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PRMO management own 1.5B common shares. Diluting does not help these people. Their share value would drop.
Also at 0.0001/0.0002 pps, they don't generate much cash by dumping more shares.
1,000,000,000 x 0.0002 = $200,000
It is peanuts as compared to $14,000,000 gross sale and $6,700,000 net profit. IMO.
All ingredients are in place. Put them in a pot and start cooking. Main course will be served shortly.
March is the month I am waiting for. Multiple PRs for the following:
Quarterly report
Gold sales
Gold refinery
Update on inventory
Additional perimeters
Share structure
Update on mining and production rate
Lots of positive news that bring the pps to respectful level. Transparent is the key.
In third world country, you can buy several houses with $200,000. Or you can hire a troop with tanks and AK47 to deliver your pizza.
It has been 9 weeks since Dec 29 PR about proposed gold refinery negotiation. It is definitely a lengthy negotiation. Deal or no deal?
Gold index at all time high, $1413. Time to sell more gold, pay more tax and be happy.
In third world country, you can buy several houses with $100,000 USD.
The inventory is probably equivalent to three refrigerators in size. I think the inventory is either in Thailand or Germany, where the most popular smelters are located. The best bet is Thailand. In a secured vault with soldiers and AK47. IMO.
Another interesting data from financial reports is export tax paid by PRMO:
June 2008 $ 8,750
June 2009 $ 300,000
June 2010 $ 893,200
Shipping cost:
June 2008 $ 12,000
June 2009 $ 20,000
June 2010 $ 200,000
I am lead to believe the gold bearing material already left Ghana and Madagascar. Also the annual storage fee is $100,000 USD for a small storage space. Very interesting.
The following is summary of PRMO's gold sale:
July 2008 / 50kg (smelted) $1.25M for profit $0.95M @76%
Oct & Nov 2008/150kg(Gold bearing material)$3M profit $0.49M @ 16%
June 2010/unknown kg & material, $6.17M for profit $2.3M @ 37%
Sept 2010/unknown kg & material, $4.11M for profit $3.01M @ 73%
Total sale = $14,565,000
Total net profit = $6,760,000 @ 46% net profit
The profit range from 16% to 76%. A big different from raw gold bearing material and smelted pure gold . This demonstrate the significant of proposed gold refinery deal.
Also the total tonnage sold is approximately 600kg to 700kg. PRMO reported inventory 5000kg in Dec 2008, 6100 kg in June 2009. Probably more than 10,000kg at this point in time.
10,000 - 700 = 9,300kg
My estimated current inventory is ~9,300kg
9300kg/700kg x $6,760,000 = $89,800,000 net profit
It is safe to say the inventory can generate ~$90M net profit. With the proposed gold refinery, it worth much more. This justify my assumption that PRMO management is sitting on a huge inventory. All IMO.
Gerald's son.
You can only buy up to 8.4B, the O/S. The rest, 12.1B is controlled by Tony. He won't sell it to you. Thus you cannot buy them all, even if you have $2.05M.
Also 1.5B out of the 8.4B is owned by the management. Your hostile take over plan won't work. :o(
1. If they own about 1.5B shares themselves, why they had to increase A/S to 20B? Increasing A/S is a bad business, IMHO.
They are raising fund from selling more shares. The O/S is between 8.4B to 10.3B. They double up the A/S to 20.5 to avoid hostile take over. To make sure no one buy out this company. IMO.
2. Increasing A/S and holding that many shares means they are decreasing their own value themselves. This is puzzling to me.
Yes, their own value goes down. So, they need to keep it at 0.0001, so that they can re-load more share. I am just guessing.
All IMO.
It seems the management is satisfied with the 0.0001-0.0002. They could have done more promotion to put the pps to respectful level. But they chose not to do anything. This is their business plan. They have their own agenda.
