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That is such old news on Audley and from recollection, it preceded the Ironvelt transaction. This has been unlucky in that when everyone else was in recovery, Miton sold out: there is no other fundamental reason why this should not have climbed out of the trough along with the rest. We simply need Alma to get out there and spread the good news: currently, sentiment is poor and that is what has to be addressed. I don't think that SA politics plays any part in the platinum space, given that all the major producers are situated there: does it affect LMI? As for going private, I cannot see why project echo was announced to the market: surely such a plan would have been kept under wraps until the deed was done, if a transfer at an undervalue was to be the name of the game? It will be interesting to see if the AGM is used as a platform.

Well, their results out today. A tongue in cheek comparison of the 2016 LMI and SLP results in $s. Operating profit: LMI $7m (excluding "special losses") to SLP $6m Profit before taxation: LMI $(3)m loss to SLP $6m profit Net profit (loss): LMI(112) loss to SLP $4m profit And the respective market capitalizations? Should we laugh or cry? I might accept the discrepancy if LMI was a start up with a great future, but it is the opposite, a dying giant with increasingly unprofitable assets at these levels of POP. Before anyone says that the LMI story is two tales in one year (a disastrous first Q and a much better rest of the year) , SLP was also a tale of two halves, profitable in the first half, but with double the success in the second half. Management need to show confidence in the ongoing operation and either announce an acquisition or a dividend policy. Perhaps the AGM will be the place to clarify their intentions?

Wow. Just bought out the loss making JV from Anglo. Do they understand " when in a hole, stop digging?" Anglo obviously have the right strategy: reduced oz. higher margin. All I can think is that LMI are going to cut other even greater loss making oz. and that this is a shakeup to overall reduce oz. with everyone benefiting. There is a comment on our accounts somewhere to the effect that it is for the big South African producers to come to their senses and it might be that it is easier for LMI to deliver the blow to employment, than Anglo? Obviously, that is based on the understanding that the miners have been quite militant, largely preventing cost cutting on labor (either hourly rate or productivity).

Well, glued to my ATYM (copper) shares as they rise from the ashes, I seem to have missed the fun here. So, copper is just showing how badly wrong the market can be and what happens when it has to right the ship. That applies even more so to the platinum market: at this POP, the mined supply will be largely loss making and that is totally unsustainable. The rewards for those who survive, such as SLP, will be substantial.

Definitely a buy and from the previous day, 7th November

The latest industry figures (Q2 world platinum investment council) show the following 2013 3015 2014 3140 2015 3250 2016 for the first 2 Qs = 1665 so doubled, that would be 3330 for 2016. Those figures, right up to Q2, support the car ownership growth point of view.

It is not really about demand. Supply is the key and any detailed analysis of the majors producing platinum leads speedily to the conclusion that producers cannot carry on indefinitely at a loss. Unless a significant quarterly decrease in demand occurs, annual deficits eventually erode above ground stocks: that has been the position for the last 3 reported years, 2013 to 2015 inclusive. Beyond the 10 year horizon, IC are probably right, but that simply acts as a deterrent to new investment. Large long life projects such as Tjarte will never happen and the name of the game will be sweating existing assets/stocks, as SLP, LMI and JLP's projected tailings operations. Anglo are one of the few mine operators sitting pretty with the low cost Northern Limb Mogalakwena contributing the majority of their operating contribution. Most of the rest of their mines are marginal and from recollection, I think that they are trying to dump the Rustenburg chunk (25% of the production contributing virtually nothing).

Wuffle, The project echo 12m is the capex for the next 3 years. The capex is "tax planning" : the presence of the deferred tax account suggests up front capital allowances (ie offset against income before tax). In addition to the cash balance of $11.1 SLP has other working capital of $14m, so the ongoing business is pretty well priced at zero. Meanwhile, Mr. Market allocates capital to every dog and his doings: it is the consequence of market participants having less and less understanding of fundamentals.

Part of the equation, of course, is convincing existing holders to remain and that is what underpins the "higher lows". That distressed seller back in spring/summer, abandoning rational action, obviously produced chaos and temporarily destabilized the base: the surprise is that the market managed to absorb the Miton 10% without more damage. It is interesting to note in the accounts that management specifically address the issue of our major shareholders and have included this note. SHAREHOLDER RELATIONS Management and the Chairman meet regularly with major shareholders to develop a balanced understanding of the issues and concerns of shareholders. The Chairman ensures that the views of shareholders are communicated to the Board as a whole. Given that it is their specialist subject from which they make their money, it would be fascinating to hear what Audley have to say about the current disconnect between market cap and value (net current assets circa $25m + value of a business with an ongoing EBIDTA circa $20m + the various other assets).

Apart from 1 decent trade yesterday, it mostly looked like the normal 10% ers. The big question is what is being done to get the news into the market, now that such spectacular figures are in the public domain. Will Alma make a difference or is it all down to some bird on twitter to get tweeting again?

Well, that was the inevitable consequence of the recent dump: less than 2 weeks ago, rafts of shares at sub 8p (kind courtesy of someone who did not think that we would be adding to our cash pile) and so what a temptation for traders to crystallize a quick 15/20%. If things do not change PDQ, it is inevitable that it will be bought out: the proposition is simply too good to stay under the radar. Once again, the question, why would LMI spend 50m to set up a tailings operation, when the actual business here is going virtually for free, once the net current assets are taken into account?

