Just came back from a 3 week vacation and have been busy rebalancing my portfolio and planning another trip. With all the recent developments, I cannot say that I am impressed. My stake in PTQ is rather negligible at this point so it does not make sense for me to participate here on a daily basis anymore.

Gold operations last quarter saw little bottom line improvement with only 13,880oz poured. The other 13,564oz mined mostly consists of stockpiled ore to be used for heap leaching. To me, it is just fluff from management to show that they are producing more gold on paper which is a sign of desperation. The quarterly gain is mostly due to improvements in other income accounts. Heap leach production has been delayed from the summer to the fall. Iberian would provide its investors a quick flip on their investment since they would get about 40M shares despite seed investments that are likely worth much less. Capital cost is estimated to be $250-300M for a 2.1Moz project which is relatively expensive and greenlighting it would mean more dilution and/or debt. Still awaiting more OdN results and proof that the heap leach project is economically viable in a non-simulated environment. Starting it up in the rainy season is a great time to do it since they will have an excuse when the project will undoubtedly experience setbacks.

Good luck PTQ investors. Here's hoping that I am wrong.

I too am worried for the same reasons you suggest JBL. Fifer starting up a new venture company in Spain means he is less focused in PTQ. It's unclear whether or not Iberia(n?) Resources is a private subsidiary of PTQ or totally separate. In either case, the new company would need to raise over 100M euros in order to get those mines into production.

From the last PR, it looks like OdN is a bust:

"calculated inferred resource from the Oro Del Norte Project totaling 276,383 ounces (18.1Mt @ 0.47g/t Au, 0.1g/t cut-off)".

Production cash costs have ranged from $600-900/oz using 2.22g/t head grades. Imagine what the costs would be feeding 0.47g/t? To me, this suggests the resource from OdN is only economical for heap leaching and the jury is still out on that one being a) approved and b) economical.

Btw under BC securities law, technical reports on reserve/resource updates must be filed within 45 days from disclosure. Based on the grades calculated, I wouldn't be surprised if they wait as long as possible before dissemination.

http://www.bcsc.bc.ca/uploadedFiles/Roundup07_NI43-101-TechReports.pdf (page 13)

With the latest PR, I just see more smoke and mirrors. IMHO, this is a pure gambling stock now. Still awaiting OdN drill results and PDI spinout. Too many questions going forward. [My annotations are in bold.]

Company News Alert
Petaquilla Minerals Ltd.: Molejon Gold Project-NI 43-101 Reserve Update; 61% Increase in Reserves (ccnm)



VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 8, 2011) - Petaquilla Minerals Ltd. (the "Company") (TSX:PTQ)(OTCBB:PTQMF)(FRANKFURT:P7Z) today announced that it has completed Phase 1 of its National Instrument 43-101 ("NI 43-101") compliant mineral resource and reserve update for its Molejon Gold Project. This is the Company's annual review of its resources and reserves that have been upgraded over the past year through its engineering and drilling activities.

[The wording of Phase 1 seems to suggest there is more resource and reserves updates to come for the Molejon Gold Project, but what is phase 2? Why weren't the previous annual reviews of its resources and reserves not disclosed to the public in previous years? The last NI 43-101 update for the Molejon Gold Project was back in 2007! Where are the drill results in the past several years that confirm the upgrades? I hope to see the technical report filed on SEDAR, otherwise how else could the public verify what is being said.]

The Company has formally upgraded its NI 43-101 compliant Measured and Indicated ("M&I") resource to a proven and probable reserve of 643,266 contained gold ounces (15.3Mt @ 1.30g/t Au, average metallurgical recovery of 91.1%) as of the October 1, 2010, production cut-off. Prior to October 1, 2010, the Company mined an additional 99,961 gold ounces (1.39Mt @ 2.22g/t Au) of proven and probable reserves bringing the total proven and probable reserves at the Molejon Gold Project to a total of 743,227 ounces. This represents an increase of 61% over the last calculated reserve as of the October 1, 2010, production cut-off.

[It is good that 643,266oz are now in the P+P category, but the average grade has fallen to 1.30g/t Au. The old 2007 M&I resource was 15.73Mt @ 1.50g/t Au which suggests that the company has been depleting the higher grade ores as proven by the mined ore @ 2.22g/t Au. It's funny that production cut-off is mentioned twice without indicating what the production cut-off grade is!? Wait I'm even more confused, are they adding back the 99,961oz back to the reserve for a retroactive total of 743,227oz!? How did they even get a 61% reserve increase without specifying what the last calculation was and when did that happen!?]

