Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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Thank you Mulder. Lets hope he is accurate with his target price of 150p.
Chris Bailey, economist, Financial Orbit Founder.
Mulder
Who has the 150p target price please may I ask you?
Market cap is now ~ $210M
'Although the shares have already recovered a bit from below 65p, a market capitalisation currently equating to well below $250 million doesn’t look to allow much for the improvements potential considering its noted current performance and the cash. Having suggested share price upside to 150p+ with macro challenges in major production regions and macroeconomic recovery potential, our stance remains Buy.'
Thanks, bangrak. I have an excuse for a beach visit now!
Q2 profit will be interesting given the apparent lack of volatility in basket price and thus an expectation of lower revenue adjustments: it might give me a better steer for profit expectations for the year. Maybe my 10-12m USD is too bearish.
Hi CYB, I will the next time I'm up in BKK, i'm south on KS so if you are down this way let me know. Now prices are flat there shouldn't be large revenue adjustments so this $4-5m q looks ave. I have current PE 10 CA to 5 so the value here is better and it hit 65p exactly as someone said it would a few weeks ago ;) some might be tempted but not me at this stage. China car sales are up 13.8*% YOY.
Seconded.
ATB for your future Stuart.
DH
Thanks, Stuart, for the great job you've done as chairman. Sound operational and financial strategy, great execution, straightforward, no-nonsense.
I smiled when you quoted a number of posts, including mine, from this forum in your annual report a few years back.
If only all AIM-quoted natural resources and energy companies could have such top-notch chairmen...
All the best in future endeavours.
If that drops to the 50s then I happily add without hesitation.
Hi Bangrak
You're more knowledgeable on these revenue adjustments than I am. On my (probably more basic) analysis of operational gearing in historical numbers, I'm only getting to USD10-12m profit after tax for the year to June 2024.
You're correct that clearly JMAT aren't getting particularly bullish on PGMs for the foreseeable future. My gut says that the EV discourse has a bit of an emperor's-new-clothes moment when people realise that they're about as green as blood. This *may*, in the longer term, support PGMs, but I certainly wouldn't invest on it. The marginal ounce determines price and the Chinese have truly swallowed the EV kool aid....for now.
Completely agree on the brokers; they're just too bullish. When they adjust (probably after the Q2s), I'd expect a bit of a price correction.
My FV price is mid-fiftys given where historical forward PE has been. Therefore my buy price has to be at least 20% below that, so under 50 pence. It may never get there, but it's still worth watching: these things have a habit of over-adjusting eventually.
I should probably change my name to Sathorn if you're Bangrak. I'd be happy to meet for coffee if you're padding around the Silom area.
CYB, I've had a refresh of the JMT report again and it seems very clear to me that the 2019-22 spike caused by a supply squeeze has now normalised with supply demand seemingly well matched. What I'm not understanding is why anyone including the brokers here expects Rh to rise to the levels they are using in their analysis. Logic would say that they should be using a figure more aligned to this balanced period that is somewhere between 4100-6600 (200d ema) midpoint 5300 or net $24m. At today's SP that's a FPER of 9 cash adjusted 5, and as you say this is much higher than the norm here. Allowing for the first Q adjustments I see $16m now as net, that's $12m below (42%) the current consensus. Not a big short opportunity here but would i go short if it went up too much considering that many investors see the results and sell off? something that also might interest some is the receivables v say THS, very different periods needed to actually get the cash in. 249 days v 132 days.
Just follow Steel copper aluminum and Nickel prices as these are the top 4 transition metals, what people say means nothing it is what they do, Ferrari now sells more EV than full ICE. Fashions fade and so do ideas.
Https://electrek.co/2023/04/07/toyotas-new-ceo-adjusts-ev-plans-but-sticks-to-a-hybrid-approach/
This is a picture-perfect example of a large corporate caving in to the eco-mob, aided and abetted (as ever) by lazy journalism.
I urge people to watch the Robert Friedland video in my initial post on this string.
I prefer scientists over activists.
Thanks, LN: will do.
Indeed dubzy
And whilst they were at it, they also explained that they did not anticipate these high levels of prices to continue ad-infinitum, ergo the cash balance for situations just like this one (or the one to come)
Hi cautionyourblast.
Have a look at Toyota's view on EVs. They maintain that the only feasible solution is hybrid.
I attach two excellent truth-bomb videos here. Peter Zeihan and Robert Friedland are both superb thinkers. Their messages are why I remain very interested in SLP as an investment (just not at current prices). There's the small matter of getting the CCP to buy in to the logic, of course.
