PDL.TO PALDF – New high conviction buy
I started buying 2 days ago and then it ripped yesterday and I chased it. I have a 6.45 average on PALDF full disclosure. I sent it to one of my better mining guys and he bought it right away with less than 5 min of DD and napkin math. It’s that cheap. I don’t know why it came to life yesterday other than I started talking about it with my circle – I don’t think I have that much influence though lol so something else may be going on here.
They restructured in 2015. Brought in a new MGMT team. They went profitable last quarter with EBITDA of 22mln. That was palladium 900$ average for the Q. Palladium averaged 1000$+ this quarter. They are on 100mln+ operating cash flow run rate and the mkt cap is less than 400mln. If palladium breaks it’s old highs it could get parabolic really quick. If it just stays here the company is 3 times cash flow. Brookfield financed their turnaround and owns 92 percent. Only 8 percent is free float. Brookfield wants to sell. They will broker a deal at a higher price or just watch this thing move higher. Based on just the math it’s a triple IMO. 190,000 ounces of palladium per year. $600 cash costs to take it out of the ground, sell it for $1100, that’s 100mln in cash flows.
It’s trading at about half of its after tax NPV. At a 5% discount rate at 900-1000 Pd it’s a double just on the NPV. It’s also a call option on Palladium getting really nutty here thru all time highs. They are the only pure play palladium producer in the world.
Excellent – thanks!
No volume and it’s looks as though the move has already happened. RSI is overbought.
There is little volume because only 8 percent of the shares are free float. The volume that did happen yesterday was 5 times the average daily. This is just the start of the move IMO. It could be many multiples higher.
I wouldn’t go anywhere near this stock because of ADV alone. Retail can’t get out of small exits in a hurry.
Thank you Cashcosts.
I like the story and the chart.
Palladium is really strong while Platinum languishes for some reason
I’m in….JLs misgivings notwithstanding
CashCosts, Thanks. As you well know, I love the chart on this one. A long 2 year basing period with a breakout and backtest above the 30ema on the weekly. Weinstein stage 2 Bull in my book. 😉
Just a numbers thing here. They have done 143k ounces of Pd this year. They guided to 180-190k… they have a 15k tpd mill that they are running. Last Q they did 53k ounces at 6k tons per day UG and 3K tons per day above ground. This Q they are doing 6k and 6k for 12k. The surface ore has a lower grade but still… they did 53k ounces last Q and are processing 30 percent more ore this quarter? IMO they are going to do over 200k ounces and blow out guidance.