In addition to the above, the Company is currently working on the following to increase shareholder value:

Upgrading to reserve status an additional 103,255 gold ounces (10.2Mt @0.32g/t Au, M&I category at a 0.18g/t cut-off) located within the Molejon pit.

[So far unproven since the heap leach project is still in development. The grades are close to dirt.]

Upgrading to reserve status an additional 253,440 gold ounces (30.3Mt @ 0.26g/t Au, M&I category at 0.1g/t Au cut-off) from an area adjacent to the main pit. The Company is scheduled to publish a new reserve number upon completion of the Heap Leach Project scheduled to commence operations in the third quarter of this calendar year.

[These grades suggest more dirt.]

Upgrading to M&I status its inferred resources of 966,294 gold ounces (185Mt @ 0.16g/t Au, 0.1g/t Au cut-off) from an area adjacent to the main pit.
Upgrading to M&I status a newly calculated inferred resource from the Oro Del Norte Project totaling 276,383 ounces (18.1Mt @ 0.47g/t Au, 0.1g/t cut-off).

[I think you get the picture.]

The updated resource is scheduled to be released during the third calendar quarter of 2011.
As previously announced January 4, 2010, the Company is advancing its Heap Leach Project. Work has progressed to the final engineering and design stage, which is being completed by independent consultants including METCON Research (an affiliate of KD Engineering Ltd.), Knight Piesold Ltd. and Gramsa S.A., all working in conjunction with the Company's mine site personnel. Final engineering and design has commenced and is planned to be completed in March 2011. Construction of the associated infrastructure commenced February 2011 to take advantage of the traditional dry season in the Republic of Panama.

[Good news that the heap leach project is on schedule. Will it prove to be economical?]

Mr. Mike Martin, Mining Engineer, a Qualified Person as defined by National Instrument 43-101 and Project Manager for Behre Dolbear Inc., has been overseeing the resource and reserve estimate update. He is ensuring that the appropriate quality assurance protocols are being followed and that the data has been qualified under strict quality controls. He has reviewed and verified the technical mining information contained in this news release.

All reports will be filed on SEDAR.

About Petaquilla Minerals Ltd. - Petaquilla Minerals Ltd. is a gold producer operating its gold processing plant at its 100% owned Molejon Gold Project in Panama. The Molejon mine site is located in the south central area of the Company's 100% owned 842 square kilometre concession lands, a region known historically for gold content.

On behalf of the Board of Directors of PETAQUILLA MINERALS LTD.

Rodrigo Esquivel Klein, President

FOR FURTHER INFORMATION PLEASE CONTACT:

Rodrigo Esquivel Klein
Petaquilla Minerals Ltd.
President
(604) 694-0021 or Toll free: 1-877-694-0021
(604) 694-0063 (FAX)
www.petaquilla.com

I agree that it is possible that an Inmet sale to another player like FCX could have spooked Martinelli. Perhaps he and other politicians felt that they would lose control on the projects interest. The reality is that things remain unclear right now so we are all left to only speculate at this point. There are many possible angles to the story, but I get the inkling that the Americans had a big voice in the matter.

Conspiracy Theory

Many of us have been wondering why did Martinelli all of a sudden pull the plug on Law 8. When 1BP said "think outside the box," it got me thinking. What I am going to speculate on is a conspiracy theory that may be coming from way out in left field.

We know Martinelli and CD went through great lengths to get Law 8 passed. He personally flew to Korea to do business with the Koreans. He even phoned their president upon passing Law 8. Weeks later, he repeals it and says he hates mining. Some here think that perhaps his life was threatened. I think this is plausible and the one group of people that could cause a viable threat are the Americans. Does Operation Just Cause ring a bell? Confessions of an Economic Hitman by John Perkins comes to mind as well. I haven't read the book, but do know about what he presents in it. Martinelli was about to do big business with non-Americans so imagine what would Panamanians think when its the Koreans and Chinese who are helping develop Panama since they have the capital to do so. How would this affect American interest and influence in the country? The Panama Canal has great strategic importance and controlling that means you can control the trade going through that chokepoint. With several ships passing through the canal on a daily basis, you have to wonder how much money and goods (ie. oil) flows through it? Why are the Americans concerned about Egypt which homes the Suez Canal but totally ignore Cote d'Ivoire which is equally war-torn? With the emergence of China and their demand for commodities, how important is it for them to have goods transported back to their country in a secure manner? Why is China planning to finance a railroad in Colombia that would rival the Panama Canal?

