Sticking with North American Palladium

Some fantastic breaking news from PAL, North American Palladium, on the evening of April 29, 2008 prompted me to write this article.

Meanwhile the agriculture selloff of the past two days requires some explanation since my last article. Of course, all eyes are on FSLR on Wednesday for their earnings release. You remember that I predict that FSLR could go out of business altogether in a few years, due to a global tellurium shortage. Goldman Saches (GS) sold off virtually their entire stake in FSLR at the end of last year, while Piper Jaffray (PJC) issued an upgrade on FSLR. This market is a strange place, isn't it? But we all know today's market is extremely rigged. If PJC upgraded FSLR to $340 target, then it will be pumped to that target. But the reality will prevail at the end of day. How many people even bother to contact FSLR and asked for a quantitative clarification on their tellurium supply? I am still waiting for a response from them and I am ready to acknowledge mistake if they can show me with data they have adequate tellurium supply. I encourage them to go public on the tellurium issue!

But first the breaking news, a rare world record breaking event that does not happen often. With no fanfair at all, PAL announced the drilling result from their Offset High Grade Zone (OHGZ), and listed a bounch of boring numbers. Few people paid attention. But those are truly stunning numbers that made me fall off the chair. Because those results exceeded the wildest dream. They break the old record of the highest grade PGM mine bodies. PAL can now proudly claim they now own the richest PGM mine in the whole world, in terms of grams of PGM metals per ton ores. And it's right in their backyard, just a few hundred feet away!!!

Let me explain it in lay man's term. Drill hole 07-007, for example, reveals PGM grade as high as 29.69 grams per ton, or almost one troy ounce per ton. 29.69 grams per ton!!!

How good is that grade? We know South Africa is the world's largest PGM metal producer, supplies 85% of the world's platinum and 35% of palladium. But typical ore grade of South African PGM ores are no more than 4 to 5 grams of PGM per ton ores. They are making handsome profit only thanks to a much higher percentage of platinum versus palladium. The Russian Norilsk (NILSY) nickel mine, the largest palladium producer in the whole world, boasts a PGM grade more than twice that of South Africa's, but Norilsk mine's PGM grade is only 10 grams per ton.

The Stillwater Mining Company, SWC, mines a structure called J-M Reef, proudly declared on their web site that they own the world's highest-grade known ore body of platinum group metals. So how high is highest? In recent quarterly reports SWC was strugglng with ore grade of approximately 0.46 to 0.50 ounces of PGM per ton, or 15 grams per ton. That ore grade made SWC the world's No. 1 in PGM ore grade.

PAL is producing metals from ores as low as 5.66 grams per ton in its underground mine, and 2 grams per ton in its open pit mine. The operation wouldn't even be economical if not because of the much higher base metal contents. But now this poor Cinderella suddenly becomes a princess! PAL will be mining up to 30 grams per ton of ore, instead of 2 grams/ton, in the near future! That completely changed the picture.

What a dramatic new development, right at a time when PAL stock price was hammered to the ground by mindless short sellers in recent weeks. I have been holding my PAL shares tight and now the patience paid off. People! It's time. Rush in to buy! It's rare to have an opportunity to buy the world's richest PGM mine, and at a price so dirt cheap it's barely above book value!

No wonder PAL insiders have been quietly buying up shares from open market, according to recent filings. They are not shy to tell the world that they have full confidence in this company's bright future. The new discovery of the world's richestPGM mines, is just icing on the cake!

The stock price of PAL has seem some nerve wrecking movement in recent months. From the high of $12+ in may 2007 when Cramer pitched PAL as the best nickel player, to the heart breaking plummet to the low $3-ish in mid December, 07, the struggle on the bottom till mid January, 08, and then a dramatic and powerful rally all the way to $9, and then fall back in the metals correction to the current low of $4.62. I have been holding firm during all the time, and struggled to add shares.

Why do I hold PAL so firm during the turbulent volatility? Because I truly believe in Warren Buffett's investment philosophy, and because I learned my lessons in PCU, and most recently in JRCC. Both stocks were some of my best holdings and I made money in them, but far from what I could have made, just becaue I could not hold for long term.

