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Excelent post by Rock:
"I had estimated that gold produced / sold in Q3 would be around 17,000 oz.
I arrived at this by assuming 3000 tpd for the plant @ 2.22 gms/ton X 90 days X 91 % recovery Div by 31 gms which equals 17,600 oz.
I assumed a day or so of downtime and rounded my estimate off at 17,000 oz.
The actual production was 16,500 oz, which meant that they had a day or more downtime than I had extimated.
After reading the Q3 report in detail and calling, that was in fact the case.
I knew they were stockpiling ore for the heap leach pads,and had I read the Q2 report more carefully, I would have realized that they were also stockpiling ore for the main mill for downtime ( about a month or so ).
This stockpiling ( about 3500 oz in Q3 ) reduced the gold sales in Q3 to 13,800 oz or just above that of Q2.
Had the heap leach pads been in operation in Q3 ( ie no stockpiling ) , gold production and gold sales would have been the same .......ie about 27,500 oz .............which is an annual production of 110,000 oz.
Looking forward to Q4 and beyond, PTQ is going to show large increases in production for 3 reasons........
.............Firstly ,pre-stripping at the mine progressed during the third quarter of the fiscal year at the Main Zone area of the open pit and are anticipating the availability of 245,000 tones of ore with 3.04 g/t of gold contained, meaning approximately 24,000 ounces of gold that is going to be processed at the Plant during Q4.
..........daily mining rate was 7500 tpd in Q3. This is going to increase substantially over the next 2 quarters.
The reason is that late in Q3 PDI began to receive the first group of heavy equipment acquired through the long term debt facility with a leading financial institution in Panama. Deliveries of this equipment will take place until June 2011. At that time, the daily mining rate will have increased from 7500 tpd in Q3 to 40,000 tpd.
...........once the heap plant opens in Sept 2011, stockpiling will cease and PTQ will be delivering 40,000 tpd to its two plants.
Of this 40,000 tpd, 5000 tpd will be the higher grade ore that will be milled thru the current ball mill,and the remainder will be used to keep the heap leach pads fully supplied with the low grade ore.
At that time, PTQ's annual production will rise to 150,000 + oz per year.
The calculations are elementary......................Main Mill /// 325 days X 5000 tpd X 2.22 gms/ton X 91 % recovery divided by 31 gms = 106,000 oz per year
........................PLUS Heap leach //// 325 days X 35000 tpd X 0.26 gms/ton X 50 % recovery divided by 31 gms = 48,000 oz per total..
Total estimated production from both plants combined adds up to 154,000 oz per year.
Note that I have used 40 days of downtime and have assumed the average pit grade.
Miners tend to mine the higher zones first where that is possible.
This seems obviously the case at Molejon where the average grade of the 245,000 tones of ore stripped for mining in Q4 was 3.04 g/t of gold
What does this mean for Q4 of F2011 production ?
Using linear interpolation of mining rate increase to June 2011 ( 7500 tpd to 40,000 tpd ) I arrive at about 3500 tpd for the main pit and about 20,000 tpd for the heap leach stock pile.
Assuming 2-3 days of downtime, I arrive at about 25,000 oz 26,000 oz for the main pit.
22,000 oz of this is assured due to the prestripping work in Q3.
One months stockpile for the main mill is about 9000 oz ( 9000 X12 = 108,000 oz ). They already have about 5000 oz in that stockpile, so another 4000-5000 oz stockpiled in Q4 should do it.
That means 20,000+ oz should be available for sale in Q4 /F11which should increase again in Q1 of F2012 until we reach about 150,000 oz /year when the heap leach becomes operational in Q2 of 2012.
One note on PDI.
It continues to increase its aggregate stockpile for sale. It will get the full mining contract for both plants later this year and will then be ready to spin out.
Its a given that they will also be the main infrastucure contractor for the massive Cobre mine
Finally, once at full capacity, cash costs will decrease to the $550 to $600 per oz range as forecasted by management.
That they declined to $730 per oz in Q3 despite all that hauling stockpiling and prestripping is very impressive.
Had they been able to sell those 27,500 oz, cash costs clearly would have been spot on target.
Summary
PTQ hit a production runrate in excess of 100,000 oz in Q3. Stockpiling of mined ore reduced the runrate to about 68,000 oz of gold availble for sale.
Q4 of F2011 ( March to May 2011 ) will show a substantial increase in mined ore due to the ramping up of the mining rate as aconsequence of PDI's equipment capability.
Gold mined in the main pit in Q4 will exceed 25,000 oz and gold sales should be 20,000 oz or a bit higher.
Cash costs are going to continue to decline and should be in the $650-$675 range for Q4 dropping to $550 -$600 oz per ton by Q2/F 2012.
