PAL

[jorgegr]

bmark4211:

Talking about PAL.  You nailed it PAL . Applaud !!!

David don´t waste your time and ours on these issues. New applaud for you.
There are some people that try to grow under the shadow or at leader's expense.
Just a suggestion (and last) for sarcastic profile guys please avoid arrogance in
your comments, just stick to TA & specific fundamentals and all our community
will enjoy everybodies thoughts.

[akclide]

My analogy in this matter is very simple.This site is owned and operated primarily by David and Ramsburg.We are all guests either paid or unpaid.We may not have to accept everything said by the host but we sure have to respect it.As far as guiding people to the right path we have bunch of numb nuts doing that already, they are usually know as analysts.Let people make their own decisions right or wrong, so that they can grow as better traders or investors.

[David Randolph]

PAL continues to consolidate recent gains and it is now a $604 M market cap ming company. I truly enjoyed the 1st quarter results, let me make some highlights:

- Revenues in the first quarter of 2007 rose by 117% to $68.4 million compared to $31.5 million in the first quarter of 2006. Palladium revenues of $31.1 million increased by 85% while by-product metal revenues of $37.3 million improved by 154%.

I expect growth going forward, but if the next three quarters are similar to the first, PAL will have 2007 full year revenue of $273.6 M, so the company is trading at a forward sales multiple of 2.2. The Industrial Metals & Minerals industry trades at 3.25 times revenues.

Let me make a quick comparison between PAL and SWC, its closest competitor, using just Q1 2007 results:

- PAL had sales of $68.4 M, SWC had sales of $146 M. PAL's price to sales ratio (considering just this quarter) is 8.83. SWC's is 7.94.
- PAL had net income of $5.507 M, SWC had net income of ($1.06 M). PAL is profitable, SWC is losing money.
- PAL's revenues grew 117% from Q1 2006. SWC's revenues grew 5% over the same period.
- PAL's market cap is $604 M, SWC's is $1.16 B.

I think there's no doubt PAL is much more attractive than SWC. I'll keep holding PAL.

[yukiii]

Volume has been going down since crammer hyped it, looks like it will fill the gap to $10.20

Nickel Down 10% this week so far does not help, this was crammers nickel takeover play. 22% of rev is from Nickel.

[David Randolph]

Volume has been going down since crammer hyped it, looks like it will fill the gap to $10.20

Nickel Down 10% this week so far does not help, this was crammers nickel takeover play. 22% of rev is from Nickel.

Yes, but Palladium accounted for 45% of revenue. It's interesting to note that Palladium revenues rose 85% from the year ago levels, but Palladium prices rose just 6.7%, which means production increased a lot:

North American Palladium Reports 68% Increase in First Quarter 2007 Palladium Production

The stock closed right at the $10.79 short term support. Perhaps it will go down to close the gap at $10.23, but I believe fundamental value is superior, since PAL is a $578 M market cap mining company, which will have 2007 revenues of at least $274 M and it is profitable. I defy anybody to find a more attractive mining company in fundamental terms (ex-copper, because those are the still the cheapest).

I'll keep on holding PAL.

[yukiii]

PAL    $ 10.83
North American Palladium Ltd   0.04
Shares Short   2,119,000
Days to Cover (Short Ratio)   4.5
Short % of Float   7.89 %
Shares Short - Prior   1,346,200
Short % Increase / Decrease   57.41 %

[David Randolph]

I feel more confident with PAL than with ROY because of the two following issues:

1) Palladium is at the start of a new bull market. Nickel already had a 400% or so advance:





2) PAL has a 2007 estimated price to sales ratio of about 2 and ROY of about 7.

Moreover there's an emerging trend on stainless steel makers (nickel's biggest buyers) to substitute nickel for less expensive metals or diminishing the grade of nickel in steel. The situation for palladium is inverse, it is starting to be used as a substitute for platinum, which is 4 times more expensive.

I'll continue holding PAL.

[yukiii]

David
If you listen to CC and read there report, they say production for 2007 will be 290000 ounces
The first quarter was already  79,000 ounces that would be no growth going forward.
Also for some reason  cash cost per ounce was only $15 per oz in the first quarter.
On the conference call he slipped it out that cost would be around $40 per ounces.
2007 earnings around .25 to .28
That would make the first quarter hard to beat and the value for Pal at $10.75 to $12.00 for 2007
2008 would depend on the price of Palladium.

[David Randolph]

David
If you listen to CC and read there report, they say production for 2007 will be 290000 ounces

I'll listen to the conference call for the next update, thanks for these highlights yukiii.

The first quarter was already  79,000 ounces that would be no growth going forward.

