Member Info for Davde

Good to see gold strike finally over. Not a lot of change to peace and stability offer. Hopefullly they will be able to ramp up production asap and Q2 update verifies this. If update good SBGL shares should fly and consequently LMI. Wonder if this will impact on PGM wage talks? or will it be round 2! I wonder what caused Uncle Joe to agree this, not like him, waivering membership support, deal re jobs, single union agreement? Good news though.

Certainly would be odd we will know soon enough!

Joint statement something up end of strike!

Dry stane dykes are walls in Scotland, no cement used, stones from locality, used to seperate field's! A highly skilled job by all accounts. You don't have to slip into a drainage ditch in Scotland to be cold and wet its normal weather! Sun shining today at last, might even get heating off soon! Yes looking forward to Q2 figures from both think it will shed light on a few things, state of LMI in particular as update was not good!

It's a Scottish saying, not sure science behind it but assume because dry stone dykes are uneven in construction so when the sun shines the stone heats up and the snow falls of quickly! We will find out soon enough re Q2 SBGL figures which will be dragged down by gold, but expect Stillwater to be very positive unless 100notout correct and something up at Stillwater! Even at a PD price suggested Stillwater EBITDA circa $400m for year. Probably wrong again but think Stillwater a very good investment with low COP it will be hard not to make a lot, if only LMI had such figures!

The Q2 figures should make interesting reading. If PD price keeps holding up the EBITDA for year would increase by circa $180m to circa $0.5bn all things being equal. Impressive stuff for SBGL that and additional production coming on line in next few years could mean SBGL sitting pretty. If they get gold sorted debt mountain will disappear like snow off a dyke! Good spot Rastuss.

Rastuss you are correct re earning schoolboy error on my part(worryingly). My point was to illustrate valuations can change as has Lonmins, the bid is undervalued given the resources they have available, but it does reflect low PT price, high COP and investment required. Still a bargain! I know PT will rise don't know when though that's the problem! The recent uptick could be the start of the rally or just another false dawn! Some hard data about uptake of fuel cell production will be the start.

If the PT price was $1,500oz plus now and COP $650 then with $1bn plus profit a $10bn offer would equate to a PE valauation of 10 not unreasonable so agree LMI made a mistake not accepting bid. They got greedy at a time when PT price strong. Now with PT at $900oz and COP similar level LMI PT production is marginal profit wise, its only the PD and RH prices making it profitable in 2018. If you use a similar PE ratio to value then $0.8bn valuation not be unreasonable. So agree current bid value cheap for SBGL however no other interest in LMI yet and unless PT price increases which hopefully it will, then standing alone for more than a couple of years at current prices could be hard! LMI does not have a lot of choice they must pursue takeover and sure most shareholders will agree, but you never know!

Rastuss never thought it was. You are right re Anglo they are in a win win situation. To me the merging of the SBGL/LMI PGM assets are a logical way of reducing COP in both companies, no matter how it happens, at the very least they need to cooperate on a commercial basis. My understanding of the geographical co location makes it a no brainer, I could be wrong! Whilst not disagreeing Jabba's position maybe at risk, his strategy is sound for a mining company to survive long term, that needs a good range of product that is geographically diversified. Jabba and Uncle Joe maybe casualties in battle but strategy to win war remains the same!

Rastuss for me investing in LMI is a calculated risk, its all about takeover happening and Jabba's strategy working. PT strike a big risk but have a feeling wage discussions may not be as bad as feared. The CEO of Anglo seems think wage negotiations will be successful he said in mining weekly 12/4 which is a different tone from Jabba. We will see who is right but suspect moves are afoot to neutralise any strike threat
What that is I have no idea but think Cyril may have a plan worked out for after election, as he needs to create a better industrial relations enviroment to encourage investment, but time will tell! I maybe being over optimistic again!

Good show another potential obstacle removed although risk was low on this one!

Demand will outstrip techological innovation in PT usage in medium term so all good on that front in my view.
LMI held up well this week looking forward to next week mcertainly sure to surprise, its why I love LMI!

