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Rastuss you are correct re earning schoolboy error on my part(worryingly). My point was to illustrate valuations can change as has Lonmins, the bid is undervalued given the resources they have available, but it does reflect low PT price, high COP and investment required. Still a bargain! I know PT will rise don't know when though that's the problem! The recent uptick could be the start of the rally or just another false dawn! Some hard data about uptake of fuel cell production will be the start.
Whatamess - Thanks for your concern but all views should be welcome. Rastuss has his/her views and although in the main I disagree conflicting views can be useful as long as they are constructive.
With regards to a pe of 10 - this will easily be achieved if Pt rises. Don't forget they have a $22.75m head start with regards to the sale of Petrozim as this is valued at nil. It will be interesting when Pt rises to above $1000. It will happen, it's jus a matter of when. Hopefully before June and then we will be off to the races... If Pt rises to or past $1500 LMI could be worth billions again. It would only take gold 2-3% of gold bulls to switch into pt for this to happen imho. It's not out of the realms of possibility as it would go back to the traditional norm of being $200 more than gold.
If the PT price was $1,500oz plus now and COP $650 then with $1bn plus profit a $10bn offer would equate to a PE valauation of 10 not unreasonable so agree LMI made a mistake not accepting bid. They got greedy at a time when PT price strong. Now with PT at $900oz and COP similar level LMI PT production is marginal profit wise, its only the PD and RH prices making it profitable in 2018. If you use a similar PE ratio to value then $0.8bn valuation not be unreasonable. So agree current bid value cheap for SBGL however no other interest in LMI yet and unless PT price increases which hopefully it will, then standing alone for more than a couple of years at current prices could be hard! LMI does not have a lot of choice they must pursue takeover and sure most shareholders will agree, but you never know!
There is under valuing but what they have done is rather suspicious. Giving no value to an asset and then to sell it for $22.75m a year later highlights the incompetence of the Board. What is criminal is not accepting an offer for $10Bn as it was deemed to low and then 10 years later sell it for $250m after receiving $1.8Bn from rights issues. If the Board had any morality they wouldn't have awarded themselves with the share bonuses.
It is also rather suspicious that that there has been no RNS's with regards to the Tribunal outcome and the completion of the Petrozim transaction. As I have pointed out previously the Board want to paint a bleak picture. It wouldn't surprise me that Rastuss is in the employment of LMI to spread the doom and gloom... The dialogue has changed somewhat since the Xstrata attempt as they were dismissed as " an opportunistic and entirely unwelcome attempt to acquire Lonmin at a price which undervalues its UNIQUE ASSETTS".
Rastuss - The outcome of the Petrozim transaction and the mining licence judgement are hardly a surprise. What I find a cause for concern was the write down of the Petrozim stake to 0 having sold it for $22.75m. The impairment charge for 2017 was $1.1Bn. This now looks highly questionable to me. Even the current book value is about 3x higher than the current Mkt cap. It looks to me as the assets were written down to facilitate the SGL bid and make investors nervous as the fall of the BV under $1.1Bn would have triggered the banking covenants. Froneman wants LMI badly and he probably can't believe his luck if he succeeds on the current terms.
Rastuss never thought it was. You are right re Anglo they are in a win win situation. To me the merging of the SBGL/LMI PGM assets are a logical way of reducing COP in both companies, no matter how it happens, at the very least they need to cooperate on a commercial basis. My understanding of the geographical co location makes it a no brainer, I could be wrong! Whilst not disagreeing Jabba's position maybe at risk, his strategy is sound for a mining company to survive long term, that needs a good range of product that is geographically diversified. Jabba and Uncle Joe maybe casualties in battle but strategy to win war remains the same!
Rastuss for me investing in LMI is a calculated risk, its all about takeover happening and Jabba's strategy working. PT strike a big risk but have a feeling wage discussions may not be as bad as feared. The CEO of Anglo seems think wage negotiations will be successful he said in mining weekly 12/4 which is a different tone from Jabba. We will see who is right but suspect moves are afoot to neutralise any strike threat
What that is I have no idea but think Cyril may have a plan worked out for after election, as he needs to create a better industrial relations enviroment to encourage investment, but time will tell! I maybe being over optimistic again!
Good show another potential obstacle removed although risk was low on this one!
Demand will outstrip techological innovation in PT usage in medium term so all good on that front in my view.
LMI held up well this week looking forward to next week mcertainly sure to surprise, its why I love LMI!
The WPIC have been talking up fuel cell usage for a while. This however is relatively small beer even if grossed up worldwide, we would be talking 5+ years before PT demand would outstrip current production! On the plus side China usually exceeds production targets in faster times when they set policies. Also think demand will be greater in commercial vehicles than anticipated, for high mileage users the additional costs are unlikely to be significantly higher over a vehicle life and being enviromentally aware will win business. The risk of substitution is there, but we are talking long term from what I can gather as they are mostly in research stage. Some of the stakeholders in both SBGL and LMI are there to get security of supply of PT for future usage. Absolutely convinced this will be a game changer for PT price, the question is when!