The way I read it yukiii, the 290,000 ounces were palladium only:

«Palladium production at the Lac des Iles Mine is on track to meeting previously announced guidance of approximately 290,000 ounces»

And Palladium production in Q1 2007 was 70,634 ounces. Anyway, no significant growth in production expected, they're expecting to keep producing at the same rate as in Q1 2007 for the remainder of the year. But that represents strong growth from the year ago levels, since palladium production in 2006 was 237,338 ounces (and 177,167 ounces in 2005).

Also for some reason  cash cost per ounce was only $15 per oz in the first quarter.
On the conference call he slipped it out that cost would be around $40 per ounces.

Hmm, that's a $25 difference on the cost. Palladium prices are $368 - $346 = $22 higher now than the 1st quarter average, so we're talking about a $3 profit per ounce difference from Q1, where the company had $0.10 EPS.

If palladium prices rise some more the company will easily surpass the $0.10 EPS it had in Q1 2007. Therefore I believe your expectation of ...

2007 earnings around .25 to .28

... is too conservative. I see at least $0.40 2007 EPS.

That would make the first quarter hard to beat and the value for Pal at $10.75 to $12.00 for 2007
2008 would depend on the price of Palladium.

My take is PAL doesn't need to beat Q1 numbers because its revenue and earnings multiple should expand. It's one of the cheapest mining companies outthere (ex-copper mining).

I'll keep holding PAL.

[wxmang]

"Brother, Can You Spare a Nickel? North American Palladium Ltd. (PAL)

Although PAL is known for its palladium, Cramer thinks this $10 stock is a great way to play nickel consolidation. PAL is not yet a well-loved stock, is not covered by any analysts, and if it gets a takeover bid for its nickel, Cramer comments he "can't even imagine how high this orphan stock would jump." He notes nickel prices are rising while PAL's production costs are falling and the company produced 2.7 million pounds of nickel last year. He believes it will get a bid, but warns that it is a speculative stock and investors should use limit orders when buying."

http://seekingalpha.com/article/34948

I think you need hold this puppy for the "take over" possibility as well.

[David Randolph]

"Brother, Can You Spare a Nickel? North American Palladium Ltd. (PAL)

Although PAL is known for its palladium, Cramer thinks this $10 stock is a great way to play nickel consolidation. PAL is not yet a well-loved stock, is not covered by any analysts, and if it gets a takeover bid for its nickel, Cramer comments he "can't even imagine how high this orphan stock would jump." He notes nickel prices are rising while PAL's production costs are falling and the company produced 2.7 million pounds of nickel last year. He believes it will get a bid, but warns that it is a speculative stock and investors should use limit orders when buying."

http://seekingalpha.com/article/34948

I think you need hold this puppy for the "take over" possibility as well.

Yes, there are some big global players buying nickel related companies:

«On Wednesday morning, Xstrata  (other-otc: XSRAF -  news  -  people ) announced it was selling all of its aluminum interests to Apollo Management for $1.15 billion. Apollo Management is a New York-based private equity firm run by billionaire Leon Black, the 160th richest person in America.

The divestiture of the aluminum assets doesn't come as a complete surprise since the Swiss miner has focused on its nickel production recently. The company only acquired the aluminum assets in its purchase of nickel miner Falconbridge in 2006.

In late March, Xstrata announced it would also buy the Canadian nickel miner LionOre Mining International for about $4 billion. (See: "Xstrata Sees Value In Nickel.")

Chief Executive Mick Davis of Xstrata explained that its aluminum holdings were just too small to compete with bigger producers. "These assets do not provide Xstrata with the necessary scale or upstream exposure to represent a suitable entry point from which to build a world-class aluminium business," he said Wednesday.»

Anyway, I don't like to speculate around these takeover possibilities. They may take years to come or never happen at all. Also, PAL is more of a palladium company, instead of Nickel (even though 28% of its revenues in Q1 2007 came from nickel production).

Where's yukiii's bearish post about PAL? There was a lot of juice in it. Perhaps he opted to stop being such a drag and buy the stock instead I hope so. (I'm just kidding, although we've had some tough divergences in the past, yukiii's comments have helped me to look deeper on my holdings - getting more or less confident about them).

Technically PAL held $10.79 on close, and in my view it will trend higher and ultimately breakout above the descending trendline on the chart, which currently stands at $11.41.

I'll keep holding PAL.

[yukiii]

Still here, finished with my comments on PAL, I like EGO much better.

[David Randolph]

Still here, finished with my comments on PAL, I like EGO much better.

EGO, a $1.87 B market cap with $77 M in revenues in 2006 and EPS of $0.01 (therefore trading at 570 times trailing earnings). Good luck

PAL is a $571 M market cap with projected 2007 revenues of about $280 M. In my view EPS will be something like $0.4 (it was $0.10 in Q1 2007).