I'm starting to suspect that PTQ is just collateral damage in a game of economic warfare between the Americans and emerging markets (ie. China). The survey about 75% of people being against mining sounds fishy to me. Martinelli campaigning with a pro-mining approach, passing Law 8, and then declaring he hates mining is insane. Or maybe all these are BS cover stories that the Americans wanted him to use. Wasn't he schooled in America? I guess now's a good time to have a beer.

http://www.answers.com/topic/canal-zone

http://bauman.sovereignsociety.com/2011/02/25/china-in-talks-to-build-panama-canal-rival/

A very important question going forward and I cannot find anything that guarantees the right for PTQ to continue operations. Currently contract law 9 is still in effect which is why PTQ is allowed to continue to mine. The document below concerning Ley Petaquilla just highlights certain rights to develop the Molejon deposit. I believe, although unlikely, that if a new law were passed that suspends mining, then it would supercede contract law 9 and operations for PTQ would have to stop. I am not a lawyer so please DYODD to form your own opinion.

http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHtmlSection1?SectionID=3734678-3369-56285&SessionID=0H_WHFiwbTbfY47

I will take a gander at this since MJ is currently being serenaded by dozens of women.

The former new mining law may have already been priced into the stock which could explain why PTQ did not go up after it passed. The call for repeal brings a question of uncertainty to mining in Panama. Markets tend to shy away from uncertainty which could explain the recent SP drop.

I believe the potential for a mine shut down was first raised by MJ for several possible reasons that may or may not play out. When the politicians redraft a new bill, it could include a short term suspension of all mining activities that would supercede other laws. Protestors could also take force at Molejon to impede on operations as well. This is speculative and I would not put a lot on these events happening, but the possibility exists and it only takes a little bit of negative perception to make an issue bigger than it is.

Not sure what becomes of PDI in the near future. To me it's a wildcard that could have positive surprises if played right, but could easily be trumped if the decked is stacked against it.

No problem. Common thing to happen on these boards. Have a great time at Carnaval!

Here is the latest report issued by The Fraser Institute:

http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/publications/mining-survey-2010-2011.pdf

Panama is currently ranked #68 of 79 surveyed.

'Uncertainty' the big killer for mining investment

By: Liezel Hill
3rd March 2011

TORONTO (miningweekly.com) – The worst things a government looking to attract investment in its mining sector can do is to have murky regulations or backtrack on existing rules, Fraser Institute vice-president for international research Fred McMahon said on Thursday.

Speaking after the launch of the group's closely followed annual survey of mining companies, McMahon said the keys to a good investment climate are clarity, certainty and consistency on the part of regulators and governments.

Although enjoying historically high prices for many commodities, miners are having to deal with increasingly tight environmental laws, while local governments, eyeing the increased revenue and profit figures, are showing a tendency towards raising taxes and royalties.

Whether or not the regulatory and fiscal environment makes mine-building attractive, it is vital that the rules are clearly spelled out, and that they remain consistent, McMahon told Mining Weekly Online.

“You should know that if you meet the regulations you will go ahead (with a project),” he said.

“Miners have for a long time had to deal with uncertainty under the ground, now they have to deal with human uncertainty above the ground.

“And government, without weakening regulations and without becoming more or less mining friendly, can help boost prosperity and growth in their regions simply by clarifying and making certain regulations.”

The Fraser Institute survey studies the attractiveness of provinces, states and countries around the world for mining investment. This year's report tracked 79 jurisdictions and was based on the opinions of mining executives representing 494 companies.

Canada's Alberta province was ranked number-one, followed by Nevada, Saskatchewan and Quebec.

Nevada and Australia both took a hit in a mid-year 2010 survey, which was compiled after then-Prime Minister Kevin Rudd proposed a 40% resources super profits tax in Australia, and Nevada was considering a "punitive" tax against mining

Both proposals were since scrapped, and both jurisdictions have now bounced back in the survey ratings, McMahon noted in his presentation.

