PDG: an example of the impending reserve and production crisis facing majors. Their stated reserves use 300 POG, more than a luxury at this point. IMO their reserves are overstated (in case you haven't noticed POG is 265), but will use them anyway. These are year end figures so another half a year needs to be subtracted off. Also PDG has already sold 6.3 million ounces (2.8 million annual production) for future delivery. They would be nuts to hedge more now. PDG's exploration budget in 2001 was $52 million. Financials show only $8 million spent on exploration in first quarter.
The Good: PDG has a solid base of six producing mines that should just about survive the decade:
Cortez at about 700K, cash cost: 47, has 4,950,000 reserves left, has decent replacement potential. Granny Smith at 190K- c.c 166 normal(2000), has a mine life to 2009.
Porgera (Papua NG)at 350K, c.c -163 has another decade with 4,128,000. If PDG gets off their rears, MNP's Mt. Kare might help economics and reserves.
Musselwhite at 160K- c.c 186 has 1,738,000, maybe a decade left.
Campbell has been erratic but is probably a 200K producer, c.c in 2000 was 157. 281 in first quarter, 1,570,000 left.
PDG will release a new Campbell mine life study shortly. Expect a reduction. Anybody have a sense of this mine?
South Deep (South Africa) distorts PDG's overall reserve picture as it has an extremely long life of 80 years. It's a deep mine however and is constrained on output (ramping up for 350K in 2003). It is also high cost: 198 c.c. Of PDG's 47 million oz reserve, 29 million represents South Deep.
The total of "good" production that makes the end of the decade is 1,960,000.
The Bad and the Ugly: a third (940K) of PDG's current production will be gone by mid-decade, much of it this year.
Kidston with 180K is on it's last legs, will be depleted this year, no further targets.
Misima with 160K is depleted this year, no further targets.
Golden Sunlight with 200K is depleted, and will close in August. New targets only at much higher POG.
Bald Mountain is costly at 256, produces 100K, with only 509K at end of 00 gives it life to 2005. Why bother?
Dome with 300K, c.c- 200 has 1,542,000, possibly good through 2005. Exploration has been spotty.
More to come. If anybody has clues about where PDG gets new gold to whet it's appetite, please post. Donlin Creek, Mulatos sold. L.C. soon history? Madsen: very early days.
Sleeper (Nev.): Nah, PDG's sleeping there too. |
