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As I said, onwards, sideways and upwards :) Let's GO.
looks like more delayed buys from yesterday reported.
by end of week or even from today they should be out of the woodwork, so at least then we will know where we are!
Thanks to a number of you for the thoughtful and detailed responses on this thread last night and this morning. Very informative for me; much appreciated.
It will be good to see a detailed update on feedstock in the 2019/20 financials.
things looking much better, hopefully gold price pulling up pgm prices for us.
being a cey/slp holder (like the other tiger) things are good.
tharisa update very reassuring to me.
From Tharisa RNS - selected quotes:
"The period under review saw a solid price performance for our PGM basket, totalling US$1 593/oz and while down compared to the previous quarter's record pricing, the weaker ZAR did translate to an increased local basket price of ZAR29 266/oz as compared to the price of US$1 822/oz (ZAR27 690/oz) for the previous quarter. The combination of the dramatic slowdown of the global economy and the reduced output from the major South Africa PGM producers has translated into a continued positive outlook for PGM pricing."
For chrome prices - "Market prices are trading around US$160/t. Published port stocks in China have continued to trend lower at approximately 3.5 Mt down from a high of 4.3 Mt in the first quarter of 2020."
I reckon $160/t is almost enough for Samancor to consider restarting some of the shuttered operations.
Production - South Africa in Phase 3 lockdown. (Remember, Tharisa is also a surface operator, not a deep miner.)
"Our co-product model utilising mechanised and low labour intensive mining in an open pit environment, remains well suited to deal with the impact and volatility of COVID-19."
Mini bounce today maybe partly due to a rub along of THS latest update around prices & production which seem generally pretty encouraging around PGM's and environment.
Looks like a bounce is due.
All that cash in the bank needs to be used.
Watch out for more share buybacks.
C.
Hi Jdevereaux!
But we know there are several years of "mine life" based on using the existing tailing dumps alone - I believe it's 7 or 8, but that's from memory.
Also, SLP still have fresh arisings from newly mined materials at some dump operation locations. And it looks like the bottom is in for chrome prices (they're about $155/t now compared to the low of $125/t). If that trend continues then Samancor may reopen some of their shuttered operations as well.
Finally, we should remember the possibility of deals to obtain access to other piles of chrome tailings for processing. They do exist!
I'm watching people buy companies worth £100m with no profits, limited cash in the bank, future funding uncertain, breathing a story that things might return to normal or at best 70% of pre CV19 in 2 years. SLP is projected to pay a 5p dividend in 2020 and 8.8p dividend in 2021 12.5% and 22%. My UK property portfolio which is HMO pays me 2% growth if I'm lucky and 6.65% income after tax. Would i sell my portfolio 8% and put the cash in here at 40p 12.5% plus growth? well on that return yes I would if it was quick to do, the price here is backed by its assets and a 5p dividend is £13.6m off the cash balance so easily affordable, SLP has $47.8m at today's FX rates based on the results so more now i guess. I think it will sell some assets now prices are stable, pay special dividends nearer to a total of 8p ps, and continue to churn out a boring $40-50m profit. Good point on the rhodium issue TBTT regarding the enclosed mines. Plenty of oil companies out there needing $45+ oil to turn a profit but trading with market caps of £300m.
The concern over future production, is in my opinion, the main reason for the low share price. It's as if the market is expecting SLP to wind up operations within a year and sell off assets. In that scenario, 40p would probably be fair value. How likely is it SLP can secure fresh arising? Worst case how long can they continue without a fresh supply? If the board of directors can reassure the market on this issue, the market cap will explode and I'll buy the drinks
Hi Caution!
There should be plenty of feedstock from the existing tailing piles for operations at all sites, even though the stream of fresh arisings from new chrome processing will have stopped in two locations due to Samancor suspending their own operations. Going forward, this arrangement could result in slightly lower guidance for next year - I think maybe 68,000 ounces instead of this year's original guidance of 74,000 ounces.
Social distancing measures may also add to production costs slightly, but it should be remembered that the dump operations (outside, on the surface) naturally lend themselves to good practise. I'm very happy we're not a deep miner!
At today's PGM prices next year should be a very good one for SLP.
However, Q4 results coming up won't be so great. One month totally closed down and then a ramp back up to speed must have ruined the figures. I'm hoping production will be around 8,000 ounces for the quarter (as SLP soft guided) and that the quarter will come out at about break-even.
Profits for the financial year 2019-2020 should still be excellent, but they will almost all come from the first three quarters.
I haven't a clue how the market will react to all this, but IMO the company is in excellent shape, and it could pay a humungous dividend if it so chooses (as per Liberum broker note prediction). I agree about the laughable undervaluation here.
Some more big late trades reported, hopefully all buys
I imagine the SP is being held back by concerns over Q4 production and that of future quarters. Others here will know more than me on that front and also whether feedstock will remain readily available. I’m not trying to talk the price down; I’d just like to know if anyone might have any insight on these items they might share, thanks.
This is my biggest position. It looks farcically undervalued...