Member Info for bangrak

Morning, According to Trading Economics global macro models and analysts, Rhodium is expected to trade at $7747.39 by the end of this quarter and they estimate it to trade at $6655.29 in 12 months' time. Palladium $1827 & looking forward, they estimate it to trade at $1585.49 in 12 months'. Platinum $790 & estimate it to trade at $709 12 months.

Assuming this is correct as things change, the basket price will be $1980oz compared to the basket price today of $2133oz but still giving a net profit of £43.1m & EPS 15.8p so 80p+ without any cash included or possible $40m proceeds from any sale of assets. Liberium in their note gave an estimated basket price of $1832oz and as a result a 80-100p target, im less greedy im in for 80p and 100%. This is on a reduced 60k oz production so possibly more than this if back to 70k+. Not many like this about now.

I'm assuming they will wait until the seller is clear before deciding what to do about Volspruit, looking at the Liberium note from February it says if prices stabilize (they have) then it would be pretty easy to sell this asset to a number of interested parties generating a possible $40-50m cash after about 6 months. It also states the market probably didn't give SLP it's full rating as it was concerned about a fall in Rhodium prices again but this has not really happened despite CV19.

Reading some posts below there does seem to be considerable focus on Platinum and in a previous post, i said that I too was a Platinum focused observer until I was aware of the prill split and Rhodium prices, i wonder how many are like this?. The dip on the 24th in Platinum & Palladium could explain the dip in SLP being linked to some standard PGM metals trading algorithm, but surely the masses are not calculating value here on half of the production and ignoring the Rhodium?

68000oz at $800oz would give you 39p using a PE of 6, 68000oz at $2050 is where we really are and that is 80p+ area if you assume 60% deductions and 272m shares. If this was selling oil or gold it would be a £300-350m cap with its profits.

Why 38p other than a 50% fib retrace and 25% fallback from the top?........The prill split is Platinum 62%, Palladium 25%, Rhodium 13%. Therefore for each PGM oz that is sold $1073 is Rhodium $478 is palladium and $499 Platinum, each oz gives $2050 and this is a current price. Half the income now comes from Rhodium, if you take out all the rhodium production and apply a PE of 5 to Plat & Pall the SP should be 39p and its 38p. If you apply the platinum price only to the entire production you get the same 38p....Surely everyone knows the prill split here and this isn't just some manufactured retrace? 82p on a PE of 5.

https://www.metalsdaily.com/live-prices/pgms/

yes correct 709m ZAR + $6m = $45.3m at results day and $47.58m today gain $2.2m.

Current prices...Rhodium $8250, Palladium $1893 Platinum $808. Basket price $2046 oz. 68000 oz minus about 60% for the usual expenses gives $55m or £44m profit or EPS of 16p, $40m in cash and as highlighted below FX is now higher than results as we have $2.2m more. Added a few more

Spot price now $2013, production 68k oz, expenses/taxes are around 60%, which means this is making about £43m profit using today's fx rates. EPS 16p so at 40p there is 100% here IMHO on a 5 PE and the analysts/brokers think the same. A total 50% collapse in PGM prices to Rhodium $4000 Plat $400 Pallad $900 gives this a value of 40p without any cash consideration. The margin of safety is huge.

I have 927k shares now so if your big one is of similar size then feel free to get on with it :), trading the trend folk have been shaken out at 40-41p so i doubled my holding last 2 days, it worked on RRE 18 month ago and it will work here.

Platinum $796 62%
Palladium $1862 25%
Rhodium $8100 13%
Basket price $2012 oz, production 68000 oz = $135m revenue - $81m expenses = $54m net profit or £44m.