Looking back to ABFG/PRMO's track record, management had two major promotion. The first one was in summer 2007, after the R/S, there were lots of advertisement, new staffs and PRs. The second was in summer 2008, several PRs on gold shipments and sales, financial reports and new staffs. Then it went into hibernation
in 2009 & 2010.
According to financial reports, lots of things have been happening in the last 2 years. They could have send several PRs to update the business. They chose to send un-audited annual financial report only. Obviously, they want to keep the pps as low as possible, so that they can load the boat. They now own 1.5B common shares and 350,000 preferred shares. They may want to load more.
As I wrote before, management is sitting on a huge inventory with un-announced quantity and quality. Shareholders cannot benefit from it unless management release these information. IMO.
840,000,000 x 0.0002 = $168,000 USD
If I got $168,000 cash, I would buy gold coins today at $1410 and sit on it until $2000. :o)
Quote from Dec 29, 2010 PR: "The company expects to increase production and inventory in fiscal year 2011 and while continuing our program of selling gold material that was held back on our second quarter for tax reasons."
Gold index is at $1413 today. PRMO must be selling. Need PR for each gold sale. This is the way to promote PRMO.
IMO.
Good question. They stop selling gold in second quarter of 2010 for tax reasons. They could have sell more gold, pay more tax and have better cash flow in hand.
However, they chose to raise fund by selling shares and acquire loan from principal. Also sold 350,000 preferred share to principal to raise $3,500,000 in 2010. It is mystery.
They purposely removed the inventory tonnage from June & Sept 2010 financial reports. It is mystery.
They have been producing gold more than 2 years. They claimed they do not know the gold content and grade of the gold bearing material. So, they don't know what they are producing. It is mystery.
They have been buying gold bearing material from villagers. They do not know the gold content and grade too. It is mystery.
So, they know nothing about the inventory. Why would they pay $100,000 USD annually for storage fee, if it only worth very little? The question is, what is the market value of the inventory? What is the market value of PRMO? The investors want to know this vital information, the pps will reflect this market value accordingly. IMO.
PRMO management is sitting on a huge inventory with unknown quantity, quality and market value.
My question is: how do share holders benefit from it?
This is extremely unusually business plan. I searched other gold mining companies. Most of them announce the estimated pure gold tonnage found in the ground. They are trading at pennies. There is no secret to these type of operations.
They haven't disclosed the market value of the inventory. On the financial report, only the "at cost " was reported. It meets requirement of financial report. They reported the lower of "at cost" or "market value". Thus the $15.3 M at cost is perfectly okay from reporting perspective.
However, they purposely removed the tonnage of gold bearing material from June and Sept 2010 reports. Also no info about gold content and grade. Thus the market value of inventory cannot be estimated. This is my point. They must disclose these data for investors. Otherwise, they don't worth a dime.
In resources mining industry, the quantity in reserve is the utmost important piece of information that can drive the pps upward. For oil exploration company, people wants to know the number of barrel of oil found in the ground. In gold mining industry, people want to know the tonnage of pure gold found in the ground.
In PRMO's case, they are reluctant to disclose the pure gold tonnage in inventory, the shareholders cannot benefit from it.
The pps will stay at triple zero. My question is, how do we shareholders benefit from the inventory?
If management decides to sell the entire inventory in one selling order, results in huge dividend. The preferred share holders will benefit the most. They will take a big chunk of the profit, since they have first priority in taking the profit.
All IMO.
Quote:"So you think they have roughly 3,600 ounces of gold in thier security vault/hut/box that they pay $100K pr annum for protection?"
I believe PRMO has a huge gold inventory. According to financial reports, 5000kg by Dec 2008, 6100kg by June 2009. Unfortunately they removed the tonnage from June 2010 and Sept 2010 reports. However, if production rate is consistent, there should be more than 10,000kg in inventory at this point in time.
10,000kg x 32.15 oz/kg = 321,500 oz at 91.3% gold content
321,500 x 0.913 = 293,530 troy oz pure gold
So, it is safe to say PRMO has 300,000 troy oz pure gold. If their previous reports/PRs/datas are true and consistent.
