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couldn't agree more with you bangrak. For those interested I did a rough sensitivity analysis on Tharisa's earnings for FY22 on a range of different basket prices starting from an average of $2,360/oz (c30% lower than today) (Pt $900, Pd $2100, Rh $14k, Ir $3.5k, Ru $270) and I got to a NPAT (attributable to THS shareholders) of c£84m. How does that look for a £330m market cap (£310m EV).
Link to the tweet here:
https://twitter.com/feynzz/status/1406169648228360198?s=20
I find it extremely frustrating that SLP's market cap today exceeds Tharisa's. As bangrak rightly pointed, not just Tharisa has a far superior mine life (almost >5x SLPs), it also doesn't rely on ore from Samancor unlike SLP. When you buy shares, you are also buying a share in the company's assets. Would you want to own a mine that would produce 1.6x for 50 years or a mine that would produce 1x for the same price?
I am bullish on Tharisa and it can sustain a significant fall in Rh price.
This is now approaching its TNAV 114p so it's nearing a no-brainer for me, if you strip out all the Rh from its income it's still 158p on a low PE of 6. The one broker covering SLP is using $20k Rh to 2024 and did mention the possibility of $100k prices, this was after the same broker last year stuck to a basket price of $1800 for months when it was over $3000, i just don't get his figures now I think they are too high and the uptick in 2022 doesn't seem to make sense, this distorts some stocko data. The 6 brokers covering THS appear to be using a consensus of $16k for Rh and giving a slightly lower 2022 profit to 2021 which seems to be what I'm seeing across many miners, but not accounting for 200k oz of PGM and 2m tons of chrome. Ben (SLP broker) is giving a larger profit as he seems to think Rh will rise. Clearly, outlooks are different and so are forecasts but I do agree with many that THS is well equipped to still make £90m profit at RH prices down to $14k and much lower prices on the other metals, big margin of safety here. Today/now I see profits at £115m for ths and SLP £79m. My slight reluctance on SLP now ( i have both/both are great) is that it's rarely traded on a PER more than 6-7 for 5 years due to the tailings ending in 10 yrs and im not sure we will see very high Rh again. Would you buy a business with a 10-year life making £79m with net assets of 50p a share for £336m or one making £115m with 115p in net assets with a 40-year life for £313m?
Just bravely bought some more to could only get price for £30k. Do please post what Affan says
The results in a couple of weeks should be stunning, however the market knows that but is looking forward and the basket is now 20% down
Topped up Fri too, far too good a drop not too when its been pinned at 150 ask for as long as it has. I'm not worried, long term Tharisa's results will keep speaking for themselves.
Q3 update on 8th July will do the talking. HY smashed FY 2020 and q3 will not be far of H1..
Been speaking to Affan on the figures who has excellent research and may post when i get time.
This is very cheap, added yesterday 127, may add more Monday. Time to load up imo.
Is in a day like this that one would expect Tharisa to post some encouraging words of reassurance.
The truth is that clearly THS management has different plans and unfortunately policies compared to SLP.
Sure preserve capitals and profit is needed for expansion and improved production, but I wonder if the company shouldn't have bought directly shares from FI, in stead of allow them to sell on the open market. How much money were/are we talking about £ 10-20 millions? And how much market cap THS has lost since this selling is going on...? If this is a reflection of the confidence the management has on THS, one can be excused to have some doubts on future execution of company plans.
Investors here are stuck with hopes of a pgm price to hold or improve and a resident seller that right or wrong, must have some reasons to sell.
Meanwhile SLP sp is taking the opposite direction, which clearly shows that is not just technical or fundamentals but there is something more to it.