Just started a new position on PPP. This inital buy is about 20% of what I am planing to buy overall. At $1.36, PPP is looking attractive. To start PPP is a mess: tax problem, san dimas AISC runing very high, black box has been a nightmare.
Well dont know when the tax issue will settle but hope its not a loss. during the low gold prices, ppp ran san dimas without much upgrade and now they been putting money into the mine. 2017 should see san dimas running better and making money like it did before. The new claims next to san dimas which are outside the silver wheaton royalty should be a top priority and the management seems to think so too. They have fast tracked the exploration activites at Lechuguilla and intial thoughts are encouraging. If the tax issue goes against PPP, this new area has to be gold or else ppp will fall further. I believe the claims outside the royalty area are good and will be a good catalyst to look forward to.
Black fox has been in upgrade mode since it was acquired and its been almost 2 years. The fruit of all this work on black fox should be paying off in 4Q and 2017. While watching the presentation at denver gold forum, I was stuck with the thought of what the ceo said about black box. Till present, the tonnage for black fox has been made possible from many different work areas thus by increasing the cost to get few tonnes. Going forward, the deep central zone will provide majority of tonnage through long hole stopes bring the cost down and the grades are running from 8-11 g/t. The upside of finding higher grades in deep west and below central deep zones seem highly probable.
Also in near by area, they are developing the froome deposit which should increase the mine thoroughput. The black fox mine that has been a drag for so long looks like will be a major contributor and help ppp.
Going forward, the AISC shoule be goind down for both san dimas and black fox. once the production and cost returns to normal which i think will happen in 4q and 2017, the ppp valuation should catch up to other mid tiers. I had bought shares when ppp had tax issue before too and it gave me very good return even during the gold downturn. ppp is a good company. the management however handled the tax issue in very poor fashion. Hiring of Ms.fortier should help in dealing with the tax issue.
Will add more shares once i see the q3 numbers and what management has to say. Will be adding shares below $1.50