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The inventory as stated on financial report is at COST. Thus the market value is much higher. PRMO can sell it for more $.
The longs are holding. The flippers are waiting. It's calm before storm. IMO.
Thank you for your input. I need time to think about your suggestions. I am glad that you agree to the fact that the "$15,315,000 inventory" on the financial report is at COST. I feel much better now that PRMO owns a stockpile that worth much more than $15M.
In first quarter, PRMO sold gold for $4M at $1235, which is equal to ~ 103kg pure gold. Imagine the amount of 9000kg gold bearing material can turn into thousands of kgs of pure gold.
It is simple math.
I have read June 2010 Financial Report several times. On page 27, the paragraph about "Valuation of Inventory" is very interesting. It says " Inventory is stated at the lower of cost, determined by the specific-identification method, or market. Inventory consists principally of purchased gold bearing material and mined gold bearing material."
June 2008 Financial Report Inventory is estimated @ $4,715,000.
June 2009 ........................................@ $7,232,472.
June 2010 ........................................@$12,300,000.
Sept 2010 ........................................@$15,315,000.
My point is the above estimation is at COST. Thus they are not the market value. It can be sold at much higher price. Depends on the purity of gold bearing material and current gold price.
The inventory was 6100kg in June 2009. It should be more than 9000kg by now. What is the market value of this stockpile? If PRMO can tell public the estimated present value of inventory, it sure help.
My calculation based on the above assumption:
9000kg x 32.15oz/kg x $1400 = $405,090,000 pure gold
or = $202,545,000 for 50 % gold content
or = $ 40,509,000 for 10 % gold content
All in my opinion. Correct me if I am wrong.
Quote from 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 now @ $1418. A few hours ago was $1423, almost at all time high of $1426. With the proposed gold refinery, PRMO is going to fly. IMO.
Quote " Anyone know what extraction/production costs per ounze are for PRMO? Gotta be pretty low with Madagascan labour?! "
The recent financials and PR talked about revenue and net profit only. No indication of the tonnage/weight/production rate of gold sold.
However, the Dec 20 PR stated that $4M revenue, $1M operating cost and $3M net profit. Average gold was $1235/troy ounce. I have done a simple calculation, see if it make sense:
Revenue - Operating expense = Net Profit
$4,115,124 - $1,105,330 = $3,009,794
$4,115,124 / $1235 per troy ounce = 3333 troy ounce was sold (pure gold)
Operating cost = $1,105,330 / 3333 ounce = $331 / ounce
Since 1 kg = 32.15 troy ounce
Thus 3333 ounce / 32.15 = 103 kg pure gold was sold in first quarter.
It is as clear as mud. IMO. :)
Madagascar will have a presidential election in May 2011. The current DJ President may or may not be allowed to run the election. In any case, the political situation in the island is extremely unstable for a long time. However, the government is trying very hard to generate revenue from export / mining industry. Hopefully, it helps PRMO.
Ghana is relatively stable politic-wise. Gold mining/export industry is huge.
PRMO's source of gold is from mining and purchasing from villagers. PRMO has good relationship with villagers, it definitely helps in long run. The $4 M equipment is producing consistently. The production rate will increase in 2011 according to the recent PR. With the record high gold index, PRMO is very promising.
The share structure is a concern. 8.4 B common share and 3.5 M preferred share. I think if PRMO starts buying back in near future, if definitely helps. IMO. I expect improved cash flow in 2011, hopefully it will happen soon.
I have read James West's article, his prediction is that old will hit $1700 by end of 2011. PRMO's net profit will grow significantly at this price level.
Nice paint job.
Gold index is @$1419, challenging all time high of $1426 and gearing up for a run in 2011. IMO.
US dollar is dropping. US government is printing paper money to pay the soldier and bullets. Gold is going to hit $1500 soon. IMO.
I hope the new PR about closing the refinery deal will come out 10 minutes before closing.
Happy New Year.
On July 24, 2007, after reverse split 200:1, trading started at 0.04 (from 0.0002 on July 23). It went as high as 0.42 on August 3, 2007.
Right after R/S 200:1, trading changed from 0.0002 to 0.04 on the same day as announced by PRMO on July 24, 2007. Hope it won't happen again.
I am still struggling with the $15,315,000 inventory. Does it refer to the 6100 kg inventory as stated in June 2009 Financial report? If it is the case, it seems to me that it worth much more than $15M. Hope someone can shed some light on it.
