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Monday, 10/04/2004 7:58:04 PM

Monday, October 04, 2004 7:58:04 PM

Post# of 1286
PVM.V, I just found this board devoted to coal, nice. Some of the items I will be posting might be a little dated, but still relevant. This is an email I received from Graham Mackenzie, CEO of PVM, on 9/8/04 answering some questions I had. Thought I would share it. The profit margin on coal currently being sold is US$22.00/ton, but here's the whole email. I'm on the free system here so this is my post today(3). Email follows:

Thankyou for your interest in Pine Valley Mining Corp. The Management team is focussed on increasing production from the mine in the short term so as to take advantage of the price outlook for the next few years.
In answer to your questions:

Does Pine Valley own/hold any shares of the company that it bought from Mitsui Matsushima, if so when would these be sold?
Pine Valley Mining Corp purchased the 1/3 share of Falls Mountain Coal and Pine Valley Coal that was previously owned by Mitsui Matsushima. Pine Valley Mining Corp now owns 100% of Falls Mountain and Pine Valley Coal (the mining leases are held by Falls Mountain Coal. PVM Corp has no intention of selling any assets. PVM Corp does not own any shares in Mitsui Matsushima.



The 3,333,334 shares from the private placement with Sprott Asst. Mgmt. had a hold date of Sept. 12, 2004, I assume as of this date the shares will be available to be sold by Sprott?
You are correct that there was a 4 month hold on the shares. In published reports Mr Sprott has been bullish on the outlook for coal and Sprott Asset Management holds large holdings in other coal companies. I believe Sprott is holding for the longer term.



Next, when will any exploration start on the 29sq km of new leases? Need to raise reserves to increase shareholder value. How many sq km are the current known 15 mill. tons on?
The company is currently reviewing exploration plans and possible future production targets. A decision on near term exploration will be made later this year. The Willow Creek mine, including infrastructure, will cover an area of 2.5km by 4.5km - say 11.25 sqkm. PVM Corp now holds under lease a total of 126 sqkm, all in close proximity to rail infrastructure.

What are the possibilities of Joint Venturing the Indin Lake Gold property? Is anything going on with this property?
Indin Lake has been put on care and maintenance until the Willow Creek project is producing cash flow. Options for developing Indin Lake, including possible joint ventures, will be considered next year.

The feasability study for the coal project had a net cost of C$25.09 per ton. I know the exchange rate at the time was 1.55 and now is 1.30, I know the avg selling price(so far) per ton is US$52.11. What was the estimated selling price of the feasability study? Have these offset each other?
The Sept 2002 feasibility study was based on a PCI selling price of US$32.25/t (or CAD$50/t at 1.55). The cost you quote of $25.09 was for mining and processing only and did not include rail or port costs (say CAD$20 based on Grande Cache published data) hence the true margin was around $5/t for PCI - higher for the coking portion (1/3 of Willow Creek). At our AGM last week PVM provided information that the FOB cost for PCI is forcast to be US$30/t this year and selling price US$52 hence the margin is a healthy US$22/t. A copy of the AGM presentation will be posted on our web site early next week. This presentation also provides a summary of why we believe Pine Valley Mining Corp is an excellent investment choice - see last 2 slides.

I hope this helps with your understanding of PVM

Regards,

Graham Mackenzie
President and CEO


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