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Thanks Ilja, I see that the non-exec directors own a combined 104,500 shares.
And thanks for the latest chrome/The improvement in the Tharisa PGM basket price will give us a positive Fair Value adjustment in the H1 results of several millions.
Whole PGM complex on JSE taking a breather after a hard run last week
Thank you, around the highest basket (esp Karo) in quite a while and chromium, strange shares opened so down but should quickly bounce back
Chrome prices remain strong, stocks slightly down, not surprising given the normalisation post new year, PGM basket price also ticking up, suspect markets will be dominated by global data and CB reporting globally.
Spot chrome sitting at US$300/t as of this morning.
Port stocks at 2.8Mt spot this morning.
Tharisa Basket Price
Platinum $941.50
Palladium $1 086.50
Rhodium $4 550.00
Gold $2 166.90
Ruth $440.00
Iridium $4 950.00
Karo USD $1 285.77
Tharisa USD $1 436.99
Tharisa ZAR R26 944.04
Mike, details of director shareholdings are detailed on page 179 of the AR
Stemis, I accept your comment about consolidated accounts so that you would expect Tharisa to pay either way. But PP has suggested patient capital and advised that the $160m investment in Karo Mining Holdings (KMH) would be external ECIC supported funding ring fenced against KMH. Yes, Tharisa could have afforded to do this but the point is that we were told the risk of this $160m would be taken by external investors and ring fenced solely against KMH and not Tharisa. And what would it say about prudent investment at Tharisa if external investment is not found for the $160m presumably because of the poor commercial case and high risks but then Tharisa jumps in and invests the $160m
The other factor is if Tharisa shareholders are getting value for money. As at the end of Sept 2023, Tharisa has invested a total of $135.3m in KMH but the net assets of KMH were only $83.427m ( $29.528m attributable to Tharisa and $53.899m attributable to Medway/Leto). So Tharisa has invested $135.3m in KMH but owns only $29.528m in assets. While Tharisa owns 75% of the shares in KMH it only owns 35.4% of the assets.
In my opinion we need to see more transparency in the dealings between Tharisa and its related parties (Leto/Medway/Chariot). Much has been said recently about the Pouroulis family owning 42% of the shares in Tharisa but it would be good to know roughly how much skin in the game the non-executive directors have.
Clearly if they could spend $10m on share buybacks, they could have spent the extra $6m they saved from cutting the final dividend.
I understand what Tharisa have said about funding, but of they can't raise all the ring funded debt, or need to put in further capital to access it, then I don't think they'd rule out using some of their cash.
Just another thing to bear in mind is that we are looking at consolidated accounts. Whether they use their cash to fund the capex or raise debt in KMH, the net cash position of Tharisa will be the same. The only difference will be a note in the accounts to say (some of) the consolidated borrowing is non recourse to the holding company.
Feynzz, I totally agree with you about the operating cash flow, the Tharisa mine continues to be a money machine.
Back on 22nd Feb, Ilja confirmed that Tharisa's total investment after completing the 75% ownership in Karo Mining Holdings was $135.3m but we know this 75% will increase to 80% sometime this year but we do not know the exact cost or exactly when, which by past experience I am expecting to cost us roughly $75m, although it would be good to have the formula for this.
As you say, we have been told that $160m of ECIC supported external investment will be ring fenced against Karo and so will not cost Tharisa anymore. Presumably if this $160m external investment is not found then Karo simply stays on hold (which still incurs costs). But as you suggest, having already got this far could Tharisa reconsider and decide to invest the $160m directly? If not then I agree we could afford a share buy back or more progressive dividend policy, even though PP has called for patient capital. So our total investment that we have already committed to, could be around $210m ($135.3+~75) by the end of this year or around $370m if we were to decide to invest the $160m if it is not found from external investors. The recent improvement in the Karo PGM basket is a step in the right direction but we possibly need a further 25%+ increase to make Karo commercially viable.
I think they still distributed in line with their policy of distributing at least 15% of NPAT. Profits were lower and hence divi was lower. I get your point that they could have still paid a higher amount. Not sure why they need to preserve funds for Karo when they have repeatedly said that 2/3rd of the capex will be funded by ring fenced project finance so that means no more of Tharisa money? How much have they spent on Karo already? c$98m? Their equity element was c$130m I think so shouldn't really need cash for that unless they are planning to fund it all via equity?
On the other hand they cut the final dividend by 2c, saving themselves $6m presumably due to funding of Karo. So not sure spending $10m on buying back their shares would be particularly consistent...
It can be seen from reported transactions -very small sales or purchases sales volume have an immediate impact on the share price -a share buyback scheme therefore could be very beneficial for the share price
If they don't do it now they will probably never do it. Generating $40m in OCF per quarter, over $160m per annum and got a market cap of £155m with £85m net cash (last reported). I have never seen a valuation so bonkers but the company is not doing much to help the share price here.
Agree Feynz-$10 million is not martial to the over all financial position of the company-in fact it would appear very shortsighted of Tharisa not to purchase some of it’s own shares at the current price especially as the Bod acknowledge the shareprice bears no resemblance to the company’s operations and current cash generation at the Tharisa mine
Surely Tharisa could afford to announce a buyback at the current price. Even if $10m can have a significant impact on share price. Can't say they are short of funds with chrome at $295/t. Now is probably the best time to do it, it will be value accretive.
I too reinvested the dividend yesterday afternoon at 52.3, 10% more than the shares we bought and posted last week but still a fantastic price
They have cash, we have the debt for Karo so need to conserve it for that I think…
Interesting
https://www.miningweekly.com/article/tharisa-launches-its-redox-one-energy-storage-business-2024-03-12
Part of the rise today will be down to people reinvesting their dividends (like me)!
SLP is up 20% since sharebuy back started and they are only buying $3m worth of shares.
Chrome also very strong -quarterly production figures in 4 weeks and then half yearlies.
Still fear Karo is an anchor to the shareprice -perhaps the company should consider purchase of own share scheme if director purchases problematic
Is this starting to react to the increases in Pall & Plat 🤔🤔
Yeah I agree on the dollar Mike. Was a good down week but still incredibly high. It’s been non stop since early 21 and rate hikes. Hopefully they reduce them slightly before elections over there, might put a top in it at least. I think that’s the reason for the drop this week also.
https://www.cnbc.com/amp/2024/03/07/powell-says-fed-is-not-far-from-the-point-of-cutting-interest-rates.html
Chrome concentrate 40-42% price CIF Chinese ports this week is up $5/t to $295-300/tonne so we will see the Tharisa price nudge up on Monday.
Smkr, palladium price averaged $1016/oz in 2018 and was in 3 figures for 2010 to 2017.
i agree the USD has been weaker in the last week or so but probably too early to read too much into that.
Platinum going for it again
Nice to see the share trading volumes going up, hopefully a sign of some support for an increase back to a sensible share price!