Pilbara Minerals Ord Shs T.PLS

RE:RE:RE:RE:RE:Article in the Saturday Globe and Mail mentioning Polaris

[aggman]

I do follow HBK and I am quite active on the BB - attemting to be a sensible voice of moderation and reason (I do try).

Full disclosure: I am invested in PLS, HBK, and NI (Victory Nickel).

HBK will not make $11M pre-tax profit next year or in their first year in production.  Whilst the management of HBK has done a commendable job (see a recent post of mine) - they are nascent in the sense of proving their end use market.  Whilst there appears to be a significant amount of potential in Prince Rupert with LNG, Potash and general infrastruture I do not think anything is firmly in their order book.  I believe the company reports that it has preliminary tender bids out on a number of competitive bids, at healthy pricing, but not one ton of stone is confirmed to a customer.

Whilst I believe HBK's prospect are excellent, they do need to be validated on the market-side.  

HBK and PLS are not cut from the same stone:

PLS is proven with excellent end markets and partners established and is clicking along at 4.0 m tpa of sand and gravle at $13/ton.  Management is proven.

HBK has a permitted reserve - scree material that can fetch $38/ton (as stated by HBK) - but the market is yet to be validated.  Management's strength is in exploration - not in operation - and there is an overt sense of speculative promotion by management - IMHO - based on a constant stream of news flow (too much to be taken seriously).  My advice to HBK management and investors - be more patient.

I think HBK will do very, very well, just not as soon as they would like (ain't that life?).

I think PLS will do very well - and its taking longer than the Company hoped also.

The takeaway here is that developing aggregate businesses and developing end use markets that love your rock does take 5 years (PLS have shown that). PLS's material is coveted - after 7 years and they will go from strength to strength in all markets that they serve.

HBK needs to grind out a few operational years.  Granted if HBK make a release saying they have sold 300,000 tons at $38/ton - the stock quadruples on that news.

Sensibly I reckon $11M in pre-tax profit in Year 3.

I wish both companies well, I have my skin in both games.