If palladium prices breakout above $382 (closed at $373 yesterday) ...



... no doubt PAL will also breakout above its short term descending trendline, currently at $11.35. I'll keep on holding PAL.

[yukiii]

Its all in the way you look at things.  I look forward you are looking at the past.
rev 2007 213.99M   Rev  est 2008  258.93M     
.01 2006 .21  2007   .30 2008

Press Release   Source: Eldorado Gold Corporation

Eldorado Gold Corporation: Q1 2007 Financial and Operational Results-Record Earnings
Friday May 4, 7:59 am ET

VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--May 4, 2007 -- (all figures in United States dollars, unless otherwise noted)
Paul N. Wright, President and Chief Executive Officer of Eldorado Gold Corporation (Toronto:ELD.TO - News)(AMEX:EGO - News), is pleased to report on the Company's financial and operational results for the first quarter ended March 31, 2007. "This was a very successful quarter for Eldorado," he stated. "We produced over 88,000 ounces of gold at an average cash operating cost of $220 per ounce and fully expect to meet our forecasted 2007 production of 310,000 - 330,000 ounces of gold at an approximate cash operating cost of $225 per ounce."

ADVERTISEMENT

Q1 2007 Highlights

- Generated record earnings of $0.04 per share.

- Began commercial production in February at our Tanjianshan gold mine in China, producing 26,770 ounces of gold at a cash operating cost of $260 per ounce (Total production for the quarter for Tanjianshan was 39, 252 ounces of gold).

- Produced a total of 88,780 ounces of gold from our operations at a cash operating cost of $220 per ounce.

- Completed 14,000 meters of drilling at our Efemcukuru project in Turkey.

Financial Results

Our consolidated net income for Q1 2007 was $12.6 million or $0.04 per share compared with a net loss of $7.5 million or ($0.02) per share in Q1 2006. Cash flow generated from operations before changes in non-cash working capital totaled $20.2 million. This increase in net income resulted from higher revenues from gold sales due to both increased production and higher gold prices, increased interest revenues and lower production costs, offset by increased exploration activities and administrative expenses.

In Q1 2007, we sold 64,177 ounces of gold at an average price of $647 per ounce, compared to 15,656 ounces at an average price of $549 per ounce in Q1 2006. In the first quarter of 2006, we were only producing gold from our Sao Bento mine; now, one year later, we are producing gold at Kisladag and Tanjianshan, our low-cost mines in Turkey and China respectively.

Operating Performance

Kisladag

At the end of the quarter, the Kisladag leach pad held 7.8 million tonnes of ore at a grade of 1.2 g/t Au, and we produced 43,601 ounces of gold at a cash operating cost of $192 per ounce. During the quarter we mined and placed 1.8 million tonnes of ore at an average grade of 1.2 grams of gold per tonne on the leach pad. In 2007, we are forecasting production of 190,000 to 200,000 ounces of gold at a cash cost of $210 to $220 per ounce.

We continued to work on expanding the mine, which included bringing on line an additional five million tonnes per year of crushing, screening and conveying capacity, increasing the total screening and crushing capacity to 10 million tonnes per year. Additional expansion activities include constructing three additional leach pad cells, building a truck and crusher maintenance shop and adding pond capacity. Commissioning of the new system is underway with steady state production at capacity anticipated in Q3, 2007.

Tanjianshan

Tanjianshan officially commenced commercial production on February 1, 2007 and in March we received our Gold Mining Certificate from the National Development and Reform Commission of the People's Republic of China. During the first quarter we produced 38,252 ounces of gold of which 26,760 ounces were for commercial production at a cash operating cost of $260 per ounce. We mined 117,000 tonnes of ore at average grade of 6.56 grams per tonne. We are forecasting 2007 production of approximately 120,000 to 130,000 ounces of gold at an average cash cost of $235 to $245 per ounce.

Sao Bento

During the first quarter, we processed 20,069 tonnes of ore at a grade of 8.88 g/t Au and produced 5,927 ounces of gold at a cash operating cost of $245 per ounce. We ceased ore production at Sao Bento on January 20, 2007 and are now working on mine reclamation activities at the site.

Development

Efemcukuru

Drilling to support the Efemcukuru Project feasibility study continued throughout the quarter with work completed by three contract and two Tuprag drill rigs. Drilling in the quarter totaled 8,010 meters in 39 holes with approximately 6,000 meters remaining to be drilled.