All the virtue-signalling Torquils and Jocastas at the BBC would do well to watch and listen.
https://m.youtube.com/watch?v=8P95NFlAnmY&pp=ygUYemVpaGFuIGVsZWN0cmljIHZlaGljbGVz
https://m.youtube.com/watch?v=dWbDHovRuHU&pp=ygUQcm9iZXJ0IGZyaWVkbGFuZA%3D%3D
The BoD has historically been admirably dispassionate on dividends with Jaco continuing where Terry Mc left off. The policy is pretty clear, though they could change it of course.
I'm struggling to see a profit after tax of much more than USD10-12m at current basket price levels. A much lower FY24 FCF than FY23 will surely result in a significantly reduced dividend: that is likely to drag on PI sentiment. That said, the dividends are of course a sideshow to the underlying financials.
This is well-run company that is trading on a forward PE (on profit estimates at current basket price) which is significantly higher than it has been in the last few years (even taking account of the cash pile). I'd certainly like to buy back in at some point, but that price point well below today's price.
As a side note: EVs are virtue-signalling delusion on a global scale, but it doesn't mean that the Chinese will stop manufacturing them (coal-fired cars). PGM prices are anyone's guess but the Matthey analysis is worth reading.
Bangrak, assume short or wanting to get in at depressed levels?
I remember when many investors were screaming for the BOD to return more of their cash reserves when their cash mountain was climbing. Luckily the BOD are running the company and not retail investors. The BOD are excellent and that's why I continue to hold.
Looking forward to seeing how the company continues to diversify over the coming years.
They are however using approx $7k for rhodium.
To get to $7k rhodium for the FY it needs to go to $8.9k today and stay there until July. In the latest THS results, they said this......."We see muted upside in the short term for PGM prices. In the medium to longer term demand drivers including the hydrogen economy, possible supply cuts at unprofitable PGM producers, project delays and capital discipline versus demand for the ICE, will require a recovery in PGM prices to ensure demand is met by supply"
Your house broker (not edison) says this "We believe that the rhodium price will lift substantially in the coming quarters as destocking by glass fibre and automaker OEMs comes to an end. There is further upside risk from supply disruptions in South Africa and Russia"
Who do you believe?
The reality is, that you will not get near to what Ediison & the house broker are suggesting for earnings unless the above happens. The house broker has stated in a note "Cash margins are still positive, if minimal, at $19/oz" .40% of that is very small even if they decide not to include cap ex. Rh has averaged $4250 since the new financial year. As I've said previously if i use oil at $200 for calculations i get some really impressive numbers for my oil companies. The reality is i use an average of the next 12m futures prices updated daily and ignore analysts unless there are several independent ones.
A collapse in PGM prices and closure of mines resulting in a severe shortage of PGM's is akin to the situation we had during covid. That is your event to watch for.
SLp stated policy is to pay out 40% of adjusted free cash flow as dividends. If you take a look at the Edison report it states……
We expect ordinary dividends to reduce in FY23 to 5.8p per share, from 8.0p per share in FY22, and to 3p per share in FY24, before rising to 4.0p per share in FY25.
We expect Sylvania to continue to be cash generative with little or no debt over the next few years. Because of this ability to generate cash, we forecast cash levels in FY24 to increase to US$135m (currently US$125m) and US$152m in FY25
hTTps://www.edisongroup.com/research/lower-rhodium-prices-overshadow-strong-production/32555/
Bangrak
Thanks for your input regarding this matter. 1-2p would come as a shock to many shareholders after an 8p dividend this year and 10.25p the previous year. I personally hope they will use some of their cash pile so they can pay a yearly dividend of more than 1-2p. What do other posters on this board feel about this matter?
Owls, consensus is 3.3c so 2.6p but that is on much higher rh estimates, cash generation down here is virtually non-existent, the house broker has stated $19oz is being made so on 75k it's not much. Depends on what SLP management wants to do, if they have confidence the good times will return then they can pay whatever they like as divvy cover is ok, but if they stick to the dividend % agreed which I think was 30% or similar again it's nothing much maybe 1-2p if lucky. If I was on the BOD I would save the cash until they are sure things are recovering. Platinum doesn't do much to the profit like rh does. Ironically I was using this example in my last post about ST excitement over spot rises missing the RH contribution.....QED
Possible Platinum breakout in-play chaps.
Bangrak
Your forecasts have been accurate with regards to so many issues relating to Sylvania Platinum so please may I ask you what you believe the likely dividend will be for the next year. Taking into account the likely much reduced profit and their stated dividend policy I can only see a substantial cut in the eight pence dividend which has and will be paid this year. However the company could use some of their significant cash pile to maintain the dividend do you and others on this board consider this to be likely and if so would it be beneficial in terms of the companies share price.