truly surmounted its management issues and to reverse its market perception through encouraging results, which might succeed in lifting its share price back into more comfortable territory for its investors, but could also be difficult to accomplish.
< Back Respond to this story >|
|mjneish: I can see some analogy between this and investing in biotechs (the sector I usually concentrate on).
Bios are taking drugs through a series of testing phases that become increasingly larger and more expensive. Only after passing all of them do they get approval to market the product. The process takes years, during which the share price is largely sentiment driven. Delays are common, and as here, lack of news starts investors wondering if there's bad news on the way.
As a drug successfully completes one phase and moves on to the next, the probability of reaching the market rises sharply, which is why good news of this kind often results in instant share price mark-ups of 30%, 50% or even more. Failure can wipe as much off the price just as quickly.
So putting on my bio investor's hat, this is how I'd go about valuing something like this. I haven't got the basic knowledge or experience to do so myself for PLX, so I outline it in case it can be of any use, or someone can comment on it.
The fair value of PLX is the average value of their assets, or gold in the ground.
To calculate the average, you need to consider the probability that PLX will upgrade each respective resource to a certain JORC standard, and be able to sell it at an appropriate price, then sum up the selling price over each possible scenario weighted by the probability of its occurrence.
I have no idea what the probability is of upgrading say from P1 to C2 or whatever and then selling it, but I suspect there may be historic data available somewhere that could be used.
Given that others have mentioned perceived political problems in the region, won't this make it a lot harder to find a buyer?
Sorry if the above isn't clear, or simply inappropriate for this kind of company. If it's confusing, let me know and I'll try again.|
|mjneish: Thanks again. Presumably you have made your own estimates of how much PLX could get for selling Aksur and Karakala, once proved, and concluded that PLX are undervalued at the current price. Has there been any discussion on this earlier on in the thread (to save you repeating yourselves)? If not, would you mind volunteering a ball-park figure?
I hope I won't appear lazy. Figuring out how to discount the value of the gold in the ground when passing it on to someone is something best done by those with experience!
Having said that, I'll have a go. I know this is very naive, so please don't shoot me down.
Let's say they find
Karakala: 1,900,000 ounces;
Aksur: 600,000 ounces.
Gold price: $400/ounce (say)
According to the Seymour Pierce note on Palladex's site, production costs can be $200-300/ounce (that's quite a spread!).
If we take the higher figure, this would leave just $100/ounce profit, spread out over the life of the project. Revenue starts rolling in several years down the line, which means it has to be discounted as well.
There's a huge amount of uncertainty, so for the heck of it, let's say both areas start producing in five years' time, and output at a constant rate for ten years until all 2.5 million ounces are exhausted. Discounting at $100/ounce to the present at 12% gives about £52 million (pounds).
Of course they wouldn't be able to sell at this figure, since the buyer would like to make a profit. So say we halve it to £25 million.
Does this make any sense at all?
(EDIT) After writing the above I noticed that the Seymour Pierce note quotes a value of $30/ounce for an exploration property, which would value both PLX's exploration areas (2.5 million ounces) at $75 million (about £43 million) which actually isn't that far off the above rough calculation.
How likely are the figures on PLX's Web site for the amount of gold in each area of exploration to be confirmed, even surpassed? Presumably today's share price reflects the unproven status of the reserves.|
|stakeadder: I've been buying recently again too. I bought more this week at 11.63p.
My broker tells me that market makers are short of stock in PLX and are not holding anything like the number that is needed to balance the books. All sellers now appear to have been cleared and the reason for recent stall in share price and then subsequint dip is that they are trying to flush out a few sellers.
Down trend is now confortably reversed, which I must say is a great relief for all us who bought at floatation!
Im as convinced as I can be at this stage (untill drill results) that we will see the share price pretty close to 50p if not more by september. However its unlikely to be a straight line up so in my experience the best way to play these kinds of shares is to buy on any dips. There will always be few profit takers around as the share price rises to flotation price and beyond and I am more than happy to take their shares off them and relieve them of their terrible burden!
I've currently got an order in with my broker to buy another 30,000 shares at 10.75p. If im really lucky I might be able to grab some first thing monday morning if price dips again.
Anyone else been buying more?|
|wdurham: OK, Stakeadder - I agree that "we shall see" - one of my favourite comments!
Not sure you are correct about RAB - but that's just opinion, and based on what else they were up to in the market at the time. I understand they WERE pretty desperate for cash at the time their PLX holding was sold, which is partially borne out by the price Paul C was able to buy them at!
If Russian resources were perceived as "real" by the market, why are they not reflected in the share price? You can argue all you like - and I quite agree with you - I personally think that a Russian "inferred" equivalent is probably more sound than its JORC counterpart, due to the pretty rigid methodology - but our view is NOT accepted by the market, or PLX would not be sitting about at an £8 mill market cap.
And I didn't say that a new licence would cause the price to fall - just that it will be met by yawns from the market and would have little impact on the price.
Five years of investing in this sector (sometimes very badly!) has taught me that share price and value have no relationship whatsoever, unless sentiment is also on your side. In the case of PLX, unfortunately, sentiment evaporated over a year ago. And it will take something special (which I hope we have coming!) to bring some of it back.
So fingers crossed.....|
You raise a number of points, let me address them...
"a new licence award is all very nice. But unless it contains resources that the UK market is prepared to accept as "real" rather than just "Russian" it will have little impact on the price"
Please excuse me, but are you saying that an announcement of a new licence win will make the share price fall ?? What rubbish !!
The debate about what is 'real' whether JORC or Russian compliant will rage on. There are fores and against on both sides, just ask Mr Marr-Johnson himself.
"I have had a holding in PLX since the day it floated"
So have I. And I also bought some at 9p and again recently at 12.81p. I was convinced they were undervalued at 26p and I am even more convinced that they would be still at that price even now.
"Where traders are concerned, it is completely independent of value! "
I agree, and that allows the private investor to make money by buying low and selling high. And PLX currently way below its 'proper' valuation.
"RAB wanted to sell, and had the shares not been placed with buyers such as Paul Curtis, the price would have plummetted."
RAB knew they were selling too cheap. There was a method in their madness as they have been clearing out a few of their small-cap miners irrespective of quality and valuation, but building up other positions. They werent 'desperate' to sell PLX and my understanding is that they would have held if they couldnt have found a buyer. So I believe price would NOT have plummetted.
Any case, no point in us all argueing. The main point is we all agree that PLX is way too cheap at current levels and thats really all that matters. I strongly believe that we will see 50p by end of summer providing good news at Aksur and 60p by christmas and £1 by next summer. We shall see.|
Palladex share price data is direct from the London Stock Exchange