maybe a bit oversold. bigger issue, not sure they have money/expertise/ect to reach production-not at these prices anyway, as far as i remember all their forecasts based on a plat price of 1600.which makes things ok. but believe it a long time till we see that again. will ultimately be bought by bigger producer, maybe even big mining house....so if you prepared to wait-personally, too risky, can't see anyone buying it at a big premium
i think they are definately having trouble raising capital as they did say they were going to use a consortium of banks including Deutsche bank, and with all the turmoil going on, they mus have trouble..i will start buying again once capital is raised, its either that or they run out of money
The cap is already raised/secured and anyway, WEZ is in a unique position that they do not yet have production costs to offset against PT prices. Their NPV of ZAR9.5bn and IRR of 18% is based on a PT price of USD1125/oz. And that was before the announcement of the deal with AMS. At present prices even AMS is not going to make money. The present PT price is unsustainable and is going to lead to many projects being mothballed. Down the line (next two to three years) that is going to create a signifficant shortfall in production and reserves of PT and eventually the cycle will turn and demand will rise. This share is a big risk right now, but it is also way, way undervalued. I see it dropping as low as 120 to 150 but then it will recover to between 200 and 400 and there it will likely sit until the run up to production.
No, the immediate 200mil they need now. I had a good chat with Fred Cornet about a week ago and they're actually quite upbeat as they see the current market being a catalyst to reducing the competition, specifically smaller operators who are now in production and feeling much pain. WEZ is uniquely positioned to weather this as they do not currently incur these costs
They used a short term rate of ZAR7.57 to ZAR8.90 up to 2012 and long term beyond that a rate of ZAR9.17 and real discount rate of 5%. I haven't worked it out but at ZAR10.00 to the USD the USD break even comes down quite a bit. The BFS is sound. A weak ZAR is good for the viability of this share once they produce PT. However, the flipside is it's going to up the cost of any capital equipment not yet secured.
i think ill be comfortable investing here once that mine capital has been raised, cos i find it hard to believe that they wont have trouble raising this, with the share price down so much and the credit crisis etc. but thanks nova