Member Info for Davde

LMI discount now over 15%, very odd indeed, SGBL up over 5% today! Hopefully pull back tomorrow but SP has been behaving strangely at end of day today and several days last week as well!

Rastuss apologies for not responding sooner, hopefully common sense will prevail and this issue will not be the cause of takeover not taking place but accept it is a risk .
Re SBGL and subsequent LMI price agree currently high correlation. SBGL price is more a consequence of confidence in strategic plan delivering, avoidance of rights issue and restoration of dividend.
The latest platinum council report does not bode well for any significant price increase in platinum price next year but did allude to potential platinum increase due to palladium substitution particularly in chinese car market in coming years, agree there are other substitutes but could explain chinese interest in securing supplies.

Rastuss thanks for this. Re tribunal will wait and see re appeals.
LMI have revised SLP proposed to deal with backlog in SLP which may satisfy plaintiff's in high court case so commitment there which SBGL will need to agree also I suspect should takeover happen. Cannot see how revised plan can happen without mining license so plaintiffs would be foolish not to agree to revised SLP! I could be getting confused again but seems no brainer to me!

Rastuss is the LMI case similar to the one over ruled i.e. SLP related? LMI seemed to indicate in results that SLP had been extended to 2020 to allow completion presumably subject to resources being available!
Re the completion date always thought it would slip when streaming deal announced but agree SBGL will not wait forever but potential K3 shows synergies available with takeover and protects jobs, tribunal satisfied? Agree interesting that SBGL not as enthusiastic as they could have been but LMI laying down marker re investment needs and suspect bit of company politics going on! Re power outages yes agree maybe disruptive but this is the current SA modernisation a slow and can be a difficult painful balancing act. Thoughts appreciated.

I for one appreciate Rastuss's views and info posted is helpful in undestanding risks associated with deal which are slowly being mitigated. The real issue is will LMI shareholders and stakeholders be rewarded when part of SBGL. A LMI shareholder class action is delusional in my view as cannot see basis for it but happy to be to be informed why it could happen and what outcome would be for shareholders!

On the face of it LMI position improved however without significant capital investment in coming years LMI will struggle to maintain profitability and need SBGL takeover for their operations to survive. LMI management are therefore correct in highlighting this risk. Whilst there are is still a risk takeover may not happen the alternative will be worse for local communities, stakeholders and shareholders so hopefully reason will prevail with the regulatory bodies who have not approved yet. GLA

Rastuss agree re script and there should have been an adjustment to the 0.967 to reflect issue but we are where are as do not think the deal made any provision for this issue arising. I could be wrong.

Lmi shareholders get 0.967 shares in SBGL for each Lmi share if I recall! To work out discount I take the SBGL price divide by current pound to rand rate and multiply by 0.967 to give what Lmi price should be. This may not be correct happy to be shot down in flames by other posters! Never seen Lmi at premium since bid announced!

I have always viewed the LMI discount v SBGL as the indicator of deal success or failure. It narrowed today deal success more likely. Re SBGL strategy agree element of cyclical Platinum is required however broadening the basket of metals production and reserves with improved geographical spread and ambitious cost reduction mitigates these risks. It is still a fairly risky strategy however rewards could be significant for all including miners in a well run company.
Anyone any idea value turnover/profit in Lmi associated with chrome?

Rastuss good summary of merger issues. Re SBGL this is a leap of faith which EXOR have by the looks of it. The question for me is do I have the same faith!

Rastuss appreciate posts this week, informative re going concern headwinds without a further significant increase in PGM pb. SBGL figures disappointing, any views on narrowing of discount on Lonmin price, merger more likely?

Rastuss the refinancing deal has enabled :
Lonmin to avoid any covenant issues (going concern) should deal be delayed beyond Feb.
SGBL will use any surplus cash from Lonmin to pare down their debt after deal completes says cynic in me or to meet Lonmins investment needs going forward.
Whilst the refinancing comes at a cost which may appear high it will enable investment program to happen quicker thereby increasing returns quicker that may or may not offset high refinancing cost that's the gamble.

Agree closure of capacity would limit supply and subsequently increase prices assuming other suppliers did not increase theirs to compensate. I do not think this will happen due to jobs issue. Another scenario is that poorly performing mines will be phased out over a number of years using contractor model to work these mines but under supervision of a company to ensure safety and environmental protections are met. No one wants a free for all I suspect but a managed closure program, just my view.

Fyi this is only my second ever bb post and I am invested in Lonmin, being my only miner object to make money eventually I hope.

I for one appreciate rastuss comments on this bb. It is always worthwhile being aware of the risks associated with the proposed deal. I do however think the deal will proceed as without it lonmin may not survive as a going concern unless pgm prices improve significantly in the very near future. Lonmin needs investment to modernise its operations and sgbl has more chance of providing than lonmin on its own. The government and miners have a vested interest in ensuring SA has a strong and viable industry in future years to underpin the economy hence they are both likely to accept the deal, albeit reluctantly and will negotiate caveats re working, social, safety and environmental protections which can only be achieved by having a profitable industry as the alternative will be worse. GLA