Looking like value atm. Im back in at around $3. Anyone else on this?
No one likes it??
20 December 2007
Update on development and operating activities
METAL PRODUCTION AND SALES
Perilyas total full year metal production from Broken Hill and Beltana is expected to be 160,000 to 170,000 tonnes
contained zinc and 55,000 to 65,000 tonnes contained lead, with metal sales of 110,000 to 125,000 tonnes contained
zinc and 55,000 to 60,000 tonnes contained lead.
Production from Broken Hill has been disrupted by localised seismic events in the Southern Cross area of the Southern
Operations. Whilst events had no material impact on the mine workings, the mine stoping sequence has been altered
to safely continue mining in this area. As a result the recent gains in development stocks have been negated requiring
mining of lower grade material. Half-yearly production from Broken Hill is expected to be approximately 41,000 to
43,000 tonnes of contained zinc and 25,000 to 27,000 tonnes of contained lead.
Full year production from Broken Hill is expected to be 95,000 to 105,000 contained zinc and 55,000 to 60,000
contained lead at a cash operating cost of US$0.75 US$0.80 per pound zinc.
North Mine Deeps Project
Perilya Limited will proceed with the feasibility study of the North Mine Deeps project in the second half of 2007/08
(refer to separate announcement to follow).
The recently completed North Mine Deeps pre-feasibility study has confirmed a Mineral Resource of 3.7 million tonnes
@ 11.3 % zinc, 13.5 % lead and 219 g/t silver (refer to Annual Report 07).
The resource which extends to a depth of 1,800 metres (Level 36) will probably be accessed via a continuation of the existing underground decline which to date has progressed to a depth of 450 metres (Level 12). While the time frames involved are similar to using the No 3 Shaft, the cash flow generated from continuing ore mining as well as the lower capital costs associated with installing only a rope guided ore hoisting system (instead of a full refurbishment of the shaft infrastructure) mean that the decline is a significantly lower risk development option. Dewatering of the mine below Level 22 will still be conducted via the No 3 Shaft and is scheduled to commence in the March quarter 2009.
Maximising the value of Broken Hill infrastructure
The key growth value driver at the Broken Hill operations is the 25 per cent spare capacity in the 2.8 million tonne per annum concentrator, which currently processes approximately 1.9 million tonnes of ore primarily sourced from the Southern Operation. At current metal prices this spare capacity equates to approximately $100 million in revenue upside and a significant reduction in cost of ore production (figure 1).
ASX Release : Update on development and operating activities
Page 2 of 4
In January 2007 an exploration decline from the bottom of the Potosi open pit was commenced following the successful
delineation of a 1.6 million tonne inferred resource. This was subsequently increased to 2.36 million tonnes following a successful infill and extension drilling program. The decline has progressed to approximately 900 metres from the portal entrance and trial stoping was recently commenced. Potosi ore tonnages will increase to approximately 200,000 -
300,000 tonnes per annum over the next 30 months, with combined metal grades improving from 6.5% on Level 2 to
more than 12.5% at depth.
The North Mine Deeps extension will potentially source an additional 200,000 to 400,000 tonnes of ore per annum at
approximately 9% zinc and 10% lead grade as from 2010 onwards. The total contribution from the North Mine since
mining recommenced in 2005 has been 280,000 tonnes of ore.
Drilling immediately north of the Potosi decline has defined an open pitable inferred resource of 520,000 tonnes at 5.4% zinc, 7.1% lead and 10.4 g/t silver at the Flying Doctor deposit (refer to Annual Report 07). Infill drilling is nearly complete and a feasibility study will be completed in the March quarter 2008. Subject to gaining the necessary regulatory and Board approvals, Flying Doctor could be in production in the second half of the 2008/09 financial year. Exploration south of the existing Southern Operations has also identified the potential for open pitable deposits in the Pinnacles region. Significant drill results have been recorded at the Henry George prospect which is located only 10 kilometres from the Broken Hill concentrator.
Exploration expenditure at Broken Hill in the 2007/08 financial year will be approximately $12 million (figure 2).
Mining at the Beltana open pit will be completed in January 2008 with approximately 77,000 tonnes of contained zinc
mined to date by way of intermediate grade zinc silicate ore. The second shipment of 10,000 tonnes of intermediate
grade ore is scheduled for early January with three to five further shipments due in the second half of 2007/08.
