MNP pros and cons:
1. Almost non existent valuation attached to the stock and the fact that plenty of work has already been done at Mt. Kare. Accordingly there is a lot of smoke including snippets and signs of supergene material.
2. Deposit is located next to an existing mine at Porgera (50% PDG and 50% two small Aust. companies) where considerable infrastructure (it makes no sense to me to start a new plant here, although I thought I heard a little of that in my conversation with Mr. Scott yesterday) is in place. A review of Porgera is in order: There are about 700-750K ounces mined a year there, with about four years left in fairly low cost open pit material. Although there is supposedly a reserve of 6.6 million oz left (year end 01), to extend the mine life beyond 05 will require going back to expensive capital intensive underground operations. PDG has conducted some exploration activity with only modest success, no surprise given their $44 million worldwide exploration budget (would require $16 discovery cost per oz to replace annual production).
3. Time is ticking on PDG here and everywhere. A con would be the fact that PDG is one of those deer in the headlight companies and just does nothing. The best outcome IMO would be for someone else who is more "forward thinking" to take over PDG or absorb this operation and employ a wider district approach. NEM (has been out there kicking the tires in the past I've heard) is often mentioned as a natural for this locale. NEM may not be the buyer of PDG, but properties are going to be shuffled and traded around amongst the majors over the next few years even if not.
4. Pro or con? Not exactly sure what raising C$800K at a dime accomplishes for MNP? I imagine there are two objectives: a: allows the insiders (I couldn't get any) to get in for nothing, and b: puts MNP back in the game (they have a little treasury in addition to the PP, somebody said 700K now), and turns up the heat some on PDG. "B" is good for us yeomen shareholders, but too much of "A" is a concern. Obviously if MNP stumbles across the suspected supergene material at Pinuni Creek, we have a whole new ballgame. The con: they piddle away money raised at absurd prices for nothing. Despite elephant targets at MK, exploration is not easy there, including security issues. That's why I thought a JV with a larger outfit (even if not PDG) made more sense. The timing of the "insider" PP was interesting is it not, as it occurs after Carpenter Pacific appears to have worked through it's position and overhang (which was nearly 10 million shares per the May proxy statement). I'd say that was a gooood sign!
5. Pro: Chet Idziszek, the discoverer of Eskay Creek, is no dummy. Mt. Kare has been mothballed (when I called IR last year the guy tried to peddle a natural gas deal to me instead) over the last two year drought in exploration, but it's coming back out of the closet. At minimum there should be renewed interest in MNP now. Stock has excellent liquidity and should be a good vehicle for traders or investors in a junior bull market. I think ten cents is a very good entry point for those who want to speculate on the sector. |