Management have done a poor job of communicating this to shareholders ( calling them is recced ) altho the details are provided in the Quarterly reports , if you look hard enough ( who does ! ).
In other words, PTQ should be cash flowing about $15 million this quarter, rising to about $110 million at full production potential in Q3 of F2012.
Its a steal at these prices and I have been adding substantially to my position."
I tell you why:
1) 500K shares = 20 people , small investors without vision…
2) We still under radar, company will start advertise us in due time.
What separates a great entrepreneur or investor from the crowd – is THE VISION.
I work for fortune 500 company and when we set-up satellite shops all over the world – it takes them a year to get production up the speed . And that after people were taught and trained how – there are a lot of things which have to be work-out and iron-out.
Here we have opportunity to participate in first Panama mine, supported by the government, debt free, adding resources with impending acquisition, producing and making profit, building Hl, re-configuring pit, adding new capacity, spinning PDI…etc…
… and all we are worrying about lousy 350K shares which dropped us 7%.
Big money which own millions of this shares are not selling ! They know better, they have VISION!
Few people on this board have a vision, the rest and a few silent hundred who read this board and decided to sell – Thank you from the bottom of my heart, I could never dream were able to get this shares for $.85.
Salvo , can you do your magic and keep this price for me until tomorrow? What a gift ! TG
I nominate your post as "Best post of the day" by Analitico Lojiko.
for those whom matter:
Happy Passover !
Jal, you are making my point . Why can’t we wait until then before criticizing the company? By the way my other silver stock companes went down today also. It is a bad day for US stock when S&P downgrades our credit rating. There are only 17 countries in the world with AAA rating, but none of them have negative rating.
If Congress will not adopt republican proposal – watch out silver and gold go ballistic
I am thinking, did stop by a few years ago just for one day tour. What about crime? and medical expenses...
Nice to hear from you. I did not know they have a hotel with internet in a jungle.
Little OT question ( you don’t have to answer). Don’t you miss good ‘ole USA?
Football game in a winter, baseball hot dog/ beer in a summer ?
Yes Anski, this company has so much potential with Iberian and PDI. Can it go bust – of cause it can , but so is every stock company , and especially junior.
But I will take my chances with National Pride of Panama,
with possible additional gold in ODN or IR ,
with PDI contracts with Minera and etc..
Badge, I posted on Sunday that I also don’t think we went institutional. PTQ is unknown to global investing community, but it will get quick attention if it becomes 100K oz producer, IMO. Today action is sell-off across all markets ; I would not worry about it.
Yes, Q- numbers not as exciting as we would like to be, but Anski’s post list all task they have to accomplish and it does takes time. We have to give them credit for what they did manage to do, in jungle, no roads, power, etc… “Rome wasn’t built in one day “.
Badge , just like you I have a time line and want to make money also, but I am willing to wait till next year for them to start produce aprox. 7K oz a month on regular basis, by that time HL should go on line and things will become clear .
Patience a grasshopper; o)
Here is a difference, Pershimco or Petaquilla:
FIGHT. Santeño Front Against Mining (Fresacomi) initiated protests against the mining project in Cerro Quema, located between the districts and Tonosí Macaracas, province of Los Santos.
The action took place in the community of River Burn, Tonosí district, where supporters of this organization held a rally to kick off the demonstrations against the draft in the open.
Arturo Moreno, the Fresacomi, said this meeting is the first ro of the actions that are organizing to demand the Government to close the Cerro Quema project. The concessionaire Pershimco Resources announced that its gold mining start in January 2012.
..by Trader Dan :
"Hedge Fund Ratio Spread Trades Continue to Distort the Value of the Mining Shares
I hope to have further on this topic sometime this weekend depending on time constraints but I wanted to at least get some charts up to demonstrate how severely undervalued many of the mining shares are in relation to the underlying metal as a result of the plying of this particular trading strategy.
One of the factors that I believe are involved with this severe underperformance of the shares in general is the advent of the ETF's. Those who want LEVERAGED EXPOSURE to either or both gold and silver can now use the ETF's to do so.
Formerly, there were two methods available - commodity futures or mining shares. Since the charters of some funds prevents them from investing or trading in commodity futures, funds who wanted this leveraged exposure to the metals were forced to go into the mining shares in the past. That implied that bull markets in the metals were going to see substantial money flows coming into the shares.
Since the ETF's came along, those institutions looking for leveraged exposure to gold can now directly purchase the silver or gold ETF's instead and margin those up to obtain leverage. In other words, they are no longer captive to using only the mining shares.
Additionally, the hedge funds, which have proliferated like mushrooms after a summer rain, are able to offer prospective clients exposure to the commodity markets since there is nothing in their charters preventing them from investing in the commodity markets. That attracts further funds that in time past would have flowed into the mining sector directly.