EPS 16p on 272m shares
Current PE 2.75

25% palladium i mean

I've followed SLP for many years but the mistake I made was focusing too much on the name, it took an article by jack to alert me to the prill split being 13% for Rhodium and 62% for Palladium to ease my Platinum focus. I also placed too much emphasis on catalytic converters and their demise until an IEA article about Africa's huge energy growth and future car demand made me realize that converters will be needed in greater quantities as fleets become more economical. I keep a detailed sheet now that I alter daily using info taken from metals daily, Liberiums broker notes and company RNS's which has constantly given me an EPS of between 14-17p (currently 17p) since March, in-fact, the revenue generated from Rhodium alone according to my calculations is worth about $31m/£24m pa net, and this gives me an EPS pf 9p. I hold 441k shares, i think it's one of the best out there, i hold 441k shares or 30% of my post CV19 damaged portfolio. 85p on a PE of 5 isn't being greedy.

Liquidity is poor here. I think SLP & JLP are better places to put the money at this stage, but i wouldn't rule this one out at a later date, just not grabbing me now.

https://www.metalsdaily.com/live-prices/pgms/ is what i use. Basket price is currently $1850 oz giving me an EPS of 14.8p so I'm sticking with 100% from here excluding any cash and will add a touch lower than where we are now. Cash has gone down 2.7% in FX rates since the results which isnt really a lot. The company looks great charts look great.

68k oz with a basket price near $2000, should give revenue of $135m with a net of $54m so i have EPS based on the reduced shares of 19.8c or 16p so 80p is comfortable and the cash adds 13p. Broker had Platinum 850, Palladium 1897, Rhodium 6399, and gave the target price as over 100p. The potential 11p dividend attracted me also.

With so many businesses struggling its refreshing to see one that is progressing towards its true value, few companies have a 50 day trading above the 200, in-fact, I see few trading above their 50 day. Cash is 13p a share, still feel this is 100p+ on the current figures, 5% drop already in the FX rate on the rand but basket spot price still $1995 today. Exceptional business..

Finance costs in 2019 $21m 2020 $35m difference $14m, Surety bond is for $208m giving a rate of about 6% it seems. This bond is just to ensure that RRE meets its liabilities for decommissioning. Current net cash plus the bond is about the total net of tax for the decommissioning liability as detailed in the CPR.

Page 9 Whitman Howard report 22.7.19 UK only Decommissioning liabilities

Gross DCE Pre tax 3154.3m
Net DCE Pre tax relief 927.7m
Net post tax relief 456.9m

Exactly how is RRE going to get its costs down to $18 pb when it was $22 then went up to $29 (opex alone), Endless ramping needs to be balanced with some facts, Iraq E&P's have opex of $3 but need $30+ oil to be profitable. I'm not getting the $18pb at all , this need $53+.

Revenue $250m. Net profit $84m (33% margin). Earnings per share 654c (£5.33 so x 5 = 2600p value) Oil sold for $63pb Gas sold for $27pb. Split was approx 50/50. Opex Oil was $44pb. Opex gas was $12pb Ave op ex was $29.
Production was 5.068m boe (13886 x365) Revenue / Production gives $49.52 price inc other income.

2020
Op ex $29 pb. cap ex to be $120m not $200m so $16.44pb on 20k pd
AB ex to be $25m not $30m so $3.42pb on 20k
G&A expenses (whitman howard estimates) $35m so $4.79pb
Finance costs (whitman howard) $33m so $4.52pb
Total $58 pb inc cap ex minus cap ex $41 pb
Considering the split you would want oil to be near $52

WAS making a profit, i'm not sure myself if they are making any profit under $52 oil when you consider their oil last year was sold at $63 but the revenue they got due to the gas oil split was $49pb. When capex is $29 and abex is $1.11 plus G&A at $4.79 plus finance costs their true BE is $41 so they need oil to be around $52 so im just not getting the excitement anymore until oil is much higher. 580p is net cash prediction in 12 months if oil stays $40.

Needs about $43 oil to cover Opex G&A & DDA and a £33m finance cost included by Whitman in their broker note months back. Will average oil stay lower than $43 for a year?. My model says $64+ was the sweet spot hence the hedge, below that the cash is used.