Reliance Project The current drilling at the Reliance deposit adjacent to the Beltana open pit continues to intersect high grade zinc silicate ore. The resource infill drilling program will be completed in January with the indicated resource estimate to be updated during the March quarter.
Extensional drilling at the Mount Oxide copper project continues to intersect copper mineralisation beyond the existing inferred resource boundary. Drilling has stopped due to the commencement of the wet season and a resource update as well as a project scoping study will be completed in the March quarter.
The Board has also approved a $15 million budget to complete a resource infill drilling and extension program followed by an open pit mining feasibility study over the next 18 months. Drilling will resume in April 2008.
I like it a lot at these prices. Large company (>500M Market Cap) with a strong balance sheet, low debt and excellent growth pipeline. Trading at a very low P/E of around 5 !!!. Yet its taking an absolute battering lately with many positive announcements. And they also pay an awesome dividend! Multiple strong buy broker recommendations.
Completely oversold now! Down 10% so far today on the back of positive announcements yesterday. Like em cheap? :roll:
Big Production Downgrades At Perilya
FN Arena News - December 21 2007
By Greg Peel
Prior to this morning, Broken Hill miner Perilya (PEM) boasted a healthy 4/1/0 B/H/S ratio from the five brokers in the FNArena database covering the stock. Only UBS had decided upon Neutral based on the analyst's short term forecast of a continuing pullback in zinc and lead prices. But UBS still agreed, as the other brokers did, that the Perilya share price represented good value against the sheer potential of the company's large resource areas.
Perilya operates, among other projects, the now iconic zinc-lead-silver mine in Broken Hill - the mine that gave rise to a company by the name of the Broken Hill Proprietary, now BHP Billiton ((BHP)). As this is a mature operation it presents the company with various challenges, and 2007 has proved disappointing as many of the challenges have already led to production downgrades. But this time the downgrade has been rather devastating.
The Southern Cross area of the company's operation has been disrupted by localised seismic events. Underground rumblings are the great fear of any miner, and as we learnt from the Beaconsfield experience they can be disastrous. What has never been truly established from Beaconsfield is whether Mother Nature was at work when the mine collapsed, or whether it was the mining operations themselves that set off seismic movements.
Suffice to say, Perilya has been forced to alter its sequence of mining operations, despite no actual damage being done to date. This has meant a switch back to the safety of mining lower grade material. It has also meant big production cuts. First half zinc production is now forecast to be 26kt instead of 30kt and zinc production 42kt instead of 50kt. The cuts will likely also extend into the second half.
A very disappointed Macquarie Bank - long-time champion of the stock - has cut its FY08 earnings forecast by 63% and FY09 by 39%. The analysts now expect a $4m loss in the first half.
Macquarie also points out that there is a risk its current zinc price forecast is too high. The analysts are working off a second half average price of US$1.55t when spot is currently US$1.05t. Adjusting to spot would shave another 14cps off the second half EPS forecast. Adjusted full-year EPS currently is forecast at 21.1cps.
Macquarie has taken its target down from $4.90 to $3.60. The analysts have, nevertheless, maintained an Outperform rating, based on Perilya's "sheer size and margin leverage". They are looking ahead to development of the company's other promising zinc projects at Potosi and Flinders. At the current price level ($3.00 close yesterday, fallen to $2.66 this morning) there is still value on offer, says Macquarie.
Macquarie was the only broker to report on Perilya this morning, so the ratio stands at 4/1/0. The average target is $4.27, ranging between UBS at $3.35 and Credit Suisse at $5.00. CS last reported on November 28.
Pther projects should keep the SP up imo...
21 December 2007
Mount Oxide Resource Drilling Program and Open Pit Feasibility Study Approved
Perilya Limited (ASX: PEM) is pleased to announce a Board decision to proceed with a $15 Million resource infill drilling and extension program followed by an open pit mining feasibility study over the next 18 months.
Perilyas CEO, Len Jubber, said that the development of the Mt Oxide project was being accelerated on the basis of
encouraging drill results received so far from the recently completed drilling program to the north of the historical Mount Oxide pit.
Detailed evaluation of the current drilling will be completed when all results are received and a new resource completed in the March quarter.
Planning for an aggressive program next year means we need to start construction of a 50 man camp on site as soon
as possible, he added.