Keep in mind what is necessary to drive prices higher - sustained investment flows. Now, if the investment flows that formerly would be diverted directly to the mining shares have been split and are now moving directly into the commodity futures markets and the ETF's, that pulls a portion away from the shares. That means that there is a bit of an exploitable weakness, a chink in the armor if you will, in the sense that the amount of firepower coming into the shares, is weaker when compared to the other alternative forums for investing in the precious metals.
The hedge funds understanding this then employ a strategy designed to take advantage of the "weaker sister" which suffers somewhat from the smaller money flows heading its direction - they short some of the mining shares while buying the commodity futures and the ETF's. That selling then further absorbs the buying interest that is still heading into the mining sector shares.
The reason they do this is because it helps them manage their risk. When the market sells off in this volatile environment, they are able to profit from the short leg of this trade as the shares head lower generally at a faster rate than the metals themselves do. In other words, they might be losing $1.00 on their long gold or silver positions in the futures or ETF's, but making $1.10 - $1.20 on their short share position. In effect, they have a permanent put option.
This trade has been extremely effective for them which is why they seemingly refuse to give it up but at some point, the effect is to so distort the price of the mining shares in relation to the underlying metal, that something has to snap to bring the share price back in line to historical norms. After all, the higher the metals run in price, the more profitable the well run miners become. Stock prices are eventually determined by profits - Eventually some of the hedge funds plying this trade will begin to realize that they are pushing the trade too far and will begin to exit. That will set off a rush by the others to do the same.
We got a brief taste of this April 5 of this year when the HUI shot up nearly 30 points in a single day. That was the first sign that the days of this trade are drawing to a close. There is an old adage in the trading world which is apropos for this situation:
Bulls make money; Bears make money; but Pigs get slaughtered.
Hedgies beware. The time is coming when there are not going to be any sellers on the other side of your trade when you need to unwind it.
DVM , welcome back, did you take time reading Iberian presentation? There is much more gold to be discover... any way I am glad to hear from you .
Mjk, other than full moon on 18-th , I don’t see why can’t you post between Passover and Easter?
Just kidding , will be missing your analysis.
Now you and me on a same page ;o)
Mjk, are you telling me that unlike USA tax law, Panama taxes individual on amount of wealth / shares they have every year? Regardless, I would venture to say that average shareholder still would like to see the price of stock slowly climbing up.
I am not complaining, for now $ 1 price gives opportunity to load up some more for those willing, but eventually I am counting on making some real $$$$. I am not wealthy enough to let this stock hang around for $2 forever.
Of cause PTQ is pouring gold, growing and making money for the management and everyone on BD.
But from shareholder point of view - what is there for me ?
It is somewhat easy for you to see whole picture : you live there , you know People there, you understand inter-workings better than most of us.
But “ us” ? From my personal perspective : I /we invested in a Penny stock ( yes, PTQ was a penny stock) and I/we took a huge risk investing thousands of hard earn money in a far-away company, yes we did our DD and took calculating risk and now would like to be rewarded accordingly.
I am not saying today, but as company is becoming 150K oz producer – the stock should reflect that.
I am not buying excuse of Venezuela, if country goes communist- they’ll nationalize any business big or small. And if Big Boys want to hide money – there are much better way to do it , like buying gold/platinum bullions and hide them from government.
At this point Panama looks like stable country , business people need to act like and take care of their shareholders , big and small.
Good afternoon Mjk and everyone.
To answer your posts- no doubt a lot of good things are happening with the company , but SP does not reflect that . And the problem with that , I think ,is luck of promotion .
Company is going international , but global investing community has no clue who we are..
If you open Gold Report : http://www.theaureport.com/ - here you’ll see The List of mining companies. Does Petaquilla is there? – No .
Does Petaquilla is mention in any mining publication- No.
So the question is – how or why management does not promote the company? I can give you bunch of examples where some analyst makes presentation about some dingy company which is still drilling, searching, etc and this report is all over the internet with stock running-up.… Why not us ?
Yes, big investors in Panama placed their money , made the bets , but that does not make us institutional.
We need to attract investments funds, may be management can invite a Journalist or Analyst, whatever needs to be done to let mining community know that we exist.
Last quarter we spent aprox. 500K on locals( which is good), maybe we need to hire advertising department or stock promotion company also.
Otherwise, same few thousand people are going to buy each other shares.
Absolutely!, My hat's off to the management team - what a great job ! Debt free plus profit in one year.
SP is a different story I think. When powers to be or in charge decide to take lid off this baby - we will shoot up as a rocket. In mean time buying this stock around a $1 still a gift, IMO.
Lo, welcome into "$10 in 5" camp, there are better stock to trade in and out then this one, PTQ is a long hold ( I agree), and if anyone listen - they can make a fortune in 5 years.