Activity focused on the South Ore Shoot ("SOS") area. Drill holes here continued to target gaps in the drill coverage, concentrating on delineation of the higher grade and thicker portions of the system. Ongoing drilling is also testing the down dip and plunge extensions of the SOS vein and gold mineralization. Middle Ore Shoot ("MOS") work focused on infilling an existing coverage gap above 600 meter reference line to surface in the high grade portion of this zone. MOS drilling also tested around the KV-141 intersection to the south. Transition zone (KV-129 area) holes have also been started this quarter. Looking ahead we will focus on infill and extension targets in SOS and transition zone.

Work continues on the Efemcukuru feasibility study with completion anticipated by mid-year.

Villa Nova Iron Ore

We completed in 2006 a pre-feasibility study of the Vila Nova Iron Ore project in Brazil showing a pre-tax net present value of $91.7 million, on a 100% basis. Permitting for the project is at an advanced stage and we plan to make a construction decision in the second quarter of 2007.

Exploration Outlook

Our total exploration budget for 2007 is $14.2 million, which will be used to fund exploration activities in Brazil, Turkey, and China. The programs in all three countries are results driven and may be adjusted during the year to reflect priority targets.

Turkey

During Q1 2007 we concentrated our exploration efforts on three of the Biga Peninsula properties which are accessible throughout the year. As weather permits field crews will begin work in the Demir joint venture and in the Pontide district.

On the Biga Peninsula during Q1 we drilled at the Kirazli, Kuscayiri, and Dogancilar concessions. At Kirazli, nine short reverse circulation holes were drilled to test a high sulfidation trend. The best results were 4.9 g/t over 9.0 meters and 6.5 g/t over 4.5 meters. Reverse circulation drilling at Kuscayiri (8 holes) targeted anomalous gold in soil samples. It appears that the holes intersected high sulphidation mineralization and alteration, and areas of more porphyry-like mineralization, but with generally low grade gold values. Mapping and sampling continue in both properties.

Diamond drilling began on the Dogancilar property in March with 425 meters drilled in three drill holes. Target for these holes was the Kecikiran vein. The vein was successfully intersected in one of these holes: stockwork type mineralization was intersected in the others. Assay results are pending. Review of core logs of the older 1990's holes show that porphyry style alteration and mineralization are present that may not have been fully recognized in the past. This core will be re-examined during the next quarter.

Exploration plans for the remainder of 2007 include drilling programs at the high sulfidation target on the AS project (Demir JV), as well as at Mahmur Tepe, Koyulhisar, and Aydogan Tepe, all in the Pontide Volcanic Belt. We will also continue our aggressive grass roots and generative programs in geologically prospective terrain throughout Turkey.

Brazil

The final assay results on step out holes at the Vila Nova joint venture gold project ("JV") did not show intervals of either significant grade and/or mineralized widths. Our review of the data during the beginning of the quarter led us to conclude that we should decline the option to continue participating in the JV.

We began exploration work on our 152,000 hectares of 100% owned license adjacent to and around the former JV license block which consisted of soil and stream sediment sampling programs in the license blocks immediately north of the former JV ground. This work is assessing the north extension of the Gaivotas Shear and coincident airborne geophysical anomalies.

At Tartarugalzinho we continue a systematic southeast to northwest evaluation of geophysical targets and regional stream sediment anomalies. Next quarter we will focus on the middle to northwest portions of the property.

For the remainder of 2007 we will continue to work at Tartarugalzinho and in the Vila Nova area to define drill targets to be tested later in the year.

China

We mapped and sampled a mineralized area immediately north of Jinlonggou ("JLG") previously mined by Qinghai Number One Geological Brigade. The results are pending. The mineralization appears to be hosted in bedding parallel shears (similar to the upper part of JLG mineralization). We prepared drill plans for this zone in anticipation of an early May start. This zone is currently not a part of the JLG resource or reserve.

Drill plans for other short term targets in Qinlongtan ("QLT") were also prepared and reviewed during Q1. These targets include QLT deep (below pit extensions), QLT South showing, and an area adjacent to the western edge of JLG.

"The first quarter of 2007 marks a significant milestone for our company," stated Paul Wright. "We ceased production at our Sao Bento mine, marking the closing of an important chapter in Eldorado's history. At the same time, we began commercial production at Tanjianshan and continued to show excellent production results from Kisladag. Our two low-cost operating mines, the ongoing development work at Efemcukuru and our three-country exploration program will enable us to continue growing the value of our company."

Eldorado is a gold producing and exploration company actively growing businesses in Turkey, China and Brazil. With our international expertise in mining, finance and project development, together with highly skilled and dedicated staff, we believe that Eldorado is well positioned to grow in value as we create and pursue new opportunities.

[David Randolph]

Its all in the way you look at things.  I look forward you are looking at the past.

Hehe, I knew I would bring you back to the debate. I'll look at EGO over the next update. Just food for thought, management likes to dilute.