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The current cash held is $73 million but this will material understand to true current asset position of the company because it ignores for one the trade debtors and receivables at 31st March.
At the 30th September 2020 this figure was $112 million and must be significantly higher at 31st March 2021 due to the much higher PGM prices at 31st March.Estimating the profit figure based on cash held at 31st March is meaningless as
1-It takes no account of capital expenditure.
2-It ignore trade debtors at 31st March and the net current asset position as at 31st March-you have to also take account of stock (amounts produced but not sold) and short term liabilities such as trade creditors,taxation and short term loans.
I think this is what I meant yesterday about the market being human and lazy. It always prefers to hear a good story, no matter how fanciful, to doing its maths homework.
If you look at the big picture, Tharisa is doing exceptionally well, and it is incredibly cheap. But today will all be about a broken rotor and some lightning storms leading to the loss of about 3K of hoped-for PGM production. (Though, God knows, I should know from SLP this quarter is always the "down" quarter for a South African miner due to holidays and weather).
I've bought a few more shares at 142p this morning. Looking to buy more, especially if it gets silly, in the way that SLP has gotten silly on results days in the past.
Finally, since FXPO has been mentioned as being tipped in the Daily Mail, I'd add that this is a really bad recommendation FXPO's assets fall in the half of Ukraine that Russia regards as "theirs". Their armed forces are massing on the Ukrainian border. I don't know what the outcome will be of all this sabre rattling, but the crisis hasn't arrived yet (I'd think it will come in May). At some point fear of the total loss of its producing assets will hit FXPO, and its share price will slump accordingly. Then MIGHT be the time to buy, if you are very brave. But definitely not today.
Yep, strange reaction yet again. Revenue will be up kn previous quarter based on the higher basket price and FCF up after Capex on Vulcan.
Sit back and enjoy accumulating. This shareprice is an anomoly
Thanks, tho very sad market taking the same disappointed view as me, wish I was very wrong and they would soar as we hoped today, roll on May, as said however just when all the stars align in mining hubris is always hit, this time our (smallish) nemesis seems exceptional weather, but there is so much else hence I think the price
Sorry Sotolo that's just not correct PGM and Chrome production are both up versus the same quarter last year.
Also cash and profit are not the same thing.
Sotolo, apologies.
I'm surprised they didn't put their YoY production comparison with Q2 2020 in the headline figures and waiting until the operational overview.
+11.5% 6E and +15.5% Chrome on FY2020, despite production downtime, shows how well they are doing.
Yes, this quarter always bad weather but this time worse, Phoevos talked of the headwinds of extreme weather conditions, which impacted production more than usual, so only repeating what he said. Thanks
Full year production targets on track! This is exactly what I wanted to hear from this update.
Sotolo surely you are aware that production in the quarter ending March is ALWAYS lower than preceding quarter?
Thanks for that, also interesting Mail Midas article pushing Fxpo this am
Gosh even on this so civilised board any reporting even of what a chairman says is considered deramping so just to emphasise I am not a subtle deramper, sorry if profit and PE will be a bit higher than I thought (well actually v pleased) but as said written on quickest glance and thanked wise Visito; even so will not be as high as many of us expected. However I reami a V keen on Tharisa as the heavy capex comes good, taking more advantage of the good prices; have bought more last week, and am now up near 250k shares which is quite a lot for me, I am just slightly disappointed for the reasons given and that Mr Pouroulis isn’t more upbeat. However I remain very excited, as many have posted for the May financials, just a shame production was down which pushes up costs per ounce this quarter
They will hit predicted targets for 2021 FY. The second half of 2021 will be at a higher basket price also.
This remains on a very low PE
Sotolo - don't really care what traders make of it! I'm happy, but nothing unexpected.
Visitor, correct.
Got to love a subtle de ramper.