But of cause there are always save bets in NYSE where 7% a year can be easily made.
I am not advocating against those investments , opposite - part of portfolio should be invested in a secured and boring stocks and bonds.. And forget about them. ( Example: I don't participate on GE and DUK boards).
But here - where excitement is starts... Here - even poor scmack like me has a chance to make a little fortune, plus have some fun along the way, and pick the brains of some smart dudes ;0))
French proverb: "Those who risk - will drink champagne."
Gabbs, you live in Panama too? Gee-wiz.. How many people from Panama on the board? Stand-up..
Mjk, Manta, gabbs… who else?
Yesss sir, loves those rumors… I will rely on a latest one – May 30-th and will buy more shares, sweet smell of diesel fuel. Plus 5 year plan to build a fortune ;o)
Was watching grandkid playing a Nintendo DS: Little fish was swimming, avoiding the sharks and eating small fish to get bigger... hmm.. I liked that...
I am buying ...
Mante, stop by more often, pl.
Yes, acanuck gets a beer, I particularly like :
"The average value of the samples taken by the Company in Stope B were 42.23 g/t gold over 0.69 metres. A top cut of 60.0 g/t gold was applied to the calculation. These values, although slightly lower, compare favourably with those recorded by Connary and BRGM.
Continue mjk post with VB spin:
... Or if you don't have this kind of time and money, then rely on DB and Big Boys who invested millions. And make yourself a little fortune . How ? Ten - bag it :
Invest small money- 10K and turn it into 100 K in 5 years:
Assuming Global PTQ becoming 150K oz producer:
150000 x 900 : 280000000 x 10 = 4.82 +( 5% inflation x5 years = 1.20) = $6.00
+ PDI aprox. $ 2-3 + AMEX will push us to $10 !!!
Of cause sky is a limit 20 to 200, 50to 500 K ...
So here you have it ladies and gentleman , 10K to 100 K in 5 years... Go in the world and spread this good news ( did someone else said it before me ? )
Thanks, mjk
did you go to company new website ?
read new web presentation people
Nice presentation... where are Botija Abajo & Brazo located ?
We are going global, I did not joke saying "tearing-up mattress" investing in this baby, wait till baby matures...
DA !!!, I got tired of beating an old horse.. I will be a big fish in a pound, don't know about some of you ..
That’s right, they only pour 7k oz one month , so if other time PTQ pour 5-6 K oz – it would give us aprox. 17 K oz per Quarter, < Steady progress >as mjk put it.
Low volume ? – big money are locked in and happy and here ?- we are the volume.. Someone wants to sell me for $ 0.99 - I am buying tomorrow.
Do I care if gold goes to $ 1200 – no… DOW is down – is anyone with better investment out there ?
I want what you are having , ha-ha... Atlas? local brew?
All right Geico , sorry for misspell : Inmet,… but I would rather see you sharing your thoughts with the board then picking on my typing…. What do you think about PTQ future?
Kudo, what’s up with the ring, are you getting engage to Amish girl ? , by the way diamonds are going up in price also.
Salvo, welcome back. When will we hit $ 0.5 again so I can buy some?
Jal , I notice a negative undertone in your message. Ptq did not report yet ,but you already talking about excuses. I personally will be happy with aprox. 18000 oz mined.
I always believe : learn how to walk first ,before flying. And PTQ is walking fine, first they managed to maintain only 10 days 100K oz production,- now they managed one month ( 7K oz during Martinelli visit ). We are improving and if price falls – I am buying. In two years from now when PTQ is running on cocktails of Imelt attracting all kind of attention- we all wish were buyers now.
At your age ? !
I thought you are just a happy retiree rocking in a chair . What the heck are you doing building a road ?
In the news :
"We live in very volatile times; a correction could be 10%, 20%. I would on any weakness accumulate gold. The long-term outlook for gold is favorable," Faber commented.
This is a week !!!
Populace () is selling gold to “ buying your gold” stores. I’ve never see so many , like mushrooms.
Or maybe people need to survive and that is all they have – sad.
Mjk draws a very pessimistic picture, is there Hope? May be I buy a few cans of beans…
Except Lo, no one seems is getting excited about price of gold and silver. I just bought silver coins from GPL , 2 weeks ago and paid $37/oz – silver is 40.60 now , gold is $ 1475 !!! DB knew what they were doing.
Have a good weekend everyone !
Mjk, that land sounds awful cheap. Let see:
It is aprox. $ 10.0 a foot , so 400 feet ocean beach front would be $ 4 K, then can you get 600 feet deep for another thousand or two – it would make a nice lot for $ 5-6 K , am I right ? Or what do you get for 10 K ?
Do you have to pay property taxes on Panama ?
Way we go , now you are digging...