However, Quebec, which was ranked number-one in the previous survey, has dropped to fourth place, following moves to amend the provincial Mining Act, followed by proposed tax increases.

“Everyone that I talked to in the mining industry in Quebec didn't really object to the actual tax increases, which were fairly minor; what they objected to was how it was unveiled without any consultation or advance notice,” McMahon said.

“The whole thing is about uncertainty.”

The bottom ten scores in the latest Fraser Institute survey went to Indonesia, Zimbabwe, Wisconsin, Madagascar, India, Guatemala, Bolivia, Democratic Republic of Congo, Venezuela and Honduras.

Although Colombia is still ranked relatively low, at number 40, McMahon said that does not neccessarily reflect the reality. There are long-held perceptions about the safety and investment environment in Colombia that may take time to shift in people's minds, he said.

SKILLED LABOUR

One of the criteria by which jurisdictions are judged in the survey is the availability of skilled labour.

Finding skilled people was an “immense” concern for mining companies in the period before the economic downturn, McMahon commented.

The issue became less pressing when projects were put on hold and workers were laid off in the period starting in late 2008.

“I'm not hearing a lot of complaints about it now, but I think we are beginning that part of the curve where it will get more and more difficult to get the labour, the skilled labour people need,” he said on Thursday.


Edited by: Liezel Hill

Just amazing...

The elite stay on top because the poor don't know what is in the best interest for themselves or their kids to get better. They are ignorant to believe in change from what a politician promises and yet cannot comprehend why change is good once action is taken. Stupidity and ignorance must be a religion no matter by way of birth or choice!

Here in British Columbia, I can say the vast majority of people like the benefits from cheap and clean hydro-electricity. Yes there are concerns when building dams, but that's why you undergo long environmental studies and hire world class engineers to build them. The alternative is to either run on expensive and polluting fossil fuels or go with no energy at all. Should the environmentalists and Panamanians stop developing the country thinking change is not good, then how do they progress along with the rest of the world? It would not be good for PDI in that sense.

If people complain but aren't willing to listen at the same time, then it's no wonder why they get ignored. I'd like to think we can all be sympathetic people, but how can you help those who aren't wanting or ready for it?

Thanks MJ. These are serious questions that all investors have to worry about. Martinelli's 180 shift has casted a major doubt for mining in Panama and I think this won't help its citizens overall. No foreign capital going in means less funds available to improve infrastructure or education. For a politician to lobby for positive change and then reneg on it is a sign of weakness. Supporters become non-supporters, and non-supporters remain non-supporters.

The Koreans and Chinese may look elsewhere for now, but will come back in time. It is in their best interest that the untapped resources be developed.

PTQ is definately in a gray area. Current operations can continue in the short term and may not see any interruption from this point onwards. However, ANAM could pull the plug on heap leaching since everyone seems negative on it. I can't see PTQ acquiring other properties/businesses without any cash on hand since the SP may not lift up enough to get those $1.54 warrants exercised. I doubt any other mining company would want to merge or buy PTQ out either with the current political environment and a president who doesn't care the least about mining. PDI will have to rely on contracts from domestic players in the short term, but at least this buys some time for it to build a track record in time for when foreign money to comes back.

I would agree that any rally would be a good opportunity to reduce risk in the short term. The technicals look broken to me as key support levels have been breached and the trend is of lower highs and lower lows. Some longs believe that the smart money is buying. I guess that's true if those buyers were short sellers taking profits. My point is that smart money always exists on both sides of the trade, it's just a matter of how you perceive it. Until it becomes clear what will be the fate of operations at Molejon in the foreseeable future, there remains a lot of uncertainty and the SP may just act like a dead fish in water. As Ric suggested, there are other opportunities elsewhere if you don't like the current risk-reward in PTQ.

For investing, everything in the past is a sunk cost. Knowing the time value of money going forward is very critical.

Speaking of Inmet, yesterday was a big opportunity to short or purchase put options in IMN as a PTQ hedge. I find it interesting that IMN closed up yesterday even though the news of potential repeal from Martinelli was announced earlier that day. It's only today that the sheep sell on a day's old news. Hmm, LUN and EQN haven't been affected. Perhaps arbitrageurs think LUN's bid will get pulled.

