Peninsular Gold Share Discussion Threads

[kooba] 29/10/2009 18:13

yes saw the very encouraging update but have significant holding in hif soon to be mirl [after t/o] and ugy so bit heavy in that part of the world.am more interested in picking up producers at the moment.recognise you from axm do i not?? went back in today for 100k @ 9.25p having sold last of my long term stock at 15p..think we are close to news there and looking to add.

[jonny flame] 29/10/2009 18:04

Thats quite a signficant purchase. Just of of interest have you ever looked at MARL? They released some excellent news yesterday. I have been invested in the company for a while and really like the prospects.

[kooba] 29/10/2009 17:43

me too picked up another 25k today here and also ugy..good opportunity with pog on the bounce.

[jonny flame] 29/10/2009 17:35

Picked up a few shares this afternoon, took advantage of the sell off.

[jonny flame] 28/10/2009 15:49

So todays 7.5% drop is down to 2 sells totalling a combined £4182 pounds!

Time to add soon, I reckon.

[eric76] 27/10/2009 07:53

This from march covers cash costs etc but not the upgrading of plant they've recently announced. The RM60 Million in profits at $960 an oz comes out at around £10 million UKP so the numbers should please just be good to have news on drilling Raub too.


Golden strike for Peninsular Gold


Monday, 02 March 2009 16:08


While the world is worrying about how deep the recession will be, gold miner Datuk Seri Andrew Kam seems to have every reason to smile as gold price continues to climb even as the prices of other commodities have collapsed.

On Feb 18, Kam, the chairman and major shareholder of Peninsular Gold Ltd (PGL) that owns a gold mine in Raub, Pahang, saw the company's first gold dore (bar of semi-purified gold) being produced.

"It is a major milestone in the development of PGL as it marks the transition from an explorer of gold to being a producer," says Kam, who is bullish on gold. He believes it is good alternative for wealth preservation, thus the resilient demand.

There are more reasons for Kam to celebrate. His company did not hedge its gold production, hence, the gold it produces will be able to ride the rising price trend.

Also, PGL's wholly-owned unit Raub Australian Gold Mining Sdn Bhd (RAGM), managed to obtain a RM54 million loan from Bank Kerjasama Rakyat Malaysia Bhd to finance the company's repurchase of its US$20 million (RM73 million) convertible loan notes. In addition, the bank has granted a further RM15 million for the company's working capital.

"We managed to convince the creditors to agree to our repurchase exercise. We only pay US$17 million, together with an issue of 10 million warrants to buy back the US$20 million loan notes. It is a good deal for us," says Kam.

Perfect timing
Just two days after PGL announced the production of its first gold dore, the price of the precious metal marched back to US$1,000 per ounce, a historical high recorded in March 2008. It has now retreated to the US$950-level.

In 4Q2008, gold price slid to a low of US$712 per ounce in November after the bursting of the commodity bubble worldwide. But it regained its lustre as the world economic outlook got gloomier. Investors sought shelter in gold amid worries over the deepening of the global economic crisis, which may result in a prolonged recession.

According to the World Gold Council, the biggest source of growth in demand for gold in the fourth quarter last year was investment. The most striking trend in 2008 was the reawakening of investor interest in the holding of physical gold. Demand for bars and coins rose 87% over the year, with shortages reported in many parts of the world.

The most dramatic surge was in Europe, where bar and coin demand increased from just nine tonnes in 4Q2007 to 114 tonnes a year later, a 1,170% increase, the World Gold Council says in its latest report.

Kam's gold rush may have just remained a dream if the price of the precious metal had remained low. "The high gold price has made it commercially viable for us to adopt advanced technologies to process the tailings that were left behind and still contain gold," he explains.

The announcement of the first gold pour has lifted the share price of PGL, which is listed on London's Alternative Investment Market (AIM). PGL, which incurred a net loss of £1.4 million (RM7.4 million) for FY2008 ended June 30, rallied to an eight-month high of 46 pence, more than triple the recent low of 14 pence. The counter closed at 45.3 pence last Wednesday.

"Shareholders (of Peninsular Gold) can expect to reap the fruits now. There will be profitable years ahead," he tells The Edge.

Based on an expected annual output of 25,000 ounces of gold, Kam says PGL is anticipated to earn a yearly net profit of RM60 million on revenue of RM80 million at a gold price of US$960 an ounce.