I researched copper companies in early 2006 after I discovered the topic of "Peak Copper". I was stunned to find PCU, at an incredibly low P/E of only 7.0, plus it pays a dividend as high as 10% a year. I just couldn't believe my eyes. After verifying the facts I immediately put more than half of my money into PCU. That was a split and dividend adjusted price of $28.50. Today PCU is at $111.53. Did I made 391% from PCU? No. I was scared off during the commodity correction in the summer of 2006, and sold off. Made probably 25%. Not much after paying Uncle Sam. In early 2007 I bought PCU again, and then sold in a few weeks for a 10% gain, because I perceive there were better opportunities in something else. PCU proceeded to more than doubled from where I last sold it. So PCU was a very good stock to own but I barely get much return from it because I could not hold for long term.

The most heart breaking example is the recent JRCC, a coal mining company. I watched it for a few months and finally spend 1/3 of my 401K to load up JRCC at $4. Perfect timing. Then as JRCC approached $8, I figured there may be a correction and so I sold before it hit $8. Again perfect timing. I missed the peak by just one day. JRCC proceeded to correct all the way down to $4.76 on Nov. 19, losing almost all of its gain since $4. I was watching it that day, and figured it should be a buying opportunity. But I was not in a position to buy although the timing looked good. JRCC never looked back and rallyed all the way to $25+ recently, and I could only watch it empty handed.

What a heart breaking lesson learned! The greatest investors like Warren Buffett kept telling us, do your own due diligence study, understand what you buy, and do not be swayed by irrational reactions of Mr. Market, hold patiently for long term. Blindly following the mobs, the prefered style of investment for the majority of market participants, is not much better than gambling. Fundamental based long term investment strategy is the only successful money making investment strategy. Patience is easily said than done. Holding at happy times is no patience. Being able to hold through the lows, that is what's called patience. Why there is only one Warren Buffett? It is not because he is particularly smart. He looks like an average IQ guy. But his iron cold patience in investing is nobody's match.

Now, back to the agriculture sector. In the previous article, I point out that food grain products have limited room for upward price movement, because food is quite price elastic. Poorest population, which is the majority, MUST cut back on higher prices, because they simply do not have enough money to purchase food. Likewise, I believe the fertilizers are probably over-prices, and that stocks like POT, MOS, AGU etc., are probably already over-priced as the investor's perception is based on perception of unlimited growth of these companies, which is simply not realistic. I also suspected that the global potash cartels deliberately limit production in order to raise price, which could hurt them in long term.

It looks like in the past few days, food grains see a big sell off, as well as the fertilizer sector. Even though I expressed skepticism in the first place, I do not believe recent market move is a confirmation of my skepticism yet. My vew is it's just some normal market volatility and correction, not a trend shift. Has the global food supply suddenly become abundant, or the fertilizers? Definitely NOT. I see grain prices to continue to remain high and volatile. The situation will NOT change until the coming harvest. Likewise, fertilizer players are likely to rally again. Now is not time to short any fertilizer players. The best time will probably be around harvest time. So let's wait and see.

I see POT, MOS, AGU has some more room to go up. But I would rather stick to PAL, thanks to the stunning announcement of the drill result yesterday. Remember, SWC will announce Q1,08 earnings on May 8th, and PAL on May 12th. For the first time, the great PGM metals rally which took off at late January, will finally be reflected in the quarterly performance. So now is really the best time to get on board. Nothing in the bullish fundamentals of the metals has been changed. We will be going higher for several years.

Disclosure: The author is heavily invested in PAL and SWC, and currently holds no short position in FSLR but will be shorting FSLR soon.

Comments

[investorslive]

Nice article, for FSLR I should have covered it amazing breakout

www.investorslive.com/.../

[Alpha Seeker]

Dude, I hope you are not manipulating us invetors here.

[Alpha Seeker]

the stock opened up 4% due to your article, but now is down already 2%

[James Cullen]

Buffett also doesn't purchase ridiculously speculative holdings, but hey, what's an oversight here or there?

[forest]

The PGM grade is heavily weighted towards Palladium though. Also, many of the other holes were lower in grade.

[Alpha Seeker]

The author should try for "Best Hollywood Writer " award due to his talent to sell-whats-not-there and make an incredible story out of nothing. What better way then to pick a cheap ass stock, where we the readers could easily buy into and lift his shares?