The first quarter gold export revenue was $4Million, it generated $3M net profit. The future operating cost will be less due to ownership of refinery, results in higher profit.It is looking good. IMO.
Once PRMO close the deal with the refinery, it will be a smooth sail, from mining, stockpiling, processing, refining and exporting. Safe money and time. Another PR is coming soon. IMO.
100,000,000 in 2 hours. It is great, especially near year end. Lots of people are on vacation or getting ready for new years eve party.
Quote From Dror:" We will PR some exciting news when certain transactions we work on materialize."
There has been 2 PRs in just 9 days. Dror will likely send another PR once the deal is signed. I like the multiple PR strategy. It comes in waves in order to build momentum.
PRMO is also expanding the perimeters and looking for jewelery market.
Quote from 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. "
There was minimal gold sell in second quarter. The gold bearing inventory must have been growing significantly. It was 5000kg in Dec 2008, 6100kg in June 2009, probably close to 10000kg by now. The production rate will increase too.
With the proposed ownership of refinery, the third quarter gold sell must be enormous. Gold index is at record high and seems to stay at relatively high ground for a while. It's looking good.
With possible 9400 kg gold bearing material in stockpile readily to ship to our own refinery, gold index is at all time high, PRMO is expanding for more perimeters, exploring jewelery market, increasing production/inventory/gold sell volume and carefully planned tax strategy. We are flying to the MOON.
Quote From Dror:" We will PR some exciting news when certain transactions we work on materialize."
This PR is definitely an exciting news as promised by Dror. He is taking one step at a time. Carefully planned and executed. The gold bearing material in inventory will be refined in our own refinery, instead of running around Thailand and Germany to look for refinery. It is cost effective and smoother operation. Results in higher profit. IMO.
It is going to fly. Go PRMO Go.
The investors are interested drilling results for mining companies. They drill hundreds of holes within the perimeters, take samples, verify with a qualified lab to determine the grade of the gold ore, estimate the total amount of gold reserve in the ground. The PPS will reflect the value of the company even without production.
PRMO should be able to provide these data. Simply tell public the estimated value of the company. With the future expansion plan, it will fly.
Quote: " We will PR some exciting news when certain transactions we work on materialize. "
No one knows what transactions they are working on. PRMO has been producing and selling gold consistently. It is gaining credibility in the mining industry. The financial report stated that it is expanding.
Expanding into other country like Nigeria would be "exciting news". Since our COO has connection in Nigeria gold mining industry.
Other exciting news would be merger with a senior mining company. Our 5 years gold reserve and perimeters in both Ghana and Madagascar are attractive to these companies.
Regular shipment is also exciting news. It seems that PRMO CEO has got a game plan in-place. Time to execute.
IMO
I really want to verify the value of the inventory. PRMO acquired 5000 kg by December 2008. It was increased to 6100 by June 2009. Gold index was ~ $900. PRMO management decided to keep the inventory until higher prices. Which is at $1405 today. It is almost 50% increase. What is the present value?
If inventory increased by 1100 kg in half a year, it should gain 3300 kg from June 2009 to December 2010 (1 1/2 years). Thus the current inventory should be around 9400 kg.
According to financial report, they are ready to liquid. It is as good as cash.
First quarter report said $4 M revenue and $3 M net profit. How much (in weight) gold bearing material was sold?
The quality of the gold bearing material has never been published. Difficult to estimate to present value.
Lots of question to be answered.
I understand that 6100 kg inventory is not pure gold. However, if it only worth $15,000,000, it is too low.
The first quarter gold sold was $4 million worth, net profit was $3 Million.
I recall Oct. 2008 gold sold was 100 kg, it was sold for $1.9 M. So I think the first quarter gold sold was around 150kg.
That is why I kept saying that 6100kg worth much more than $15 M. IMO.
The gold inventory @ $15,315,000 need clarification. Does it refer to 6100kg as stated on June 2009 financial report?
In October 2008, PRMO sold 100 kg gold bearing material for $1,927,000, gold index was ~850/ounce. The Sept. 2010 report revenue of $4,115,124. Net profit was ~$3,000,000. GOld index was ~$1250. The gold sold should be ~ 150kg. Thus the 6100 kg material worth a lot more than $15,315,000. IMO.
I am confused. Hope someone can shed some light on it.