Background to the Mount Oxide Project
The Mount Oxide project is located in the Mount Isa region
western succession that includes major sediment hosted
breccia copper deposits and uranium mineralisation. The
deposit was intermittently mined between 1920 and 1971
by way of a small open pit and underground operation. The
project lies 25 kilometres north of the existing Mount
Gordon mine operated by Aditya Birla Limited.
The deposit is a chalcocite dominated system associated
with strong silica-hematite alteration and copper
mineralisation developed on the margins of the hematite
core. The mineralisation is hosted in a sedimentary
package associated with a strong structural control along
the northeast trending Mount Oxide fault and cross cutting
The current Mount Oxide resource (4 million tonnes at
2.8% copper) is 112,000 tonnes of contained copper (see
Perilyas 2007 Concise Annual Report). Mount Oxide Project Feasibility Study A program of 45 holes and 14,200m of diamond drilling has just been completed during the current field season targeting potentially open pittable mineralisation to the south and north of the historical Mount Oxide open pit. Excellent results have been reported from the current program in the June and September Quarterly Reports and on the 15th November that have included 171m @ 1.0% Cu from 11m depth, 28m @ 1.4% Cu and 0.18 % Co from 9m depth, 26m @ 1.5 % Cu from 119m depth and within the current resource 30.4 m @ 5.2% Cu from 192m depth. Drilling further north has continued to intersect visible copper and results are pending.
Confidence in the viability of an economic open pittable resource of larger tonnage but lower grade is increasing and a drill program of 40,000m is planned for next year. The program is planned to confirm the scale and grade of the shallow resource to at least Indicated status for conversion to reserves. Drilling will also test for extensions of the known mineralisation that is still open in all directions and nearby high priority geochemical targets to increase the open pittable resource. A number of deeper holes will also test for potential underground extensions. A regional exploration program will rank and test a number of old workings and potential targets identified during the year. To support the substantial
drilling program a field camp is required for 50 people and construction will start as soon as possible to enable
commencement of drilling in April 2008. A feasibility study is planned to commence in the January quarter of 2009 following the completion of the drilling
Does anybody know why Perilya jumped up 6% today? I have not seen any news that would explain why there was such a jump. The Zinc price was down last night. The ASX went up and down and finished about level. Other nickel miners went down today. (MCR) There was just no apparent reason for the jump that I can see. I bought the stock when it was $4 thinking that I had a bargain and I have watched it fall by 50% despite great forecast earnings. I am now tempted to buy more. Does anybody care to offer an oppinion?
I have been fascinated by its drop from $5.30 for some time. My simple belief is that has been oversold, and there are a number of people on the sidelines waiting to see positive signs.
When the market went down a percent or two this stock got flogged by 5-8%. So when the market has a small upside I anticipate that it will have a larger price increase than the market.
A good example of this is the high it hit today whilst the market was up. Once the market goes down PEM seems to go down even further.
what a market...blood everyhere...
I would never have expected PEM to be trading towards the low $2 mark. Did you take a position in PEM Vayama?
I thought $3.20 was cheap. lol. Glad I didnt buy much.
Aubrahamal, The chart gave strong indications of a steep fall at the $4 region with targets of $2.Now after looking again at the PEM chart if $1.90 doesnt hold it will head down to my revised target of $1.55. PEM is still technically avoind at all costs and still a strong sell .russell
At this rate PEM will be out of the ASX200 which would mean much more index funds selling. No sense buying until the December qtr report is out as the market is suggesting a weak earnings performance.
Cash position is strong which has been ignored by the market, the majority of PEM stock is held by insto's and as we all know once insto's rebalance and off load stock the share price can suffer.
I'm also waiting on the sidelines but this stock is going sub $2.00 for sure, $1.55 and I'll be in big time but I don't think it can drop that far, stranger things have happened though.
There could possibly be a short term trade in PEM a Bullish Dojo star has formed,morning star pending . I doubt highly this is the bottom though cheers russell
the sp is dropping like stone. I do not think that it will recover anytime soon. The damage is severely executed and it takes time for the investor's confidence to return
reply to deidre1.... :lol:
Maybe, I got some yesterday at $1.72, so I'm in front so far. But the price may come under further pressure when the quarterly comes out next week, and when it gets dropped from the ASX200. So a double bottom would not surprise. But a quick profit possible for the short-term trader. Good Luck :D
Some one just posted from the Endavour mine CBH...Pem been looking...now I wonder... :P :lol: :roll: :shock :D