"If we want to increase revenue, what we could do is to expand our capacity in order to drill and produce more (gold)," he says.

Turning sand into gold
RAGM currently has proven reserve of about 202,000 ounces of gold in 8.6 million tonnes of tailings in Raub - a historic gold mining town. It has constructed a carbon-in-leach plant to restart the gold production.

"We are turning sand into gold," says Kam. His plan is that the plant initially produces gold from the tailings left by the historic Raub Australian Gold Mines, which had mined over one million ounces of gold before it was shut down in 1961. Later, the plant will process gold from the proven reserves discovered in nearby areas.

Kam, who spent his childhood in Raub, has faith that there are still ample gold reserves awaiting exploration in the central belt of the peninsula and soon, Malaysia will again become a well-known gold producer like in ancient times.

PGL's average production cost is in the range of US$250 to US$280 per ounce while sales are at above US$900 per ounce.

"Our cost in Malaysia is much lower than other gold-producing countries. This is partly because of low labour costs and rebates on power supply, while PGL enjoys certain incentives from its pioneer status," Kam says.

He adds that he is appreciative of the Pahang government in helping make the gold production project, located in the Eastern Economic Corridor, viable.

The average production cost among the world's top 20 gold producers is between US$400 and US$440 per ounce. Some producers may incur higher costs due to a harsh mining environment.

Kam is aware of the low-cost advantage. "We are still making good profits - even if the gold price falls substantially from the peak. But I'm bullish on the gold price trend," he says.
This article appeared in the Corporate page, The Edge Malaysia issue 744, March 2-8, 2009.

[eric76] 27/10/2009 07:27

Agree they could do with much better pr. I wouldn't like to say how much they've produced up to now Captain as they have been gearing up this year so should be on pro forma 25,000oz's/year by now imo but what monthly levels they've done I guess we'll have to wait and see.
Should still be a pleasant surprise when we do esp at this share price level imo.

[jonny flame] 27/10/2009 07:09

But then we should be due news soon as interims were released on the 13th of March?

Shame the PR and news flow from this company is poor.

[captain_crash_and_burn] 26/10/2009 21:49

Thanks for that update on the court proceedings eric, things definetly still looking good here then. Maybe there giving updates every 6 months rather than quarterly, bit of a shame but so long as its a good update i'll be happy. How much gold do you guys reckon we will have produced since the last update? Next leg up soon i would have thought.

[eric76] 26/10/2009 14:51

Yes I had a few aaam early for a bit of a trade, they do seem very cheap. Been fortunate with nasa today as well. I think the markets begun to notice them.
You're welcome on the link here it'd be good to see them take another leg up though. Whether on news or the rising gold price i don't mind it seems they've been left behind for too long now and they don't warrant the disinterest imo.

[jonny flame] 26/10/2009 14:40

Hi eric, hope all is well and your investments are doing well, I think I saw you over on the AAAM thread, that's a company that I'm very, very excited about. Thanks for posting the link.

[eric76] 26/10/2009 14:22

Be good to get some official news here, thanks for trying jonny. These shouldn't be floundering at a paltry £23 million market cap with production apparently on track for their 25k oz's and the plant being upgraded to be able to double production.
Seems they're not having any issues with the dispute still. Questions were asked in the Malaysian House of Commons last week and the Gov came out firmly on the side of the mine.
The Tourism minister (also the villagers local mp) is also strongly in favour of the mine so the political risk may be a lot less than peeps may think imo.

2009-10-24
Pemberitahuan Pertanyaan Dewan Rakyat Notification of Inquiry of the House of Commons

PEMBERITAHUAN PERTANYAAN NOTIFICATION OF INQUIRIES
DEWAN RAKYAT MALAYSIA DEWAN RAKYAT MALAYSIA

PERTANYAAN : LISAN QUESTION: ORAL
TARIKH : 22-10-2009 DATE: 22-10-2009
SOALAN NO: 24 QUESTION NO: 24

SOALAN QUESTION

Honorable ER TECK HWA [BAKRI] ask the MINISTER OF NATURAL RESOURCES AND ENVIRONMENT say: --
a) whether the Ministry agreed with 11 claims submitted by the Committee on Anti-Cyanide in Gold Mining at Bukit KOMAN, Samarinda. Jika ya, apakah tindakan yang akan diambil. If so, what action will be taken. Jika tidak, mengapa; dan If not, why; and
b) describe the standards used to test chemical removal tool installed in less than six days.

