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02 Dec | Purchase – Pan Pacific Aggregates

The last of our November purchases was Pan Pacific Aggregates (PPA.L).

We took up 446,161 shares (sounds impressive huh! I’d probably go with diluted) at 0.28 pence a share for a total outlay of £1,249.25. The plan here is to wait for these bad boys to hit £2.50 each and we’ve made our million and then some. Hey, faint heart never won fair maiden. Anyway, back to reality…

Here’s the spiel:

Pan Pacific Aggregates Ltd. (PPA) was incorporated in British Columbia Canada in November 2004 to develop, manage, mine and market a substantial potential resource of industrial minerals, performance minerals and construction aggregates on the Sechelt Peninsula.

We’ve taken a bit of a punt on PPA.

There’s a lot of disgruntled investors airing on various bulletin boards and when you look at the charts it’s understandable. Earlier this year PPA were testing one pence and now they’re trading at a quarter of that. The five year chart is even more dramatic detailing a one trip from – believe it or not – when PPA traded at over a quid. Speaking of 2005, here’s an article on what had PI’s so excited about Pan Pacific Aggregates in the early days.

But back to 2010. Commenting on Pan Pacific Aggregates interim results in September of this year, William Voaden, Managing Director said:

“I am pleased to report that the Group has met its targets of achieving production and generating revenue at Quadling Quarry in the period. While we remain in the pioneering and development stage, we are already achieving a positive gross margin. At the end of March, we made a final payment to RAB Capital to extinguish the convertible loan notes. The Board continues to seek out additional growth opportunities in order to move Pan Pacific Aggregates to the next phase of its development.”

In a trading update from 18th October 2010, PPA reported that:

  • Q3 has seen a 79% increase in revenue compared to Q2
  • Q3 has seen a 60% increase in tonnes sold compared to Q2
  • Q3 has seen a 12% increase in the average aggregate selling price compared to Q2
  • Recent Daily volumes now averaging over 2,000 tonnes and peaking at over 3,000 tonnes

PPA produces a bi-monthly (usually) newsletter and whilst lacking the volume of the Sunday Times, they are making an effort to share company happenings with investors. Though on the flip side according to private investors on those same bulletin boards, getting a reply to an email or a phone call answered can prove to be a difficult undertaking.

We’re hoping that PPA may have turned the corner and whilst they may not yet be setting the world on fire, from an operational point of view at least, they seem to be making the right noises. They’ve actioned debt, they’ve got a working mine, they’ve got contracts in place, they’ve got projects in the pipeline and they’ve got a local community that appears to be happy with what’s going on.

PPA probably aren’t going to make us rich overnight. This is a slow burner and a long term hold that hopefully can make us a quid or two over the journey.

Remember to do a ton of your own research. These are the ramblings of an amateur investor and none of the above should be considered financial advice. Whilst I try to do my share of homework, everything I say should be taken with a shaker of salt. If you’ve made a quid, don’t forget to pay our friends at Kiva a visit to share a little of the wealth.