The market value of inventory at today's price ~$1400 is:
300,000 x 1400 = $420,000,000 USD (corporate income tax and export tax are not include in the calculation)
The above calculation consists of optimistic assumptions. However, it gives you ballpark estimates on the market value of PRMO. It is huge. All IMO.
PRMO is paying $100,000 USD annually for storage fee of the inventory. This is big time money in third world country. Imagine a storage space of approximately 1/4 gravel truck box, it is a small storage space. The value of the inventory must be huge.
As I wrote before, PRMO needs to disclose the market value of the inventory. Tonnage of pure gold, grade and gold content. IMO.
Some people have difficulty buying at 0.0001 in the last few weeks. Although transaction at 0.0001, which probably MMs game.
It seems 0.0002 will have better chance. Good luck.
$0.01 is achievable, if PRMO can prove what they put on all reports. My calculation is as follow:
8,400,000,000 OS x $0.01/share = $84,000,000
First quarter net profit = $3,000,000
$84,000,000 / $3,000,000 = 28
If PRMO can generate 28 sales equivalent to first quarter 2010, you can get $0.01 pps theoretically. So, it is achievable.
The question is, do PRMO own sufficient gold for the 28 sales? This is yet to be proved by PRMO management.
Good luck.
I mean "Go for it".
Dror's term as CEO/President with PRMO expires this year. This is the best chance to put new blood into this organization.
Do for it.
No need to sell at $1400 or higher. PRMO's producing cost is ~$320/oz, as compared to ~$450/oz for Barr**k.
PRMO's producing cost is approximately 25%, according to first quarterly report. It was sold at ~$1275.
$1275 x 0.25 = $320/oz (corporate income tax not included)
Obviously, PRMO is selling, according to Dec 20&29 PR.
If management want to push pps higher, they should send PR immediately after each gold sale. IMO.
Please let me explain the preferred share situation. In the event that PROM is sold or a major net profit results in dividend, the preferred share holders has first priority to receive dividend. The left over money goes to common share holders.
Secondly, the preferred shares are $10/share. They are convertible. It is equivalent to millions of common shares if it is converted. You will be surprised that they will grab a big chunk of the dividend before we, common shares can touch the balance of the profit.
I am not an accountant, I hope someone can shed some light on this issue.
In conclusion, buy out or big profit results in dividend, preferred share get a big chunk of the $.
Quote:" I think it could be a number of things why he isn't sending out PRs. Gold is at 1413 right now and he might have a price target to really break the news."
I understand the logic for the above. However, from other perspective, may be they can start selling at this reasonably high price. As price goes up, we keep selling. We won't miss these good prices. Just in case the price take a drastic drop, we won't miss the boat.
You never know about the gold price. It may drop like a falling rock. It may go back down to $500/oz. I think PRMO should have a selling program to take advantage of the record high prices. All IMO.
On the other hand, it would be nice if we hold until it hit $2000. How about $3000. :o)
You are correct. Management and principal own 1.5B common shares and 350,000 preferred shares. If pps goes up , they are rich. If dividend or buy out, they have priority for dividend for their preferred share. They are rich also. So, they are covered from both ends.
It seems they are not pushing for higher pps. Is means they probably going for the second option, which is dividend or buy out, in which they will get a big chunk of the profit. Not much left for common share holder.
I am just guessing. All IMO.
This is once in a life time opportunity for PRMO to catch up with the rest of gold mining industry. Gold index at $1413, close to historical high of $1426.
PRMO must be selling. Time for PR for each sale. Also another PR to update gold refinery negotiation. More PR on inventory details and production rate.
PRMO's business plan need to focus on promotion. Multiple PR will do the trick. IMO.