JAWAPAN: ANSWER:

Tuan Yang Di Pertua, Mr. Speaker,

a) To the Honorable Members information, the Ministry have reviewed all 11 claims that have been submitted by the Action Committee Against Panggunaan Cyanide in Gold Mining at Bukit KOMAN, Raub, Pahang. Claims covers various issues including security issues, acquisition of information and public participation.

International Cyanide Management Code for the Manufacture, Transport and Use of Cyanide in the Production of Gold. In relation to security issues, cyanide delivery from the port premises to the gold mines and the use of the plant is subject to international regulations, namely, the International Cyanide Management Code for the Manufacture, Transport and Use of Cyanide in the Production of Gold.

Regarding aspects of procurement information, the Ministry ready to provide information to relevant parties in accordance with law and existing regulations. Accordingly, the Ministry berpendirian that the relevant documents as provided for under the law.

The claim that established Steering Committee and Expert Group for mengingkatkan involvement of the public, the Ministry considers the proposal is not appropriate. This is because the Government has the expertise and mechanisms in government agencies such as the Minerals and Geoscience Department (JMG), Department of Environment (DOE) and Department of Health to ensure that gold mining operations comply with all conditions set mainly in the aspect of public safety.

Murugiah, Deputy Minister in the Prime Minister's Office was held at the Pahang State Public Complaints Bureau to look into these complaints. This meeting was attended by representatives from the Department of Health Pahang State, Pahang DOE, JMG Pahang, Raub District Office and the environmental activists and some public and media representatives. Walaubagai any, the Action Committee Against Use of Cyanide in Gold Mining at Bukit KOMAN not even invited to attend. The meeting decided cyanide poisoning found no effect of mining activities and does not affect the health of local residents, as well as mining companies have to comply with all guidelines set.

b) To Members of the Berhomat information, results of monitoring carried out by the Department of Environment (DOE) in the area around Mount KOMAN for 6 days (ie 2nd .- 7th July 2009) using the portable gas detector, found no gas detected as raised in the complaint by the Committee on Anti-Cyanide in Gold Mining at Bukit KOMAN. Among the gases that can be measured by instruments such gases include carbon monoxide (CO), nitrogen oxide (NO) of sulfur dioxide (SO ₂), ammonia (NH ₃), nitrogen dioxide (NO ₂), chlorine (Cl ₂), hydrogen sulfide (H ₂ S) , mentana (CH ₄) and hydrogen cyanide (HCN).

The DOE will continue to conduct regular monitoring program to ensure compliance with all operating conditions imposed.

Barisan Nasional always determine that the industry in this country, including gold mining activities do not affect the safety and welfare of the people. This is consistent with our goal to achieve the ideas, aspirations and hopes One Malaysia, People's Preferred first and Achievement.
Thank you.

[jonny flame] 17/10/2009 10:08

Just emailed the public relations people to see if they can find out when we will have some news here, I doubt they will be able to tell me, however it's worth contacting them so they know us PI's are patiently waiting.

Interims were released on the 13th March, since then we have had the operations update on the 17th June, so surely can't be long before we have the next update?

Regards,
JF

[captain_crash_and_burn] 12/10/2009 22:00

Good posts guys made for interesting reading of the story so far, i reckon we're now due some news and another push north from the sp, be interesting to see where production is at now.

[jonny flame] 12/10/2009 09:24

luckyjonah - v.good post, agree with most of what you say, although in regards political risk do not forget that PGL still has the dispute hanging over it(which I think they will win).

The question is when will we have some news? PGL have been fairly poor at communicating the story to the market, which is one of the reasons I think the share price is not far higher than it is. Still not complaining as this allows me to continue buying in before the share price rerates.

[luckyjonah] 12/10/2009 08:46

Please don't start polluting this board with unrelated ramps.

PGL think they can prove up 1m ozs at Raub, but also a further 5m at Tersang. The current plant, where they plan to double capacity, is only expected to process the Raub tailings and East Lode oxides. And don't forget that the oxides are nearly twice the grade of the tailings, so if they were originally targetting 25,000 ozs pa from the tailings, then post-capacity increase with oxide is going to be around 89,000 ozs pa. That's 11 years of resources assuming they can prove up 1m ozs.