£2 only possible if the tides gone out and LMI wearing trunks, unlikely but you never know! (love that analogy)
You can bet on it...cash offer LMI £2 per share lol
Jabba definitely upto something the question is what? I don't buy the debt repayment or to deal with potential platinum negotiation/strike financial cost impact. He does not need to do first unless under pressure from institutions which is possible, why then tinker he could have done a full blown rights issue. The costs of strike are theoretical at present and agree could be problematic, yes could be prudent but significant wage rises across platinum sector will be devastating for profitability making much of it unsustainable long term apart from most efficient! Acquisitions unlikely but you never know! I think he will surprise again, Jabba and Uncle Joe well matched for coming up with new manoeuvres!
Rastuss SBGL may opt for a rights issue to clear their debt mountain but institutional shareholders need an incentive to participate, e.g. restoration of dividend but they already promised that. If you ignore current issues in gold,
the retrenchment plan will make gold profitable so the underlying position is very positive for SBGL, so why have a rights issue, Jabba needs to be careful not to alienate institutional shareholders. In my view any future rights issue would be to fund acquisitions as a serial empire builder! Still convinced this weeks placement is tactical rather than necessary to support business. I await to be proven wrong again! Uncle Joe will drag out strike as long as he can as it his modus operandi, once the election is over think he will be put back in his box. They could start by making it mandatory for unions to publish accounts showing details what membership fees are spent on and how much union leaders earn in wages and benefits! They seriously need to consider appointing employee directors as well to improve understanding of how companies work and getting them to accept responsibility for how well a company does. Rant about SA industrial relations over!
Re LMI share price the discount has narrowed (positive at one point) and is still well up this year even after last fews days so I for one remain positive but time will tell! Yes there are still significant risks to takeover but by no means dead in water yet!
TBH Rastuss you have got everything wrong with LMI....whats to come maybe your time in the sun my man...GL with the bearish rhetoric lol
http://shortsqueeze.com/?symbol=sbgl&submit=Short+Quote%E2%84%A2
Rastuss nice to be called optimistic been called a lot worse! Whilst I agree any long term strike at LMI would probably finish it off as an entity, the last one is why LMI is where it is now and low PGM prices! I do not believe that will happen. If it does I will sell my now modest investment as business rescue beckons. SBGL may as you have suggested pick up the pieces it wants, which is most of it and it will probably cost Jabba more than existing option as he will require to buy assets from streaming co which will not be cheap! He really wants smelter and the resources co-located. Uncle Joe is living in fantasy land if he thinks they will be nationalised Cyril will not allow it (if he has sense) as it sends out the wrong message re investment in SA. I am sure he (or his sidekicks) and Jabba have discussed this threat to securing investment and have a plan! I still remain optimistic that the takeover will happen although odds widening maybe 6/4 now!
LMI have been lucky in last year or so if PD price had not improved and the SBGL bid not occured 20p would be a good price but then again they would be bust! Its been a difficult day for LMI PI's so are a tadge fractious I know I am!
It was common sense which led be to buy by the bucket load in the 40s not Bravado. What is poor strategy is putting so much time into attacking and condemning a company with no interest bar vanity...
I will take the opportunity to pick some more LMI shares up. If you are so confident that LMI will fail why wouldn't you short it? The difference between you and me is that I put my money where my mouth is.
If LMI fails they all will Rastuss. The S.A govt can't afford for LMI to fail. The unions are not in the business of running mines. Your tactics are very transparent, when the shares were 40p you were saying they were worth 20p. Most of your assumptions have failed to materialise just like your current predictions now will... Best to stick to the facts that Pt is rising and most probably will continue to do so. The LMI price yet again is suffering because of the many problems SGL are having. The Board need to grow a pair and go it alone imho...
Rastuss I had not appreciated placement had taken place so stand corrected. To me the statement and the placement is tactical ahead of wage discussions, we have no funds for high wage increases and strike action will harm job security! Agree as ever LMI needs a good PGM Bp, so if it stays as is LMI will be fine short term although their COP remains a concern we will see what next update says, not expecting it to be good but we will know how bad it is! SBGL will be of interest as well in paricular their PGM side as think that doing well albeit with some production problems at Stillwater! What is becoming clear is that unless industrial relations improve in SA mining activities the sector will shrink rapidly in next year or so and nobody wants that.
SBGL fall over done to raise the 1.8bn rand they want the placing price needs to be 16.5 rand so would expect a recovery! LMI holding up well considering and some seem to see as buying opportunity given volume today!
The LMI price is down because of SGL's problems. If we weren't tied into the deal we would be a lot higher than the current price imho. This situation has been poorly handled by the LMI Board.
The last thing the Board should be doing now is selling off assets. They should be having discussions with potential lenders. They really are clueless and useless...
With regards to the 'subdued performance by Lonmin shares', they are holding up rather well on your assumptions of shorters out in full force.