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Excellent post Visitor, your numbers there are spot on and very close to what I get. The valuation here is ridiculous and it would look more so if the PGM basket and chrome prices stay where they are now at the time of the next production update in July. And add $43m of inventories to the net trade receivables. We get to $148m of current assets soon to be realised into cash, that's almost 26% of the market cap.
so SLP's market cap now exceeds THS (at the moment atleast). This is a crazy buy signal for THS and I have taken this opportunity to add more.
The narrowing gap between SLP and THS market caps makes me chuckle. I have sold all SLP and bought THS for good reason. SLP LOM is 8 years compared to 14 years open pit +40 years underground for THS. SLP has higher net cash by c$57m as at 31 March 2021 but not investing for growth atm and with no clear direction to what they are going to go with that money. Whereas THS is spending c$50m this year to increase their chrome capacity. It already produces 1.6 times the PGM compared to SLP, has a higher Rhodium split and will go on to produce PGMoz in the next 18 months. THS is more diversified than SLP. Since both of them operate in the same jurisdiction, THS atm is a much better investment than SLP, all imo.
Excellent post Visitor. You are spot on with your numbers. I am interested in seeing what the net trade receivables look like. The fact that the interim dividend may be more than all of last years is just a strong enough reason to buy these shares at the current price. Incredible!
TBTT, I think you are right. Worth noting that the $50m Vulcan cost will be capitalised (and amortised over its useful life) so this won't be a full P&L expense. The finance costs will be significantly lower from last year due to lower debt level. Its all looking rather good atm
Whilst we are at this subject, the 15% refining costs (are these deducted from revenue or added to the AISC?)
Is the Chrome price still $180/t? Has anyone got visibility over the current prices?
Visitor, I totally agree with you 100%. My entry in SLP wasn't as timely as yours ( I first bought at 34p) but I still had a good run like many of us here. I sold out of SLP completely yesterday and invested all proceeds to add more THS. I couldn't agree more on THS's growth prospects vs the lack of them for SLP. Whilst I still think SLP is still undervalued on any metric, THS is significantly more undervalued based on its current production and growth prospects. I am not concerned about THS's net cash position vs SLP as THS are investing for growth whereas SLP isn't atm. If Rhodium prices stay anywhere above $20k, expect THS to be c250p by year end.
SLP's market cap is now equal to THS's market cap. No disrespect to SLP as the recent increase in sp is well deserved but THS should be valued at least 1.6 times SLP. Sold more SLP to buy more THS yesterday.
Rhodium is at $26,300 now. There is no stopping this. Tharisa remains significantly undervalued and I am still buying whatever I can.
Honestly, only based on PGM production this should be 1.6 times SLP and i haven't even counted the material Chrome production. In addition, THS has a much bigger mine life. No disrespect to SLP ( i still hold some), but THS is significantly more undervalued than any other miner i know.
Platinum now over $1,300. Rhodium stable at $21,900. This valuation just doesn't make any sense. I can't stop myself from buying more and more of these. This should be 200p by May.
Thanks TBTT, that is very helpful. I totally missed that and couldn't find it when I looked again as well. In a net cash position already, that is excellent. The basket price now is fast approaching $3,400, double of last year's average. I can't find a better company to invest in atm.
Did the Q1 Production report include the net debt figures? Have I totally missed that?
Thanks Visitor, yes I am in HUM but no one by myself to blame for that. I still think its valuation is absurd but they just fail to deliver every time.
I am very excited about the interims for THS. Its all going in the positive direction for THS atm except for the sp, but I can wait and happy to add at these prices as and when I have some spare cash from selling another holding. Thanks for all your help .
Thanks ragnarlothbrok, tbh i was heavily invested in SLP for most of last year until 2 weeks ago when i took some profits when the sp reached the 115p mark. I was totally unaware of THS throughout this time which i am absolutely gutted about. I only came across this share through the SLP LSE board and just can't my head around the valuation. I sold most of my SLP shares to invest in THS because there is no doubt in my head that this should be valued at least 1.7 times SLP's market cap, which to me is a minimum 40% upside from here at current prices and c100% if SLP is to reach ST's target of 145p. Thanks to people like you, Visitor and TBTT for their comprehensive notes on this board as well as SLP, they have helped keep me invested even in times like the March 20 free fall.
SLP had >250 trades today compared to 15 for THS ( 2 of which were my buys). Just goes on to show how under the radar this share is. I remember SLP was in a similar stage before but has got more coverage because of Simon Thompson covering in the IC. Rhodium is at $21,800 again today. Just fail to understand how people don't see value here just yet.