Now in an article in 2006 their CFO stated that the tailings cost was expected to be only $163/oz, significantly lower than the $300 figure usually quoted. If you allow a 30% increase in processing costs by interpolating Avocet's recent costs this brings PGL's low-grade processing costs to around $212. Thats a massive discount to spot gold (as if I need to point that out! :-)

Finally they have also found additional surface and near-surface oxidisation at Raub - this had only been mentioned once before and I don't believe this is part of any resource estimate yet, but it could push the grades higher still.

Meanwhile for Tersang they intend to built a separate plant, but have stated they will only do so once they have defined 1m ozs (of their 5m target). So potentially when they reach this stage they could be doing 89,000 ozs at the Raub plant and another 30,000-60,000 ozs at the Tersang plant. Working out potential profit with gold set to rise and I can't see a better gold play out there in terms of expansion, political risk (lack of), simplicity, finance and history of delivery.

[ceckyspunt] 11/10/2009 20:34

nothing, but i wanted hyper to give his views

[jonny flame] 11/10/2009 20:01

hyper in terms of value for money, FND looks better value than DME. It's also producing copper NOW.

Cecky - what has DME got to do with PGL?

[ceckyspunt] 11/10/2009 19:21

hyper,

o/t

please read this and post your comments on the DME thread

[ceckyspunt] 11/10/2009 18:58

al,

i think its a case of "make hay while the sun shines", because gold prices are cyclical... who can say if gold prices will be anywhere near their current highs in ten years!

we are at all time highs now, but in 6 or 7 years, when people have forgotten the credit crunch, and economies are back under control, maybe we'll see gold prices of $600 or lower again?

so IMO gold producers should be busting their guts trying to deliver now, and not worry too much about beyond 5 years into the future...

[jonny flame] 11/10/2009 18:42

Hyper Al - I think we might have news on a resource upgrade soon. The other thing is if you read the last RNS they are going to double production, they wouldn't be doing that if they did not know the resources were in place.



Hopefully, we will shortly find out just how profitable this company is (currently valued at £23.75) they have previously stated that they are looking to be a 25,000oz pa producer at a cash cost of around US$300 per ounce. If they hit these targets then then market will have to wake up on the valuation of this one;



"Anticipated annual average production from the 1.1 mtpa plant is expected to be approximately 25,000oz at an average cost of less than US$300 per ounce".

"Peninsular is targeting the eventual delineation of over 1 million ounces of gold resources at Raub".



Operations Update - 17th June, 2009

"The Company is pleased to announce that its newly built carbon-in-leach ("CIL") plant ("Plant") at Raub is performing ahead of management's expectations, since its first gold pour in February, and had produced 4,140 troy ounces of gold to the end of May. Plant performance is expected to improve further as we ramp up production towards anticipated levels via both an increase in tonnage throughput and further optimisation of the CIL process".

[hyper al] 10/10/2009 17:57

Nice to find a producer and what appears to be a very well managed company, my concern is that the resource is a bit small.

[jonny flame] 08/10/2009 16:09

Jim Rogers, Says Gold Could Hit $2,000 Over Next Decade:



00:00 Prospects for $2,000 an ounce gold
02:30 Owning "real assets" because of inflation
03:50 "Propping up zombies doesn't work."
04:35 Outlook for oil, Japanese yen; agriculture

Running time 11:17

If you don't know who Jim Rogers is start reading his books now, spending £16 and a few weeks reading 'Hot Commodities' and 'A bull in China' could well be the most profitable investment you ever make. Certainly helped me with my investing anyway, they should teach his books in schools.

Philip Manduca also sees gold surpassing it's inflation adjusted highs and going to $2,000 an ounce;

ECU's Manduca Sees Gold Price Rising to $2000 by 2010:

[kooba] 07/10/2009 11:45

joined the happy band of holders today.seems a bit overlooked as an expanding producer so have picked a few up to add to my list of gold plays.

[eric76] 07/10/2009 10:20

I was happy with the $1300 predictions $1500 sounds great.
Good to see the interest in this one has carried through to today. I still see this one as quite a winner once Raub's prospects are better known and the recent news on doubling productive capacity was very bullish imo.