I agree. Gold is at all time high. There is no sign from PRMO management that they want to promote this stock. No word from gold refinery deal after 8 weeks. No word on more gold sale in third quarter as promised on Dec 2010 PR. No word on production rate. No word on inventory status.
Third quarter is 2/3 gone. Any progress? Any gold sale? Need PR please.
Quote:" is this a real company? And are the revenues real (over $ 3 million in net profit per quarter)? "
I wish I have the answer. I am still struggling with the un-auditted financial reports.
I guess these financial reports and PRs are published by PRMO management and published through media. Management is held accountable for all materials on these reports.
The Dec 2010 PR clearly explained the Gross Profit and Net Profit from first quarter between July 1 to Sept 30, 2010 gold sales. They claimed they will sell more, produce more amd inventory is expected to increase. I hope they can prove them through auditted reports and recent photos of the mining operations to show the world that they are real. IMO.
It has been 8 weeks since Dec 29 PR about the proposed gold refinery negotiation. No deal?
Quote:" What are they hiding? Why won't they answer their phone messages from shareholders? Why won't they answer their emails from shareholders? "
First of all, they are hiding lots of vital informations. Such as Ghana mining operations details, mine production rate, gold bearing material inventory detailed info, $4.5M equipment details such as locations and photos, jewlery/gems exploration and marketting.
It seems some kind of phone answering services in Florida is taking messages for Dror. The mining operations are in third world countries. Very little activity in Florida. This is understandable for this answering service arrangement.
I imagine there has been hundreds of e-mail messages being sent to Dror's attention. He only replied twice in the last 3 year. His reply in December 2010 is a positive sign of improvement in communicating with shareholders. Hopefully more e-mail reply in near future. (I can only hope.)
Quote:" Why did they increase share count to 20 Billion"
My explanation is that when PRMO's OS reached close to 10B, they ensure the AS is double the OS amount. This can avoid hostile take over. It seems they are worrying someone may try to buy out.
The current OS is 8.4B. There is rumor it has been increased to 10.3B The AS is 20.5B. Theoretically, no chance for hostile take over. This is just my opinion.
Hopefully PRMO management learn from their mistakes and become better leader from now on.
Gold index is at $1403, challenging historical high of $1426. This is once in a life time opportunity for PRMO to shine. If shareholders make money, management should make money too. Let's sell more gold and be happy.
One of the first things PRMO management need to do is to update the web site. Lots of changes in the last 3 years.
$4.5 M equipment. Mining in Ghana. Office in Madagascar & Thailand. New COO, geologist and mining engineer and huge inventory.
Quote: " Enough is enough and lets find out how much gold they have. I think all shareholders, new and old, have been more than patient."
This is exactly what I have been going after PRMO management. This is vital information for any gold mining company to be successful. The investors are interested in the total estimated tonnage in inventory and in the ground. So that people can estimate the market value of PRMO. Investors can bid accordingly. PPS will reflect the market value of PRMO. I think it should be in pennies, if PRMO can prove what they claim in financial reports and PRs.
IMO.
1,000,000,000 x 0.0002 = $200,000
Yes, they can retire 1B share with $200,000. It is peanuts as compared to their annual income in 2010.
If PRMO sell more gold as promised in Dec 2010 PR, sell at today's price $1403. Cash flow will definitely improve.
Middle East is in turmoil, most countries are in heavy debt, most governments are printing paper money like crazy. Paper money will worth less and less. Gold will shine more in near future. It is challenging $1500. IMO.
This is once in a life time opportunity. All ingredients are in place, just put them in a pot and start cooking.
Show me the main course. :0)
Another possibility of the 25,725,000 is company buy back. This is the best scenario.
Gold index is getting close to $1400. If PRMO sell more gold as promised on Dec 2010 PR, may have sufficient cash flow to start buy back program.
Next quarterly report will be interesting to see the share structure. It will clarify the rumor about increasing OS to 10.3B, or company buy back.
I guess the 25,725,000 is MM passing the ball. Sometimes they try to stir things up.