According to previous financial reports, the gold bearing material inventory has been increasing as follow:
Dec.31, 2008 @ 5000 kg
June 30, 2009 @ 6100 kg
Based on the above, the current inventory is probably more than 9000kg. IMO. Gold index is moving up and getting close to $1400 again. The second quarter financial report is looking good.
No one knows exactly the content of the gold bearing material except the CEO and internal staffs. It has never made public information. My calculation was based on ideal situation, i.e. pure gold. It is unlikely that it is pure gold.
According to October, 2008, gold sold by PRMO. 100 kg was sold for $1,927,000 revenue. The gold index at that particular time was ~$800/ounce. So, it seems that the gold bearing material contents pretty high percentage of gold. IMO.
Anyways, like I said, anything is possible.
However, if PRMO really has 6100 kg inventory, mining/producing gold bearing material continuously, inventory will increase as they claim, looking for additional perimeters, exploring gems/jewelery market and all other promises, I think they are looking for bigger fish. IMHO.
They bought them shares in 2009. I assume their average was 0.0001. Say, they sell it a couple weeks ago at 0.0003 for a gain of 0.0002. For total 1.5 billion shares that they own, it is only $300,000 for them to share. It is peanuts. I don't think they would gone through all these hassles for only 300K. IMO.
But, anything is possible.
I agree. No more R/S.
The CEO and directors already loaded the boat. Why border to R/S and re-load again.
I believe they have a game plan in-place. It is time to execute.
IMO.
According to the 2009/10 financial reports, PRMO has 6100 kg of gold bearing material in inventory. Management has decided to wait till higher gold price. It seems that this is the time which gold index is at ~$1380. So, I did a simple calculation assuming that if PRMO sell all inventory today, the present value (net profit) of the 6100 kg gold would be $207.4 million based on $1380.
I am not familiar with share structure calculation. I try a simple calculation, see if it make sense.
Net profit = $207.4 Million
Total share = 8.4 Billion
$207.4 M / 8.4 Billion = $0.024 / share
Theoretically each share will receive $0.024 dividend. Please correct me if I am wrong.
IMO
According to June 2010 Financial, page 4, Business Activities said:
In 2008, we acquired an inventory of gold bearing material. It was management decision to keep inventorying this material, until price of gold increased.
The 6100 kg inventory was recorded in June 2009 Financial report. I have no doubt that it is still available. There is possibility that the total quantity has been increased. The actual amount has not been published.
IMO
That is even better. Revised calculation:
3300 Troy ounce x $1380 = $4.5 M (i.e. per 100 kg)
Total value is 61 x $4.5 M = 274.5 M
Total net profit is 61 x $3.4 M = $207.4 M
I am much happier now. Thanks.
I have done some mathematics. The recent PR said $1235 per troy ounce of gold sold in first quarter. It generates $4.1 M revenue. It works out to be ~ 3300 troy ounce or ~ 100 kg gold bearing material was sold. PRMO's inventory is around 6100 kg.
The total value at today's gold price is $4.1 M x 61 = $250 M
The total net profit is $3M x 61 = $183 M
According to our CEO, PRMO's production rate and inventory will increase in 2011. Also sale of gold will continue.
I am happy with these numbers. Please correct me if I am wrong.
IMHO
Higher gold price definitely help, since the producing cost is pretty much fixed. I expect the second quarter revenue to be higher.
The gold index in first quarter was ~ $1280. It is now ~$1380 for second quarter. It seems that gold price will be at relatively high level in foreseeable future. If the governments keep printing more paper money and do not control expenditure, gold price will be promising.
IMHO
Let me repeat my message earlier this morning as follow:
I found the following from pinksheets.com.
There are 8 classes ranked by Pinksheet:
OTCQX (Highest ranking)
OTCQB
OTCBB
Pinksheets Current
Pinksheets Limited (PRMO is at this level, Yield Sign)
Pinksheets No Information (Stop sign)
Upgrade Your OTC Tiers (Grey)
Caveat Emptor (Skeleton,PRMO was at this level about 1.5 years ago.)
PRMO has been upgraded from "Skeleton" to "Yield". It is a significant progress. If we move one or two more steps upward, we will be okay.
2010 Financial Report. Page 7, Item 1, Section (a), Common Stocks.
The CEO and directors are loaded with ~1.5 B shares. Dinner will be served shortly.