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eps 22p YTD
Hi Ragnor,
Your EBITDA is very similar to my $126m, yours is $137m.
Your NPAT is almost the same $87m v $88m.
I have then taken off the profit attributable to THS i.e. 78.8% to bring it down to $68m.
I still have a few adjustments to make hence my number will be slightly lower excluding Fair Value.
Selling and freight are the big unknowns, freight rates have skyrocketed and I don't know how THS would be impacted
Hey Mike, Yes indeed good to know. Regarding costs, overall when comparing H121 to H120 I dont think performance should be that bad. The inflation that we are all hearing about only really started kicking in as the global recovery gained pace towards the end of the half. And in general reports are that inflation is running at 5-10% for many industrial products
Electricity is 5% of total costs and the Eskom price rise only kicked in from April 1, 2021.
Salaries and wages are less than 20% of cost of sales and the wage agreement was concluded mid way through the half. I'm guessing that the agreement was between 5 and 10%.
Diesel will put costs under pressure as the oil price rises, but for now the price for H1 was lower than the comparative half last year.
I have no idea whats happening with the global reagent market but I'm guessing that it is experiencing pressure as well
Grinding media will probably be going up as well, reflecting soaring steel and iron ore. But this should make up a small part of costs.
We are also seeing increased volumes which will lead to unit cost efficiencies to offset the inflation. The ZAR is at similar levels as well.
H2 should start to see some more serious cost impacts as inflation starts to bite and the lower ZAR is for a full period but they are ramping up production so should continue to see continued cost efficiencies. Vulcan starts in 2022 which should substantially support the cost base next year with a near 20% increase in chrome recovery
Ragnar, it is good that a few of us are generally ending up in the same ballpark!
we know that Eskom has increased the electricity price by 15%. The local costs in ZAR such as wages might be 5% or less but with the stronger ZAR, the percentage increase will be greater with the accounts in US$.
Mike and TT, my numbers for H121 are uncannily close although we get there in a slightly different way...
PGM Revenue $184m
Chrome Revenue $90m
Total Revenue $283m
EBITDA $137m
NPAT $88m
EPS 24p
Dividend 5.8c/4.1p
6E PGM Basket $2,885/oz
Chrome $123/t
Regarding costs, I look on a total unit cost basis PGM equivalent and have allowed for a 5% increase from H220. I have made some detailed assumptions around this but this increase broadly reflects the new labour agreement, fixed diesel prices and other inflationary cost pressures. It would be prudent to allow for another $10m perhaps for unexpected costs.
I have not included a fair value adjustment, and confess that I never consider this in either the SLP or THS results as my calculations always proved to be too unreliable. But if I were to guess , it would add an additional $12m to revenue and EBITDA calculated as
work in progress inventory of 3 months sales = $82m
price uplift (average April/May = 15%
82 x 15% = $12m
Thanks Mike for the numbers
I will spend the day trying to understand it and learn something more on PGM..
TT/LL, thanks for your figures it is always good to benchmark! I have total revenue $340m less COS 188= gross profit $152m, less other income/for exchange/admin 24= results from operating activities $128m, less all the finance costs/liabilities (I am assuming we have generated more than enough free cash to pay the 2020 3.5c/share divi =$9.4m and the part Vulcan investment $16m =£124m PBT less 28% tax=PAT $89M.
From the PGM figures already provided by THS we know that the provisional values are roughly $180m before Fair Value (Q1 39,300 oz @ provisional basket $2399, Q2 35,800 @$3290 less 15%). From generating the PGM concentrates to producing the refined metal takes 2 to 2.5 months for Pl/Pd but 3 to 3.5 months for Rh/Ru/Ir. For the FV I am simplistically assuming the prices for all of the PGM's are settled 3 months after despatch and the original provisional invoice. So my FV adjustment is Q4/2020 say 36,000 oz@ (2399 actual-2200 provisional)= $7.16m,Q1/2021 39,300 @ (3290-2399)=$35.0 m,Q2 35,800 oz @ say 3700 provisional value at end of March -3290 provisional value on despatch)=14.7m = FV $57m. If the PGM contents/prices are agreed after say 3.5 or 4 months the FV value will be higher on a rising market.
By all means please critique my figures and assumptions! Unfortunately ulike you both I did not get into SLP to compare but I have backtracked over the THS accounts for the last 3 years and FV calculation does very broadly match.
By all means check my assumed basket prices.
On revenue I am considering production numbers because sale numbers are not given in the quarters updates. So I get roughly 75k PMG at average $2850/oz and 730k chrome at average $145/t for a total of $320millions.
I think to be more in line with Mike for rev and profit and I definitely expect a rerating starting from coming results, also SLP had a delayed sp increase after results and THS deserve a much better rerate. What I am starting to understand with value socks and in particular miners is that the sp move after numbers....opposite to growth and secular socks like techs, where sp moves much before expected numbers ..... I suppose is the nature of the game for some reasons that I can't really understand completely...but is like this. So looking for ward for H1 financials and by end of the year who knows...
Thanks Mike,
We are pretty close on revenues - exactly the same on PGM less fair value.
My total revenue is $286m and yours is is $283m, so we are close on the easy number.
I agree on the cost increases - I have allowed for a Q1 Cost of Sales increase of $14m and other costs of $4m. I am guessing by your numbers that you have allowed for more than this particularly on your CoS number.
Fair Value - I'm still in the dark on this as to what it will be.
SLP's numbers through me recently on the scale of the adjustment.
SLP's difference between their 4E from Q3 to Q2 after smelting/penalties and contractual payments was $852 which would explain their $15m FV adjustment, but when I look at another period where the difference was $495 the FV adjustment was only $4m.
From the THS accounts and our conversations we have had I have the FV as the difference in basket Oz's due to the final assays against the change in basket price within that time frame (simplistic but good enough for basic calcs). I'm not sure that this is explaining the numbers when comparing to SLP.
I can see the FV number being anywhere from $25m to $75m, so I am hoping that your number is correct at which point I can hopefully just ask for your number in the future !!
LL/TT,
For H1 we are coming from slightly difference angles but i have profit after tax at $89 m. I calculate total revenue $340 m (PGM $237 m which includes fair value of $57m which I think is very conservative- glad to explain if you wish, chrome $90m, agency $12m, manufacturing $1m). I think some of the costs will have jumped up due to higher flotation consumables/continuing high stripping rate/stronger ZAR/considerably higher international sea freight. With dividend at 17.5% of PAT that gives a dividend of 5.7 c/share for H1 only.
I think the market wants to see some hard serious free cash and consistent PGM prices before this is rerated close to where we all think it should be.
H1's - I have an NP to THS at circa $65m excluding FOREX and fair value adjustments.
Trying to predict roughly numbers and comparing sp with previous results.
Mid November 2020 THS came out with 2020 results. The sp at the time was around 80p and eps for the full year was some 12.5p ($/£ 1.30) for a PE of 6.5.
The sp after 2020 results raised some 50% to 120p in one month....
Are we going to expect something similar with H1 results?
I am expecting £60 million net profit for H1 and again a PE of 6.5 only for H1 result with PGM prices much higher incurrent H2.....
The sp of THS puzzled me big way....It does seems to be a share that moves on results and 2020 rise was mainly after financial results. My prediction numbers are very approximate and surly incorrect on the up or down side .....