Pan Global Resources (PGZ.V) wants to mine lithium in Serbia. There's a global supply glut for lithium right now, with the world's top three producers more than able to meet the world's needs from their existing reserves for the forseeable future. This company's valuation will be driven by its borates, not its lithium.
The CEO's background is hard to understand. A degree in science does not necessarily include a focus on geology. Directing business development and regional exploration are the kinds of things an MBA guy like me could do. Directing a mine from exploration to production is something else. The directors have diverse mining backgrounds but they're not the ones doing the work or making daily operational decisions.
Two of their projects have NI 43-101 reports. Further development of Jadar West and Valjevo will require US$585k each, or $1.17M if you can't add. Neither report contains verification of any MII resources so there's nothing to justify a higher valuation yet.
Check out their most recent financial statements, specifically Q2 for 2012. Pan Global had $1.6M in cash on hand at the end of July and their burn rate is about $250k/month. Their exploration program is progressing but at that burn rate they would have run out of cash in January 2013 were it not for their successful non-brokered financing on December 11. That $1M will keep them alive until the end of May 2013.
I do not know whether they will complete their drill program next spring with sufficient data for a 43-101 report on MII resources. That uncertainty, plus the world market's oversupply for lithium, makes me shy away from this company. Maybe their borates will prove to be worth something.
Full disclosure: No position in Pan Global Resources at this time.