1. If insiders knew this is going to be such a increadible deal; they would be telling their friends, hence, we are going to see it in the chart
2. The fact that we don't see any up-ticking move in the charts but on opposite, means that a) the author is manipulating us by "selling" or b) someone is manipulating him

[Marinetilldeath]

This author has been on the FSLR board on yahoo for months bashing that stock. At the same time he has been trying to get people to buy into that dog PAL. Besides, do you really trust someone who has trouble with putting together a basic, coherent sentence?

[DaveW]

Alpha Seeker -
I've been watching and investing in PAL occassionally, and reading Mark's articles. Back in Feb. he published another of his continuing saga's on PAL/SWC and the PGM's supply/demand scenario:
seekingalpha.com/artic...

Is it possible this article caused PAL's stock to surge from $5 to $9 in a two week period? Possible, but not probable. It seems more likely that other factors such as the concommitent spike in Pd prices and the electrical outages affecting the S. African mines had more affect. Yes, the author has a flare for the dramatic and is passionate on his topic. But he also openly admits to owning as much PAL/SWC as possible. Take it all with a grain of salt, but I'd not write him off.

As for today, don't overlook that PAL released Q1 '08 today, maybe that moved all things PAL just a little today?

Mark - 'forest' has a good point. I noticed too that you picked the best hole results. The average is probably closer to 12g/ore ton? Overall, thank you for the time and effort you put into the PGMs story, very interesting (and profitable).

[buyitcheap]

I feel your pain. I've adapted to it by just trailing stops and taking extra Maalox.

[Jake2]

Mark:Lose the cowboy hat . . . and the hyperbole.

[SaveTheRupublic]

Is it really posible to effect share price with a Seeking Alpha article?
I doubt it.
But just in case.....

eTrade is going to $100.00 a share by month end. Don't be left out. Buy Buy Buy!!!!!

[messels]

sounds like you just need some investment discipline. i mean, you listed two different instances where you took a small gain because of a "better" opp somewhere else only to completely miss the boat on what you had before.

churning your own portfolio just for the sake of 'chasing money' is NEVER going to work. seems like you do all kinds of research and then just abandon it. wtf good does that do?

gl.

[Mark Anthony]

Messels:

I take your advice. I have learned my lessons in PCU and JRCC. You are right I need better investment discipline. If one is convinced of the fundamentals then it is a shame to sell of shares and miss the boat. I am holding PAL firm so I will not repeat the mistake I made on JRCC.

To folks who suspect that I cherry pick the best grade from the drilling result, I did not. Conventional sense is you want to average things. But averaging is not how you judge drilling result.

If you drill all holes right through the richest part of the center of the ore body, you would of course obtain some pretty consistent high grade number. But that would be a waste of exploration expense. One hole in the center should be enough to tell you the highest mine grade at the center. Two or three extra holes at different locations of the main ore body should be enough to confirm that the result is correct. Most of the holes will be drilled near the edge of the ore body, hence result in lower grade. The purpose of such perimeter drilling is NOT to determine the main ore grade, but to determine where is the boundary of the mine body and how big it extends.

So you should NOT look at the average grade, but rather the highest grade, especially when it is confirmed by more than one holes. That is the grade of the main ore body of the mine.

[cruiser9805]

FSLR is going down. Look for info on Nano Solar and their breakthrough. They are selling Solar panels for 1.5 per watt of power generated. Unfortunately they are privately owned and not publicly traded...yet hehehe.

[pfairley]

10 gm avg Precious for that highest grade hole 07-001 with 16m true width .... 6- 7 grams Precious for others biggest ore bodies including several holes with true widths 30 to 58m about 300 to 400 meters down...platinum contents near .5 gm/ton in biggest ore bodies, gold content a little less, Cu, Ni less than .2 gm/ ton each...decent widths (10-20 meters) and metal contents in most other holes...very encouraging but not mind blowing....Better news of near term and intermediate term profitability seems wanted by most investors....apparentl... investors getting sick of hoping that losses will be less than usual as costs keep increasing. No analyst estimate? What was latest company estimate for May 12?

[pfairley]

I am enjoying your links but there is a ton of reading at the company website. Maybe someone can speed it up for me. Underground in 2008 they hope to start production in the high grade zone when the other underground is depleted? How much deeper do they have to go....Also between Dec-Jan they raised $86mil issuing about 21mil shares at $4.00. True Debt is cut in half now to about 36 mil...cash flow improving...long term projects with Vale and Goldfields look great. Cash costs for year dropped but for qtr 4 doubled to $223 on lower prodction and cdn $$..cash costs somewhat distracting from larger issues like... are they going to have to issue more shares at $4.00 again or maybe $3.00? while I am waiting??

