For anyone who's watching T.PFN, here's a posting I made on another BB, with respect to my current expectations / price guesstimates:
a. Personal minimum price expectation: $1.65/share
b. Personal maximum price expectation: $4.00/share
Some variables, and their current relative weightings:
Base/intrinsic variables:
- Price of Pd: 15
- Price of Pt: 15
- Drilling success: 70
External/speculative variables:
- Sector rally: multiplier of approximately 2.5 on low estimate above (e.g. 2.5x$1.65/share)
- External factors beyond anyone's control: Wildcard (e.g. world events)
As mentioned, these are just guesstimates. The problem with the variables mentioned above, is that they are all closely intertwined. The weightings are the tricky part. They are based on probabilities, and in mining, this is tough to gauge/guess. For interpretation of the above guesstimates, say that Pd prices were to bounce up to $500 / oz. Such are large increase would obviously increase the weighting assigned to the price of Pd, thereby lessening the influence/importance of the other variables. Similarly, if they are successful at drilling - even at current price levels, the probability of a mine increases very quickly. Nothing wrong with low grades of Pd, if the mine is similar to T.PDL's, for example.
I may be off the mark with the logic, and with only this much information to base a purchase decision on, why would anyone buy PFN? So why did I buy in? The deciding factor was/is Anglo American's $5.3MM 2003 drilling program. Their continued, and greatly increased investment, would tend to indicate that the probability of success is sufficient to merit the effort. I didn't put a cent in PFN 'til Anglo gave the word they were in for another $5.3MM. After watching PFN for two years, this is pretty amazing. Losing lotsa $$$ in the past has a way of making one very patient/careful.
Now, after all this boring talk, where's the excitement or "blue sky" in PFN? What excites me is the probability of a sector rally. I think the probability of a sector rally is slowly increasing. This is the ultimate state for all speculators. Everyone has seen what happens when a sector rallies. Some indicators that I think are increasing the likelyhood of a sector rally include, an increase in financing and drilling activities in peer companies. A little help from that all important catalyst - success through the drill bit, is all we need. And in this regard, I'm betting on PFN.
Well, that's my 2 cents. If PFN is .50 in August, I'll have to say I was wrong. On the other hand, if it's $1.25-$1.65 in August, well, we'll just say I was lucky.
JT |
