North American Palladium(AMEX:PAL)- PGM Producer Message Board

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Gold/Mining/Energy : North American Palladium(AMEX:PAL)- PGM Producer

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To: Elizabeth Andrews who wrote (828)	1/11/2001 1:37:50 PM
From: Claude Cormier	Read Replies (2) of 976

<I think that this is such a unique situation that using the PE model may not be the best valuation model for this stock given its remarkable position in the Pd market. > Agreed. I think that PDL will eventually sell at a P/CF multiple of at least 10 implying a price of $C30 in 2002 assuming stable exchange rates. I am using an average PF price of US$550 for the next 5 years. I know that PD is higher than that now, but since 50% of their production will be capped at US$550 and there is a possibility that prices fall back below that level in the next 5 years, $550 appears conservative. Of course, if PD still sells above $900 by the time they expand, look for higher cash flows and then higher price. A P/CF of 10 is very reasonable IMO for this special situation.

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