The WPIC have been talking up fuel cell usage for a while. This however is relatively small beer even if grossed up worldwide, we would be talking 5+ years before PT demand would outstrip current production! On the plus side China usually exceeds production targets in faster times when they set policies. Also think demand will be greater in commercial vehicles than anticipated, for high mileage users the additional costs are unlikely to be significantly higher over a vehicle life and being enviromentally aware will win business. The risk of substitution is there, but we are talking long term from what I can gather as they are mostly in research stage. Some of the stakeholders in both SBGL and LMI are there to get security of supply of PT for future usage. Absolutely convinced this will be a game changer for PT price, the question is when!

£2 only possible if the tides gone out and LMI wearing trunks, unlikely but you never know! (love that analogy)

Jabba definitely upto something the question is what? I don't buy the debt repayment or to deal with potential platinum negotiation/strike financial cost impact. He does not need to do first unless under pressure from institutions which is possible, why then tinker he could have done a full blown rights issue. The costs of strike are theoretical at present and agree could be problematic, yes could be prudent but significant wage rises across platinum sector will be devastating for profitability making much of it unsustainable long term apart from most efficient! Acquisitions unlikely but you never know! I think he will surprise again, Jabba and Uncle Joe well matched for coming up with new manoeuvres!

Rastuss SBGL may opt for a rights issue to clear their debt mountain but institutional shareholders need an incentive to participate, e.g. restoration of dividend but they already promised that. If you ignore current issues in gold,
the retrenchment plan will make gold profitable so the underlying position is very positive for SBGL, so why have a rights issue, Jabba needs to be careful not to alienate institutional shareholders. In my view any future rights issue would be to fund acquisitions as a serial empire builder! Still convinced this weeks placement is tactical rather than necessary to support business. I await to be proven wrong again! Uncle Joe will drag out strike as long as he can as it his modus operandi, once the election is over think he will be put back in his box. They could start by making it mandatory for unions to publish accounts showing details what membership fees are spent on and how much union leaders earn in wages and benefits! They seriously need to consider appointing employee directors as well to improve understanding of how companies work and getting them to accept responsibility for how well a company does. Rant about SA industrial relations over!
Re LMI share price the discount has narrowed (positive at one point) and is still well up this year even after last fews days so I for one remain positive but time will tell! Yes there are still significant risks to takeover but by no means dead in water yet!

Rastuss nice to be called optimistic been called a lot worse! Whilst I agree any long term strike at LMI would probably finish it off as an entity, the last one is why LMI is where it is now and low PGM prices! I do not believe that will happen. If it does I will sell my now modest investment as business rescue beckons. SBGL may as you have suggested pick up the pieces it wants, which is most of it and it will probably cost Jabba more than existing option as he will require to buy assets from streaming co which will not be cheap! He really wants smelter and the resources co-located. Uncle Joe is living in fantasy land if he thinks they will be nationalised Cyril will not allow it (if he has sense) as it sends out the wrong message re investment in SA. I am sure he (or his sidekicks) and Jabba have discussed this threat to securing investment and have a plan! I still remain optimistic that the takeover will happen although odds widening maybe 6/4 now!

LMI have been lucky in last year or so if PD price had not improved and the SBGL bid not occured 20p would be a good price but then again they would be bust! Its been a difficult day for LMI PI's so are a tadge fractious I know I am!

Rastuss I had not appreciated placement had taken place so stand corrected. To me the statement and the placement is tactical ahead of wage discussions, we have no funds for high wage increases and strike action will harm job security! Agree as ever LMI needs a good PGM Bp, so if it stays as is LMI will be fine short term although their COP remains a concern we will see what next update says, not expecting it to be good but we will know how bad it is! SBGL will be of interest as well in paricular their PGM side as think that doing well albeit with some production problems at Stillwater! What is becoming clear is that unless industrial relations improve in SA mining activities the sector will shrink rapidly in next year or so and nobody wants that.

SBGL fall over done to raise the 1.8bn rand they want the placing price needs to be 16.5 rand so would expect a recovery! LMI holding up well considering and some seem to see as buying opportunity given volume today!

Rastuss agree bearish, think it's meant to be, gold badly affected and potential PGM AMCU actions detrimental. Thats why political in my view, he laying out the backdrop to discussions both at LMI and SBGL! US PGM production down, not sales and guidance unchanged. We will know more at next update. Jabba will continually review the bid and agree he may decide on different route but suspect not, you never know though, still think business rescue option low probability, an outsider at 10/1 currently! LMI downside has increased but depends on how SBGL SP reacts in next week or so, amazing what a promise of Dividend can do to SP for institutional investors!