RE: RE: RE: RE: RE: RE: RE: RE: RE: RE: RE: RE: REAlso, without a rail line, UO will not be profitable, if PCY has to use a fleet of trucks. The only value for PCY is in Chagdana.
2011 Outlook: During June 2011, the supply of diesel was rationed in Mongolia due to reduced supplies from Russia. Thus far, this has not had a negative impact on Ulaan Ovoo?s operations. The mine has been allowed to receive an allocation of diesel because it produces coal for local Mongolian power stations. However, given the future uncertainty of diesel supplies, the Company will monitor its diesel supply closely to optimize mining production rates and coal transportation activities for the remainder of 2011. Since the mine is still in pre-commercial production status, the current unit cost of producing coal at the mine is higher than what is expected when the mine is in steady state. Therefore, operating costs are currently being capitalized.
-June MD&A
So even if PCY gets an off-take agreement, they may not have enough diesel to get it to the Russian rail line. And if they do, the diesel cost may be too high, and make the operation uneconomical.
But hey, everyone is jumping into PCY because of NKL. And if NKL is a fail, you have a lot of PCY bagholders.
full disclosure: I used to own PCY shares, but sold them all when the technicals analysis, indicated a sell signal.