[Mark Anthony]

pfairley:

If you want to speed it up, concentrate on the short term and long term fundamentals of the PGM metals themselves, especially palladium. If the fundamentals of the metals mandate that price must go up, then the performance of the company MUST improve overtime. The rest are just details. Read these two article to understand the palladium market fundamentals:

seekingalpha.com/artic...

And:
seekingalpha.com/artic...

Now there are only two currently producing mining companies who can claim palladium as their main product. SWC and PAL. PAL is unhedged and SWC is hedged. Both will see a great Q1, on May 8 and May 12. Both enjoy much higher metal prices in Q1. SWC gets extra boost because 11.5K platinum going off the forward sale edge. PAL gets an even bigger boost due to the way they account for commodity price adjustment quarterly. So now is a good time to buy both PAL and SWC.

[CoverMe]

Thanks for the article. I understand the other reactions to your article, but I'm more interested in focusing on the facts and ignoring their (and your) hyperbole.

Although I like to make as much off a trade as possible, I also like to wait and confirm the bottom, rather than risk the loss. Personally, i'll wait for gold to turn around before jumping into mining/metals.

Either that, or get access to Cramer's scripts and buy the day before and sell at the end of the day he broadcasts!!

When it comes down to it, I have to wait for everyone ELSE to be a little convinced (okay, maybe not EVERYONE, but lots of others at least... While I'm not trying to chase tops, I'm not trying to guess the bottom either)... otherwise I have to ride the stock down further, then wait for the recovery to come back into the black. I'm better off waiting for the recovery and jumping in early.

Thank you for putting PAL on my radar.

[DaveW]

Mark,
Thank you for further explaining the drill hole results, that indeed makes a lot of sense. Keep up the great work.

[sez_me_man]

I'm riding the treacherous PAL green serpent. All buying capped by
relentless selling. No shortage of shares available.

No credit for the incredible deposit? What's with that?

xs227.xs.to/xs227/0819...

[Jack Satan]

Minor observation - did you notice that First Solar increased their watts per panel by 9% in the first quarter? that should put them at less than 0.075 grams per watt... so for the year ending 2010 when they expect to produce 1 GW of panels - at current efficiency - they should use less than 75 tonnes - doesn't look like the end of the world now does it? Especialy since recent estimates on global production are around 750 tonnes a year...

[Mark Anthony]

Jack:

You can do your own math, at 3 microns thickness of the CdTe semiconductor layer, density of CdTe 5.85 grams per cubic centimeter, each panel is 2x4 feet hence 0.75 square meter. Each panel now about 70 watts. The efficiency improvement wasn't that significant, 10.6% in Q1,08 versus 10.5% in Q4,07, according to First Solar.

Also keep in mind, when doing vacuum deposition, not all material gets deposited 100% onto the glass with zero waste. Some NREL document suggest a waste ratio as much as 40%. Give some room for waste, FSLR needs about 250 kilograms of CdTe for each 1 MW of production.

75 tons or 100 tons of tellurium is hard to come by nowadays. I would be very happy if I could find a place to purchase another 75 pounds tellurium. First Solar recently posted a tellurium related job, which is extremely interesting. I advice you to go there have a look.

[losingmyass]

How come when I checked the insider buying of PAL in my etrade account it says "over the last 5 years there has not been an insider purchase of PAL shares"?

What's up with that? Where did or do you find insider buying information?

[Jack Satan]

Mark -

Every once in a while you are partially correct, and I always try to offer credit when credit is due. I was mistaken - the panels did not increase in efficiency by 9% over Q4 2007, but rather over Q1 2007. The direct quote from the 10Q is: "In addition, the average number of sellable watts per solar module increased by 9% in the three months ended March 29, 2008 and the average selling price increased to $2.45 from $2.32 in the three months ended March 31, 2007."
That said, the panels are not 2 feet by 4 feet, but rather 60 CM by 120 CM, or 0.72 Sq. Meters. Based on the 10.6% efficiency number, at 1000 watts per meter each panel would be 76.32 watts, (purely coincedentally almost the exact same number I had come up with incorrectly)...
We once discussed this issue in the past, and I still have not seen any documentation for the 3 micron cdte number. I have, however, shown you a NREL report in which First Solar claims that their standard process uses only 2.5 microns. it is possible that some of the confusion may have to do with the fact that CdTe is not the only substance that is used - there is also CiS which is laid down before the CdTe in small quantities which combined increases the thickness, but there is no Tellurium in that compound.

