Member Info for Davde

Seems to be a precautionary financial measure, with a political twist! The promise of reinstatement of dividend asap maybe enough to support SP of SBGL and consequently LMI's! It is though a dilution of the LMI shareholders percentage of the SBGL entity (again?). It could be used as an argument by Ben to up the offer to compensate, all depends on what happens to SBGL SP!

Rastuss agree re wage negotiations, high probability of difficulties you are suggesting. SBGL will definitely have cash to pick up pieces but cannot see institutional shareholders happy with that, so low probability I would suggest and hope! I can see the advantage of seeing off Uncle Joe, he's doing that himself, the majority of his members want to work, not strike for political reasons, they want to earn for their families and communities. In the long term cooperation not conflict wins prizes!
Not wanting to predict re competition appeal already stuffed on saying not much would happen until after election!

Anyway bit of fun think there are now 6 scenarios for wjat happens in next year:-

SBGL takeover
LMI stand alone
White knight bid
Status quo (still waiting on deal!)
Business rescue
Reverse takeover

Any other options? Place your bets now!

I still reckon SBGL evens!

Its on the SBGL site. AMCU appealing ruling, no doubt on date! Looks like some AMCU membership drifted to other unions as count in Feb! Also SBGL reduced peace and stability payment to zero Jabba playing hard ball. Uncle Joe's reaction on Friday will be interesting. Was not expecting news so soon! Another good day though.

In 2018 LMI averaged 890$/oz so recent price increase is welcome. The PD price for first half well up which is likely to have been beneficial as well for LMI but the COP is not looking good! First half figures will reveal all. If PT continues to rise on a sustained benefit then yes LMI could stand alone but we are not there yet in my view! The institutional shareholders will be watching and should they agree that in the longer term LMI would be better off standing alone, they will pressurise board to seek a better deal or withdraw. 100 you maybe be ahead of the curve in terms of their thinking time will tell. In the interim hopefully a good week ahead for all.

Rastuss I have no doubt date will be extended, the logic of the deal is compelling for both SBGL and LMI. That said agree next financial/production updates from both will be interesting, cannot see LMI being cash starved but burn rate may become more apparent!
Re legals, not sure myself but we will find out soon enough or not! Lawyers in SA must be a lucrative business maybe should invest there instead of mining!

Rastuss agree re treading carefully which is why I am not expecting ruling re verification and takeover before election day! When verification exercise completed and is in SBGL favour suspect there wil be another peace and stability payment offer marginally better than last, if refused again workers will be dismissed if they refuse to return to work which will be perfectly legal as strike will be unprotected by that time. Doing anything before will provide additional support for EFF as this strike is political and Uncle Joe wants confrontation. I watched EFF leader getting ejected from parliment it was a hoot! These people are extremists and hopefully will not gain to much ground in election but we will see. Cyril does need to speed up progress in making lives better for black south africans otherwise the next election after this one could be the last one for many years as South Africa descends into turmoil unfortunately!

Doubt much will happen until election over! No point in giving Uncle Joe any oxygen in the interim and striking membership maybe waivering anyway!

Agree but we need another bidder, until that happens Jabba has a cheap option to buy LMI and unlikely to raise offer!

LMI have struggled in last few years mainly due to low PT price and high and rising COP. If the PT price rises sustainably to say 1100 plus and this is possible in my view as firmly believe fuel cell usage will significantly boost demand in coming years and if this is start good. Whilst not trying to defend management you have to be fair, they have been working in a very hostile environment in last few years with low PT price. To survive LMI needs significant investment to reduce COP in order to survive long term, so any bidder would need to take that into account, that and LMI "hidden debt" maybe somewhat off putting. SBGL has a significant advantage over other bidders due to co location of LMI/SBGL operations this allows it synergies and low investment costs to reduce COP. Although worryingly Jabba had been saying recently that SA is becoming uninvestable in! This does not bode well for takeover but suspect he is trying to influence Govt to make changes to costs e.g. tax, royalties etc. Still think SBGL takeover best at present and think markets will be positive on deal completing so SBGL may rise enough to give LMI shareholders £1.20 or more when deal completes. Or as I have mused before maybe Ben should adk Jabba if he is seriously contemplating leaving SA that LMI takes over SBGL platinum! I would vote for that.