I was just about to post this article too Loj.

From what I understand, Martinelli may only be repealing the act in order to amend certain sections of Law 8 in order to appease to certain indigenous people. Rumors that mining could be shut down is just speculation and if you fear it, then it's probably best that you sell if you cannot bear the risk of the SP dropping. Having said that, what are the odds that Martinelli completely suspends all mining activities? I think a shutdown is very slim as many current workers, who are Panamanians, would be displaced without jobs. Imagine the revolt that would come from them should they lose their job even for a short period of time. Also, less tax revenues will be collected for the state and no government likes having a budget deficit.

To us, the investors, it's all about risk-reward and the time value of money. If you believe there's a high probability that PTQ will get shutdown for 2 years as speculated by some, then sell and move on. If you believe there's a low probability that PTQ will get shutdown, then this is a buying opportunity to acquire more shares off weak hands. I hold enough PTQ in my portfolio where I won't lose any sleep if the SP drops 50% or goes up 100%. Think as objective as you can, make a decision, and know you won't have any regrets with it. Otherwise you are not fit to be investing too much.

MJ is an excellent contributor to this board and is our eyes and ears in Panama. He has strong postitive opinions on what PDI will become since he is closest to the scene. Obviously we foreign investors can only treat his outlook as speculative since we don't have the same information or eye witness accounts. He may end up being right in time, but we cannot know as of today. MJ, please don't go disappearing like crazyinvestor!

Loj you are doing a great job as moderator. I'm sure many people on other boards would love to have you keeping things on balance and in check. If only iHub would make private replies available for all users, then perhaps there would be no need for announcing certain things in public. Encouraging people to buy/hold/sell is one thing, deceiving people to buy/hold/sell is another. Nobody here is accusing anyone of the latter right now. In the end, we all want the same thing which is a getting communities built while receiving a reasonable return on investment.

"moderate" - Being within reasonable limits; not excessive or extreme

Congrats on GPR. I hope you have taken profits as I think it is 30% overpriced now. As a long term investor, I do not touch stocks that trade above fair value, by my own calculations, and have gone parabolic. A quick in and out trade is fine as long as you have a strategy and execute on it. Obviously I missed out on some money, but nobody can ever time the big moves perfectly especially when factoring in risk vs reward.

Again, the DB deal is one of the best financings I have seen in the mining business. For all the mining companies I watch, I have yet to see a financing as good as $45M for just 66.5koz spread over a period of 5 years. Most financing these days are dilute dilute dilute! Other deals involve surrendering project interest either in a JV or production stream for cash. Banks seem to be refusing to give out gold loans these days thinking gold will drop. This is why gold should go higher and won't probably top out until more banks are giving out more gold loans to back all the worth paper they circulate.

Right Loj, DB are fixed to get $58.2M with PoG between $875-1290. Assuming gold averages $1400 in the next 5 years, they are collecting an extra $7.3M [(1400-1290) x 66,500]. This amount looks substantial, but really it is negligible when spread over 5 years. Overall a very small price to pay in order to get half the debt coverered and a guarantee through DB that the company cannot default. Bashers, either knowingly or ignorantly, tried to warn weak minded retailers that the deal was bad for PTQ. All I could do was explain all the above and laugh at the garbage bashers were spewing.

Not a big deal for me either way just as long as no content is lost on a potential change to PTQ. For now, I will abstain from voting.

Payment started with 500oz in November and has already been recorded as per FYQ2's MD&A. Bump up to 1110oz per month beginning in June.

Hey Loj, I updated the ibox as you requested. Most recent share structure is under the old one but I didn't change any of the formatting. If you want to keep track of all the changes in share capital, then perhaps make a table with years as the column heading? Too much work for me.

Also copy and pasted the DB forward gold purchase agreement found underneath the (cough cough) production targets.

If undervalued is what you want, then SLX does not come close in my books. With close to 300M shares fully diluted (basic + in the money derivatives), its market cap is roughly $270-300M. It has one operating mine, La Guittara, that produces less than 1Moz Ag at 320tpd. They have plans to expand operations there, but this will take time and money to make it happen. Genco was undercapitalized to develop the mine any further, hence the merger. Underground development also presents lots of challenges and risks which is something RVM and other underground miners are aware of. In terms of M&I ounces, SLX is pretty slim even after combining all of its properties. Silvermex could make its operation profitable, but I don't like the risk-reward and for all those reasons I think it is overvalued.