Thank you, still disappointing to see PGM oz down near 10% (tho luckily rhodium down near 5%, tho Palladium off 20%) at this time of such high prices, and chrome down too. This time weather, always something that pulls miners back. What do you see share price doing this am, level pegging?
You're not taking into account $9.4m was paid out in calendar Q1 2020 as a dividend, nor that its historically the weakest production Q for the year.
So the free cash flow was $36m over the Q, normalising for dividend.
Finally PE is not free cashflow and the Profit will be higher than free cash flow, with the Vulcan Capex of course reducing free cash flow.
On quick scan seems PGM production down 9% on first quarter, chrome more expensive transport and it looks like cash went up $31m which on an annual basis would be a PE of about 5 compared with over $ 50m giving PE of 2.5 many of us had been predicting. This PE is about where our share price gets at the peak of the cycle. Let’s hope it stays here and doesn’t fall a bit on these.
In the long run releasing those shares will help by making the register more balanced. The improvement in spread and liquidity since this started has been profound. I was able to sell shares out of my non-ISA and buy into my ISA at a 1% spread without even doing the bed and ISA thing. It's allowed all manner of PIs, and probably some hedge funds, to hoover up those FIL shares at what is still a great entry price.
If they had 5% on 12th March that makes 13.5m shares. Since then I reckon about 20m shares traded, with half of those sells and say 2/3 FIL that would make about 2.5% or 7m left. They should be done by H1 results next month latest
Would also be nice to get a little update in the quarterlies on what they are planning round the smelting/refining plans, what they expect the kit to cost and how much it should add to the bottom line , hopefully they have funded it with cashflow over this quarter ...
Hi Ragnar!
On the funds still selling, I think you should have said fund (singular), as in Fidelity. IMO, they look to be selling down to zero. At a very rough guess, I think they must have just over 2% left to go. One big liquidity day might be enough to finish them off.
Whatever else, there is now no problem with liquidity here!
Agree with TBTT there. Investors often focus on the headlines rather the digging in and crunching the numbers. The Q1 report met with limited reaction, volumes were high on the day but quickly faded in the days following. These news events are seen as liquidity opportunities for the funds selling down, so even if the results are good we might not see any action if the funds are still selling (which I suspect they still are)
We shouldn't ignore the production stats whatever the market reaction, you can glean a lot from the strip ratio, grades and recoveries. A key driver of the 200kozpa PGM production target is improved grades and recoveries. A PGM recovery above 80% would be a solid result. The stripping ratio of 11 last quarter was the lowest in a year so hopefully we see that start to trend down even further.
In a rising price environment it's easy to forget about costs... a lot has been invested in pit redesign/optimisation over the last 2-3 years which will be bearing fruit as we speak and most of the expansion plans require limited additional reef mining. The industry is running at 10-15% cost inflation. I think Tharisa will substantially outperform this number.
My expectation for cash generation for the quarter is $54m, for a net cash position of $60m. Thats with a generous allowance for working capital build. Saying that, we could see a surprise on cash, there was a $51m increase in working capital at September 2020. By my calcs I don't think this had unwound in the December net debt number
The last quarterlies also included a line about net cash position. If they update that number, that will also be a big giveaway.
That said, I believe the markets are profoundly human - that is more than a little lazy. So even though we'll be able to guesstimate the interim results from the information published tomorrow, I expect that the market will wait to see the interim results (due in May) before rerating this stock fully. There is probably an opportunity in that!
It's only the quarterly update tomorrow not the H1 results which are due at the end of May.
The quarterlies only usually give a production update, but if they include the average prices we can pretty much work out H1 results.
Hi, I’m aware results are due tomorrow and can see the value in the EBITDA / EV ratio and that this is significantly undervalued.
I’m looking at investing today ahead of results but just trying to work out position size.
Someone below mentioned that the next chapter of Tharisa is about to begin with results tomorrow. Would you mind enlightening me on what is about to change please - I’m seeing a strong undervalued business but not sure if there is another catalyst that I’m missing. Thanks