OTCPK:PILBF - Post by User
Comment by
CalifDreamingon Feb 07, 2008 12:38pm
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Post# 14332821
Custo
CustoI'm not assuming anything, let alone the "worst possible option"
My "numbers" are using parity on the Looney, not 25% higher as you suggest. I was comparing current fx vs the FS assumptions, which used far lower fx and assumed $5 margins. Fuel costs in Q3 were lower than in Q4, so costs continue to increase. If oil falls back to $80, all that does is put PLS back to Q3 costs and substantially lower margins that what the FS suggests.
Margins are low, whether $3 or $5. Management suggests $3 is realistic at current FX and fuel prices. With ~3MM tonnes of production in '08, that implies $9MM cash flow, or 35x cf multiple. That's outrageous valuation. That's about double than what gold producers see, and 7x more than what many base metal mines get valued at with similar mine life.
I've seen some screwy valuations in this market, but PLS takes the cake.