With silver continuing to make new highs, pretty much all momentum silver stocks are as well, but I would argue all of them are expensive. RVM and USA are the biggest undervalued silver companies that I am aware of and are relative laggers in the industry. RVM produces over 1.3M ounces, without counting copper by-products, and trades for near half SLX's market cap. USA produces about 2.5M ounces with similar market as well. The only other silver producer I own is SVL which trades at a slight discount. GPR seems fairly priced.

I would like to make a correction to my last post:

"On page 50, the 1.2Moz is worded as reserves which is incorrect because reserves can only be derived from proven and probable resources. [this is an incorrect statement on my part since M&I resources can be treated as reserves, but not inferred ounces]"

I suspect that the company has already been mining some high grade ore near surface because production in previous quarters were high relative to a lower tpd rate than today. As higher grades are consumed, this decreases the average grade left in the pit. I think getting to 5000tpd is meant to offset lower grades and costs going forward.

The heap leaching should prove to be profitable. However, the grades are very low and it's unclear what the real recoveries will be outside a lab. Combined, it is possible PTQ will become a 100koz producer, but not much more unless it finds higher grade deposits in OdN.

Possible red flags:

To play devil's advocate, I think you have to be careful with this presentation which appears to be inaccurate/misleading. First the quarterly production targets assume ore grades of 3.00+ g/t, but that is only if they mine high grade zones in the Molejon deposit. The old 2007 NI 43-101 resource estimate shows there is about 340,000oz above a 2.5g/t cutoff M&I. I posted earlier that the average M&I grade is about 1.50g/t after you account for the additional 425,000oz above 0.5g/t cutoff. Why did the company just produce over 15,000oz in FYQ2? I'm starting to suspect that rain and mechanical issues are not the problem going forward, but average grades being fed. One thing we all overlooked in all of the production updates and MD&As are the reported grades milled. I think we can find the tpd rate, but can you find out what was the average grade in any of the PRs or reports? Most producing companies disclose the grades being fed, but PTQ seems to be an exception. I would not hold my breath on management sustaining average grades of 3.00+g/t for these reasons.

The Nov 10 PR demonstrates a resource expansion to 1.2Moz M&I, but the additional 640,000oz M&I have a very low 0.1g/t cutoff which is only deemed economical for the heap leach project. On page 50, the 1.2Moz is worded as reserves which is incorrect because reserves can only be derived from proven and probable resources.

I like you folks. Please do not overleverage yourselves to any one stock and do consider diversifying a bit.

I think the remaining $0.65 warrants have not been called in yet by management is because they may want to prop up FY Q3/Q4's income statement. With less shares added into the float, this magnifies a positive EPS value. Although PTQ is foregoing the opportunity to earn some short term interest on the funds collected, propping up the EPS could attract more investors. Now if they have negative EPS, then it may be better to add the shares into the float and dilute a bad figure. This is one of many reasons why I prefer to measure cash flow rather than EPS because you cannot prop up cash like you can with earnings.

China has been scouring the globe to secure enough resources for its 1.5B people. Recently they have been developing ties to many African countries. Being that Panama has a lot of untapped resources, I'm sure they would like a piece of the that pie as well.

I currently have 3 silver companies in my portfolio. In my opinion, upcoming $50 POS is a given.

As I'm writing this, the USPS truck just pulled up and delivered me my silver bullion! My heart is racing now that it has finally come. The mint was experiencing delays and gave me the option of either selling it back at spot or issuing a full refund. For a couple of weeks, I had a no lose position. Backwardation was once a rumor, but is now a fact. Could we see this in gold if mania demand for gold bullion kicks into high gear?

One metal that seems to be forgotten is nickel. It's starting to break out and has a bit of catching up to copper. The unlisted #1 is called Belvedere Resources Ltd which is a nickel producer with gold assets in Finland. You will have to go to the other board to find my commentary on it.

PTQ had previously been my #1 at significantly lower prices. I still own quite a lot relative to my other stocks, but grades and management are not transparent enough for me to own more shares. Tough to keep a target price when milled grades are nowhere near corporate base case. With a 1-2 year outlook, my target range is $2.24-2.93 without PDI. Should add that if the company can double its grades, so too for a doubled target price. Still waiting on OdN.