The math is then simply 5.85 grams (per cm) X .00025 (2.5 microns) X 7200 (60X120 cm panel) = 10.53 (grams of CdTe per panel) / 76.32 (watts per panel) = 0.138 (grams of CdTe per watt) X 0.53 (ratio of Te to Cd) = 0.73 grams of Te per watt - scaled up, it would be 73 Metric Tons per gigawatt... the amount that they will need for the year ending H2 of 2010, if they perform perfectly in scaling up 4 new facilities without a hitch...

As for 40% loss ratios, the machines that First Solar uses are sealed primarily so that the toxic cadmium does not seap out. They are also run contiuosly 24 hours a day... each line produces 45 MW per year at current run rates... given the cacluation above of 0.138 grams of CdTe per watt, don't you tink someone would notice if there were an extra 6.2 metric tons of "waste" that got caked onto the walls? In simple terms, yes, when working on an extremely small scale with vacuum deposition of timy particles you will have huge waste, but when you work in large scale, the waste becomes minimal... any extra CdTe that does not make it onto the glass will certainly be flushed out and recycled...

So while you may find it difficult to by Tellurium at a reasonable price, it is unlikely that there is a substantial shortage of Te in the macro sense since if you go back to that same asian metals webpage you've been touting, you'll see that Te prices have stagnated for the past month, and there are numerous articles stating that prices remain high, but no mention of a shortage.

Ultimately, I can't imagine a major issue coming out of the fact that First Solar is going to need 10% of the market production in 2011.

[Mark Anthony]

Losing Arse:

PAL is a Canadian company and insiders do not need to file with SEC on their insider sales. However they file with SEDI.CA. In my main article I already provided a link wher you can search for North American Palladium insider trades.

Jack:

You are pushing for the best scenary numbers. The CFO himself meantioned 3 microns in one of the audio recordings. each panel now is rated 70 watts. CdTe deposited on the walls can be recycled, but it's no longer high purity and must be sent to third party recyclers for treatment. In any case, since VNP is their virtually exclusive CdTe supplier, you would expect that purchases from VNP should LINEARLY increase in proportion to FSKR's production volume increase. Such increase is not shown in VNP's quarterly sales revenue.

This recent job posting on FSLR really should make you wonder what FSLR is up to and why they need to go to such extreme measures to acquire tellurium, from mines sources, which in another word, is the waste dump of mining companies. They now have a whole Tellurium Initiative Department just for that, trying to device a way to extract residue tellurium.

I do notice that the tellurium price has been an absolute flat line for the past one month at the AsianMetal web site. Normally you should at least see some sort of up/down fluctuation. The absolutely flat line probably reflect the fact that no trade has happened, and hence there is no available price information to update the price chart. There can NOT be any trade, as all major tellurium suppliers have all of the 2008 tellurium allocations completely sold out. There is nothing more to sale and hence no trading occured in the past 30 days. FSLR has yet to purchase tellurium for the new Malaysia factories.

[User 190535]

this same post was written on this blog-

stockology.blogspot.co.../

[jermp]

Mark,
Your comment about only needing one drill hole "in the richest part of the center of the ore body" is totally, completely wrong. You obviously know absolutely nothing about mineral exploration or ore reserve calculations. Goggle "nugget effect" and krieging to see how incredibly ignorant you are. Shame on you for misleading other investors.

[DaveW]

jermp,
Hey how about 'blessing' us with your supposed knowledge? A random scolding adds nothing to this diaglogue if you don't follow with, in effect, a nugget of your own tightly held wisdom.

[jermp]

DaveW,
Mineral deposits can be highly irregular - a hole 10 feet away might show very different grades. Determining ore reserves requires considerable drilling and sampling, and sometimes requires underground drifting. I'm generalizing here because different types of mineral deposits and even deposits of the same type all have there own individual quirks. High grade intercepts can be interesting, but have little value in estimating the grade of a mineral deposit. Ore reserve calculations require the collection of a vast amount of data as well as geostatistical analysis. PALs drill hole results are interesting, but this probably represents less than 1% of the data needed to determine if this mineralization is economic (ie can become a mine). Mark obviously does not realize this, hence my comment.
By the way, I am a mineral exploration geologist by profession.

