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That headline is back again!
Rhodium at $22,300/oz this morning (JMAT).
Platinum at $1,300/oz as well.
I'm here for the jackpot :)
I guess though that the windfall dividend at say 1.6p would have given double the return at the share price at the time of its announcement to the price now. Personally I am not worried about a dividend as it comes off the share price anyway and am much more interested in continued share price appreciation. Consequently I am much more interested in their future plans and the impact on the share price than getting 1.6p in cash and the share price going down by that thus making me net zero.
HunSen thank you for that analysis. My comments earlier were referring to the windfall dividend alone rather than the annual one. If you are correct at 1.6p, then even my lower figure if 3p looks optimistic. Considering the amount of cash being generated, 1.6p doesn't feel like much of a windfall. I had the impression the windfall dividend was to be a one off, separate payment from the annual dividend,hence the figures I talked about. If it is as low as 1.6p my original concern stands that the share price will be punished by the market as a result. Not long to wait now until we find out.
The board upset shareholders 6 months ago with an ultra conservative dividend. I don't think they will make the same mistake again. I reckon the special dividend will be 5 to 10 cents.
5cents really should be the minimum, that's only $14m out of a cash balance which must be approaching $100m
Ricardofin, I have been looking into dividends with the help of someone in one of my investment groups, and there is some guidance in the last annual report;
"That said, the Directors have decided to examine the possibility of payment of a ‘metal price windfall dividend’ to be paid in HY2 FY2021, to be based on any excess cashflow generated from palladium and rhodium prices achieved above long-term broker consensus prices for these metals for the 2020 calendar year. Such a distribution will take into account the actual production achieved, the actual prices achieved, and the actual ZAR exchange rate achieved. Any windfall will take into account its share of royalties and corporate tax, dividend withholding tax. I stress that any windfall will be calculated on an
“achieved basis” and we aim to pay this in Q3 of 2021."
So reading that criteria and looking at the "actuals" achieved in the period, the windfall dividend may be around £4.5m / 272m shares is 1.65p (special). That seems to fit with the forecast total dividend of 4.5p total (last years dividend was 1.6p).
I see talk of a 5p windfall dividend, while that sounds great, that is £13.6m or (if you include a progressive regular dividend) at 2.85p it comes to £21.3m. I'm not so sure that will happen.
The criteria is outlined in the last annual report, in the latest update, they say, "The Group remains debt free and continues to maintain strong cash reserves to allow for funding of capital expansion and process optimisation projects; the safeguarding of our employees during these times of uncertainty; upgrading our exploration and evaluation assets and returning value to all stakeholders."
I go along with the estimate for the special dividend at 1.6p. The regular dividend isn't due until October.
I am hoping though that the management outline their plans for the remaining cash.
ALB
a witness? :)
Having a clear out. I used to print out and keep all my transactions. Looking back, I've been in this share for over 4 years now. Sold half my stake @ 14.8p and a large chunk in the low 30s. Entirely out now as I need the cash. Interesting looking back on all of these and where they are now.
Almost all that are higher than when I traded out of them were cash-generative at the time. Many of those that weren't are either languishing way below or no longer with us.
Hi Tricky!
Yes and no.
The cash pile is mostly in rand, so the value of that (in £ or $) will be growing. That's good.
But SLP's production costs are mostly in rand and its revenue in dollars. So that's not so good.
Significant Rand strength over recent days building on momentum should assist .
Rhodium back at $21,900 / oz (JMAT), equalling its all-time high.
Iridium holding at $4,400 / oz, also its all time high. (But I think this will go to $10,000 / oz and beyond in due course, due to its unique properties as a catalyst for green hydrogen manufacture).
Platinum still rising at $1,275 / oz as well (Kitco).
I would hope that they are having a serious look at their power supply!!
It doesn't need to be a choice between the two. There is enough cash in the bank for both a significant dividend and significant capex investment.
I'd rather the surplus would be put to good use, such as developing the company further, than returning the cash to shareholders. Given the excellent returns to date, this would be my preferred option.
Not that I would mind a dividend, but why can't this surplus go towards a mild expansion of their (brilliantly run) operations?
Thank you Captain Hindsight
Should have put much of the cash in bitcoin when it was less than $10k! we would all be laughing now.
Well I am not the man for that job. I thought we would be in the 60-70 range till next years results! Given that SWimon Thompson has a target of 145p anything could happen. I guess it will recede by the amount of the dividend but that will be temporary.
Any thoughts on what the price trend/closing price next Friday might be ? Personally I think we could test 120p
TBTT I think you have nailed it there. I have the same concern particularly about the level of the dividend. I have a bad feeling it will as low as 3p, which cannot be described in any way other than ordinary. I am hoping for 4-5p and will be pleasantly surprised with 6p or more. Even if it's at the lower end if there is a longer term policy commitment to pay progressively higher and sustainable dividends in the future I think that will be well received. It's the possibility of a disappointingly low dividend and no plan for the cash that concerns me.
I think they are angling to develop Volspurit, I have thought this for a while but permits seem to be slow, I don’t think they will announce it until they are ready to go but I think that’s why they are hoarding the cash and the language in the Q reports seems to be putting more descriptive details into Vol. If this Is the case then I wouldn’t be surprised at a smaller special dividend, but if it is a reduced dividend then I think they really ought to announce their intention at the same time (whatever it is)
I’m also not sure how the market would react to a large project and the risk that comes with it (I would be happy personally)
Takeover Tharisa? Got the cash !
Also, here is an analysis of forward PGM supply and demand for the next ten years. It's heavy reading, but very bullish on the outlook for platinum and rhodium (and a bit less so for palladium).
https://www.metalsdaily.com/files/Auctus-PGM-Jan2021-FA.pdf
(Thanks to Ragnar for posting on the THS board).
It's the growing cash pile that worries me!
Sylvania have a problem - albeit one of a kind that most AIM companies would kill to have. They have too much cash.
I agree with running hte company debt-free (not all would). I agree with keeping a reserve "rainy day" fund. But there is no way that Tharisa needs to keep $80m to $100m in cash (invested largely in South African bonds) on its balance sheet. Sylvania Platinum is not a bank, or a bond investment scheme.
So what to do with all this cash? Ideally, I'm looking for them to invest into a new project, which will both expand their production and extend their "Life of Mine". (This might be Volspruit or something else). I believe this is what the market really wants to see.
Another option is to simply pay out the cash in generous dividends. The market won't be against this, but I wonder if this isn't already built into the share price.
I do fear what will happen if SLP announce a smallish special dividend without announcing any growth plans. I think the market may punish this lack of ambition.
Its the 22nd
Even in the past month the Zar has strengthened another 5% vs $ so SLP cash pile should look very tidy when interim results come out on 23rd.
A fair chunk of special dividend will be courtesy of currency gains.