Before the spin-out IPO of PDI, I think it would indeed look more attractive with its first major contract already signed. More important however is making sure PDI is well capitalized to survive on its own. This means that getting the $1.54 warrants exercised is critical to achieving additional capital in time for an unofficial May 31 spin-out. I think the stock price only needs to get to about $1.54 to achieve this and you can ignore the $2.00 weighted average early expiry clause as a target.

So why do I say the SP just needs to get to around $1.54 and not above $2.00?

I think a spin-out announcement itself of 1 PDI share per 4 PTQ shares is enough incentive for the warrant holders to exercise early and receive their free PDI shares by the record date.

Let's assume the stock is $1.24. A 1:4 ratio translates into $0.31 PDI : $1.24 PTQ. In theory, the warrant holders would have an intrinsic gain of $0.01 should they exercise early. I think to adjust for time premium and psychology, a $1.54 target is probably better. For the past few weeks, the stock has bounced between $1.20-1.30 to reflect what's looking like an arbitrage spread. If you believe PDI will be spun-out by May 31 and that the $1.54 warrant holders will exercise early, then buying shares under $1.23 is added value hypothetically speaking.

I am getting a feeling that PTQ is going to make its next leg higher within a few more weeks. Not basing this on technicals or anything, just my gut telling me this. Where's Salvo to talk this stock back down to $0.34?

PS: For FVH or anyone interested in diversifying a bit, I made pitches in "my stocks" for 2 of my top 3 picks. Ihub doesn't have my favorite company listed.

I hope indeed this will be a one off occurrence going forward. There are a lot of positive developments upcoming especially those pending drill results. It would be great if the company can discover another elephant deposit.

Actually I wasn't aware there was much if not any silver at Molejon. Perhaps those amounts were only found near surface and are now depleted?

It's shocking that some managers of companies try to cook the books with various tactics such as what you described. I wonder how many actually get away with it especially when regulators appear to be asleep at the wheel. Not many things that grinds my gears more than people creating assets out of thin air and nobody doing a thing about it. Nice credentials btw.

I think it is good to see that environmental awareness is strong in Panama. Public pressure will prevent the mining companies from devastating the environment like others had done in Latin American countries in the past. It is amazing to see social change going from one extreme to another, but this is as cyclical as the markets. Too many indigenous peoples were ignorant about environmental pollution and paid a heavy price last century. Today, they along with other minority groups overlook the economic benefits that mining brings to a community with presently lower risk of pollution. With better environmental awareness and improved socially responsible mining companies today, I think both sides can coexist and mutually benefit. Good luck Panama!

Just so that I make myself clear here first, I am not attempting to bash the company nor accusing anyone of foul play. I am not a certified accountant nor am a qualified financial advisor. While I remain optimistic on the company's immediate future, recent developments may warrant some caution in my opinion.

In post #7093, I thought that there would be an amendment made in the MD&A on the 8700oz of stockpile ore. On Feb 9th, the CFO and CEO did end up making an amendment but just restated the quarterly gold production figures higher. So why was about 1600oz unaccounted for and where did it come from? Was it the now departed Ms. Van Baarsen who incorrectly counted the production numbers? Why not disclose the stock piled ounces in the MD&A as well especially when it was material enough to report in a PR? Until these questions are clarified, I treat this accounting issue as a red flag.

The passing of the new mining laws in Panama is great for PDI and the country. I think is kind of a non-event, as far as the market is concerned, in the short term because it was expected to go through. What does concern me a bit is the increase in royalties from 2% to 5%. Assuming $1350 gold and cost of goods sold at $600/oz, cash costs would go up $22.50/oz ($750/oz profit x 3%) for total cash costs of $622.50/oz. This makes getting to the expected $600/oz cash cost less likely since COGS would need to be lower and I wonder if the market has already factored this in or not.

Those warrants will be exercised because they are deep in the money. Nobody leaves money like this on the table. If the warrant holders lack the cash required to exercise, then they can either borrow to exercise or short sell the stock and use the proceeds to exercise. Using the latter method is what most prudent investors would do.

From the boards I read, relatively speaking, PTQ seems to have quite a bit of posting activity than most other stocks I watch and has no analyst coverage. Of course this sample size isn't enough to gauge overall interest on the retail side, but it's something I find curious.