If AMCU strikes at LMI the risk of going into business rescue will be high. This could allow Jabba to pick up LMI for a song and potentially sort Uncle Joe at same time. SBGL may not be as cash strapped at that time you never know next set of SBGL will determine cash position ! Business rescue may bring in other bidders as well as they could start with clean sheet. This scenario is not good for existing shareholders though. It also depends on buying out streaming deal as they have rights over assets under deal. SBGL deal still best for LMI in my view but there is still some way to go!

Sure SBGL can waive conditions if they wish, so do not think High Court ruling necessary and suspension risk low in my view.

BREXIT far more dramatic and worrying but have common traits!

Jabba knows he needs to develop have good relationships with unions to drive business forward. The relationship should be one of co-operation, providing mutual benefits for all stakeholders, so cannot see Jabba playing dirty he needs politicians and they need investment in mining to maximise the extensive mineral resources in South Africa. Uncle Joe maybe on the ropes in round 1 but sure in round 2 he will come out fighting!

Uncle Joe is going for political martyrdom! Think strike still protected until verification process completed, not heard how this has progressed? SBGL will do nothing to inflame the situation until after election I suspect. Hopefully court will reject AMCU appeal against takeover quickly we will see. Cannot see NW court suspending licence but again we need to wait and see but think LMI's revised SLP will sort that out as the issue will be mitigated!

LMI have "borrowed" $243m (streaming deal and BTT project) they have sold assets for circa $30m they have warned that next quarter figures likely to be poor like Q1 this means they are probably marginally profitable at best. Whilst not disagreeing that the PD price and weak rand have helped otherwise they would be in deep trouble. Agree bid is a steal for SBGL but its the only deal on offer for stakeholders to ensure future investment and to protect jobs. The alternative is not good longer term unless the PT price increases significantly on a sustainable basis otherwise LMI will stagger into business rescue along with other high cost producers. On that basis I think most institutional investors will vote for deal as less risky albeit not without risk as SBGL has issues as pointed out by other posters. The next SBGL update may swing these holders one way or another as sure they will be reviewing position as you guys are.

Whilst weak rand and higher PGM basket price wil benefit LMI profitability the costs assocaited with streaming deal and BTT financing deal will impact profits! The latest round of wage negotiations are starting shortly which hopfully will result in modest pay but suspect not as Uncle Joe will try and extract all he can, do not think they will strike as elections should be done and dusted and he may not have as solid support as he thinks. Strike would also be very bad for LMI but you never know! How profitable LMI is still depends on reducing COP not just containing costs as they are a high cost producer compared to many peers! The SBGL results will be also be very interesting in determining the final LMI deal value assuming deal goes ahead.

Rastuss look at mining weekly article it has a slightly different take!

0.967 SBGL share for every One LMI share.

Rastuss my reading the verification process needs to be completed yet and then confirmed by labour court that strike not protected(SBGL fairly confident!). SBGL have rejected AMCU additional to CMMA proposal (which SBGL had not agreed anyway!) so think strike still on! Jabba playing hard ball ny the looks of it!

Not sure how you can deramp a share that's value is linked to another, in this case SBGL! It is very unlikey that LMI will hit a pound unless SBGL hits R2000 plus which I might add is possible in next week or so give PD still hitting highs and Stillwater must be making a mint given its PGM mix and favourable COP. The only other way is for the deal to be called off and market agrees LMI can stand alone which it may do given high PGM BP and weak rand!

Not sure I fully understand the proposed deal, is the R5700 back pay a peace and stability payment, spread over 2 years, if so its only an additional R1,200 above previously offered, rest seems to be same. If so thats good, but we will see what SBGL says, as suspect there could be a misinterpretation from AMCU we will see as I am probably misunderstanding!

100notout the points you raise are all valid, where we differ is our views on how LMI can survive long term without reliance on high BP and weak currency, that requires a reduction in COP! That can only be achieved by some form of cooperation with SBGL's PGM mines is my view, rightly or wrongly, time will tell! In the mean time SBGL ticking up nicely!