Post by
LittleOwl on Nov 29, 2022 11:51pm
THE OPPORTUNITY OF A LIFETIME ?
They have about US$ 5 million to spare from the Loan Facility increase they secured 2 weeks ago. Buying 10 million shares at CAD 1 cent will cost them only US$ 75,000. That would be a lot cheaper than drilling because the ounces bought back would only cost them US$ 1.30 per ounce whereas drilling could cost them 10 or even 20 times as much so it would pay them to continue buying shares all the way up to 20 cents. However although they show 2.7 million ounces in resources (and these are quality ounces), I believe that in fact they do have almost double that or about 4-4.5 million ounces in total that can be classified as resources with very little work. So we could be looking at Gold & Silver in the ground at as little as US$ 0.75 per AuEq ounce and in theory it would still pay them to keep buying shares up to 40 or even 50 cents in order to increase ounces per share without any of the risk and uncertainty associated with drilling. Now this, at this price, is quite unique when you consider that PGDC is a small but nevertheless producing miner with a 480 TPD mill and a near term project in the late permitting stage plus a pipeline of 420 properties at various stages. There is absolutely and categorically nothing, and I mean NOTHING, out there than comes even close in terms of value and potential upside. So what's the catch ? Well, it's obviously the loan. But the loan comes due on 31 December 2023 so it gives the company 1 year + 1 month of breathing time and a lot can happen between now and then, and any positive development could even extend the loan beyond that. So, to cut a long story short, this is far better than any option on the price of Gold and Silver or other mining stocks because it has just had a floor price put underneath it and with an expiry date of over 1 year it is more like a long term warrant but without any exercise price attached to it or acceleration clause that would compel the holder to pay up early. And all this is with an unprecedented leverage to the upside because right now, for whatever reasons, it is being completely mispriced by the market.
The NCIB buying can start this Friday 2 December 2022 to 1 December 2023.
Maybe the opportunity of a lifetime.