In the summer of 2009, former Avion Resources on the TSX Venture had no coverage and not much board activity. Today it's now on the TSX big board with 7 analysts following it and there are now way more posters than before.

I'm not sure that an AMEX listing does all that much on the retail side. For instance, Richmont Mines is dual listed and has been a gold producer since 1991 yet its message boards are very quiet to date. There are 3 analysts following it too.

So why do some companies get more attention than others? How did you find PTQ?

As for myself, I sifted through a bunch of gold listings in the markets & research section at TDWaterhouse. It was a lucky find.

Thanks for pointing this out. I have now updated my profile page. Now to change gears and get back on topic folks.

I notice that PTQ doesn't have major analysts covering the stock, yet there is quite a lot of message board activity. Any reasons why you think there is a lot of retail interest (assuming we all are retail investors) without any major coverage? Also, how did you find PTQ?

Fwiw, I for one like all the mining law updates provide by mj because they are very relevant to the company. One thing I don't like is the increase in mining royalties from 2% to 4%, but this is a standard trend in most governments wanting to get a bigger piece of the pie in the mining industry. While this limits some companies profitability, it also provides another barrier to entry for new producers. This is how current producers such as PTQ have a competitive advantage over explorers and development staged mining companies.

Thanks for sharing that story mj. Mind me asking why were you traveling back and forth and where you got your gold coins from?

The potential for ODN seems to be huge, but it will take time to drill and cash to fund. I kind of hope that a company like Endeavour Mining would buy Petaquilla Gold and execute a gigantic drill program like they are doing with the former Etruscan property.

Perhaps this all comes back to junior miners like PTQ in that the other thugs cannot rob you of your shares. It is extremely unlikely the world goes back to a barter system because the other thugs present a more direct threat to ones safety. As long as we have computers, digital money will always be around because of its convenience and accessibility. The real concern is purchasing power and, historically speaking, nothing holds its value better than gold/silver.

For those who would like to know what other stocks I own, you will have to go to my profile page on SH since IHub does not allow stock symbols in signatures.

Going to cut in and answer this one. The risk associated with storing your bullion in a safety deposit box is that if government were to order a confiscation on gold/silver, then they could have the right to open all bank boxes and take your bullion in exchange for notes. This has only been rumored to have happened before, but such a scenario could exist.

http://en.wikipedia.org/wiki/Executive_Order_6102

Silver is a precious metal like gold, but currently in more demand since it has more industrial usages. Copper is not a scarce metal and is not recognized as currency.

Government taxing real currency would be preposterous. I have two concerns, albeit small.

1. The NWTM coins I ordered are not legally recognized. Does this mean that they may need to be assayed in future transactions or is the certification by the mint itself enough?

2. I am a bit nervous on storing coins in a safety deposit box should confiscation become an issue. Then again, storing all coins in one vault is risky too. Should I get several vaults and store them in multiple locations?

Btw, my favorite Belgian is of course JCVD! I should also add Dr. Evil as an honorable mention too.

Agreed jov, physical bullion makes for an excellent insurance policy against pretty much all assets. I ordered some silver from the Northwest Territorial Mint in November and should be receiving it within the week. I just bought the content itself (not Maple Leaf, Krugerrand, or American Eagle) so technically it is not legally recognized, but should I be worried even if it is certified by the mint?

I am still contemplating whether or not to buy more bullion or shares in undervalued juniors. The former is more safe but the latter potentially provides a higher return. My ultimate plan is to convert stock gains into physical if or when this happens. Actually when I was at the Vancouver Resource Investment Conference, Peter Spina suggested people adopt this strategy.

Doubling of production capacity is great, but does not necessarily mean production will go up. A big contributing factor to getting production up is in ore grades and PTQ averages about 1.5g/t based on the last NI 43-101 estimate. Milling several tonnes of rock without much gold would only drive costs up. In previous quarters, the company had been sending higher grade ore through the mill so one has to wonder if those rates are sustainable. This is why ODN is very important in possibly adding new high grade ores to be sent to the mill.

In the short term, the company could possibly double production numbers quarter over quarter, but this affects the long term sustainability since there is only a finite amount of high grade content currently available. ODN drill results are big catalysts going forward since this company is in need of satellite mines.