[Mark Anthony]

Jermp:

Just by anonymously claiming to be a mineral exploration geologist doesn't automatically make you one. Of course if you need to find out the exact amount of mineral reserve and grade to 3 or 4 digits precision, you will need to drill a whole lot more holes to determine it. But as far as give a rough estimate and determine whether a mine is economical, a few dozen holes should be sufficient.

The whole science of explorational drilling, is to provide sufficient information for strategic mining decisions, using as few drill holes as possible, because each drill hole costs a lot of money.

So geologist, you are saying, that after PAL spent more than one whole year and $10M to drill 50 holes in the OHGZ and presented the report, you think they have collected only 1% of data needed for a strategic determination, then to collect 100% of the amount of data you would need, PAL probably will have to spend 100 years and more than US$1 BILLION to keep drilling, before you could have enough data just to answer a simple yes or no question whether it is economical? It would have cost far less to just go ahead and develop the mine, without wasting the money drilling holes.

Frankly, I do not think you can find a job in any mining company if you put your above comment in your resume. No one has unlimited resource to let you just keep drilling without producing data. You are either a fakery, or you are simply unemployed because you cost your employer too much exploration money.

[jermp]

Mark,
I was referring to your using a single intercept in ddh 07-007 of 29.69 gpt PGM and implying PAL has discovered an ore body of this grade. My comments were intended to point out that much more work was needed in order to prove your implication. If you didn't mean to imply this, then why do you claim PAL has the world's richest Pd mine?
The drilling in the OHGZ gave indicated reserves of 3.239 MT of 5.45 gpt Pd and 8.24 gpt of Pd equivalent, and inferred reserves of 12.794 MT of 5.25 gpt Pd and 7.90 gpt PdEq. Pretty good grades but a far cry from 29.69 gpt PGM and certainly not the world's richest Pd mine. Of course, we both know that average grades mined are also dependent on other factors like mining cost and dilution.

[DaveW]

Anyway.... I can't help but imagine that PAL probably employs some very competent geologists and front office folks who balance the geo-science of mining with the business plan of mining. In the meantime I locked in some healthy short term gains on today's earnings spike, in spite of the fact that the price of palladium is down. Since SWC isn't moving much today I believe PAL will eventually drop around the low $5 at which point I will add to my PAL position.

jermp - thank you for adding more constructively to the conversation.

[bighattexas]

5/13 Yeah! The earnings are finally catching up! Be Patient!

[Mark Anthony]

In a recent Thunder Bay TV interview, The VP of PAL commented on the mine grade of the Offset High Grade Zone:

cdn.dayport.com/tbtvim...

Towards the end of the video PAL's VP David Passfield says: "I don't think anybody else has really found a deposit to date that has the same sort of grade and amount of resources that the Lac des Iles deposit has."

He also emphasizes that they have not yet found the ends or bottom of the OHGZ and that it might be even bigger.

[SuperStocker]

I will see if I can get a good price for PAL on monday. It seems the time is ripe for it to start moving up.

[haigo]

Hi Mark, what is your price target on SWC and PAL and in what timeframe?

[Mark Anthony]

Heiko:

PAL currently produce roughly 300K ounces palladium and 26K ounces platinum a year, on top of byproducts of gold, nickel and copper.

I see platinum reach $4500 and palladium at $1500 being a very conservative target. The bottom $1500 of platinum and $350 of palladium, as well as byproduct metals pay for the cost, so the profit would be $3000 per ounce platinum and $1150 per ounce palladium, total $420M annual profit before tax. Give a reasonable P/E of at least 10, PAL market cap should be $4.2B, at 80M shares, PAL should be $52.50 per share, about 10 fold from here.

Time frame is one to two years. The first 4 to 5 fold gain should be achieve in the next 12 months as South Africa electricity crisis worsen in the coming winter season. (It's winter time now in South Africa, which is in the southern hemisphere).

Let me repeat this is a very conervative target. Palladium ran up to $1100 in 2000/2001, inflation adjusted that is equivalent to $3000 in today's dollar.