Great posts as usual, TS. All I would add is that at £21m working capital (of which £9m is in cash) it values a business capable of producing $22m EBITDA (extrapolating the $5.5m for the Q) at virtually zero: existing, easily convertible to cash, current assets account for the majority of the market cap. Pedro's earlier post flagged up the most significant factor in the repeatability of this performance: recovery efficiencies. Stunning results that seem to have duly stunned the market: simply too good to be true!

A few thoughts for those making the comparison Market cap in £s: SLP 23m and JLP £37m. Working capital SLP per 2015 year end accounts. Current assets $25.8 less current liabilities $6.3 = £19.5m JLP per finance RNS borrowing $5m so asset and liability cancel to zero. Additionally JLP borrowing $10m to fund and SLP debt free. So the "gap" excluding fixed assets is nigh on a cool $30m. Looking at the ongoing dump operations, it is highly unlikely that JLP will match SLP's profitability any time soon: SLP is an established 60k oz pa operation v JLP projected variously at 33k oz and other figures in the 40ks (the 33k is from the financing RNS dated 22nd March 2016) JLP's 1st dump is a toll operation and that seriously adds to costs. JPL's 2nd operation is still in build, with a 6 month commissioning period to follow (for which the additional $5m working capital is required, as mentioned above). So, a smaller operation, with all the risk of build and debt and similar admin overheads. That leaves Tjarte, a huge reserve at the wrong address: the type of deposit that everyone else is closing or passing on and that cannot hope to compete with either Northern Limb mines such as Anglo's Mogalakwena, or the resurgent tailings industry pursued by such as SLP, JLP and LMI or, of course the by product/recycled component of the supply chain. What does the market see, which I do not or is it simply that SLP is wickedly undervalued?

Well, expectations on the headline numbers, profit and cash, are high here, but there does not seem to be much evidence yet of activity by Alma on the PR front. Regardless of how good the proposition is, a busy market place needs to be informed as to progress. It will be interesting to see if the twitter crowd, who visited in September, appreciated the company and are monitoring this next event, the first Q. There does seem to be this fixation on cash, so that will be almost as important as overall company performance.

SLP provides the explanation for the movement in the group's cash balance in the quarterly accounts. If there is no large cash build, it will be because management are implementing "project echo" sooner rather than later and as that delivers further cost savings per oz. earlier, surely no-one would question the wisdom of that? My understanding was that it was not happening immediately, as it is partly based on "doubling up" re-using redundant plant and that said plant is still in use, but I did only skim read the presentation and someone might want to put me right on that. So my expectation is that there will be a large cash build, given the size of debtors on the June balance sheet ($16m) which should yield far more than the $3.6 generated last quarter, before the one offs such as the pipeline finance and annual tax.

It could just as easily be Miton or a PI. Current exchange rates might well promote a sterling purchase ex LSE for a dollar resale and why would AAC and M & G not see that as an opportunity alongside management? Taken alongside the strong fundamentals here, pound weakness makes this an obvious target.

mytrader Share purchases this Q (by my calculations) have been 4.135 million at a total cost of £341,556, which is quite different from your figure of $2.5m. As such, the cost will scarcely make any dent at all in the anticipated closing Q1 cash balance. My expectation is that the Q1 cash balance plus debtors will not fall that far short of the current market cap: as we are debt free (and current liabilities in the context of the business are not significant), effectively the 10 year dump operation is also being valued at zero (along with the other assets). I do agree with you entirely, that SLP will have been more than disappointed with the way the market took the last Q: even worse, has been the response to Project Echo, the 10 year plans and further cost reductions. Why Lonmin would chuck $50m at a tailings facility, when they could have this already up and running for less, beggars belief.

There is a bigger question. Platinum is a niche market in respect of uses and producers, currently in slight annual deficit and that being satisfied by diminishing investment holdings (and the current price will undoubtedly escalate liquidation of those stocks) The 3 main producers cannot increase ozs without depressing prices, so currently, all are focused on cost cutting and conserving cash (particularly closing less economic mines/shafts and limiting investment). Will they actively go the cartel route and cut back production to all get back into profit per oz, or passively get to the same place in due course through cutting unprofitable production or are we now to see the strongest wipe out the weakest, by aggressive over-production? That latter looks least likely, but not impossible. For that reason, keeping a reasonable war chest in cash in the short term is probably wise, until we see if this recent drop is caused by market madness or by fundamentals not yet in the public domain. In the longer term, of course, as our costs are at the lowest end of the production scale, we should do well, whichever strategy plays out. Meanwhile, is that new PR company getting the good news message out to the market place in anticipation of the Q1 results?

Orbiter Fully agree with that "alternative view" LTHs by definition, are not part of "the market" which is where price is determined. Traders, TA driven, who do not have time to research the fundamentals, are the market. It seems logical therefore, that there is no correlation between understanding fundamentals and success, as determined by share price. This means of price determination has most unfortunate consequences, when a crystallizing event takes place, such as the recent EMED placement. What does the latest Edison report, done at copper lows, together with the down grade by our own broker/nomad Cannacord, also at copper lows, say about the EMED PR strategy in the face of market activity?

Orbiter "it's because one side of me is tempted to jump back in, but the other side can see the same pattern of history still repeating itself here...but, more dilution, change of directors, more debt, more borrowing, more dilution more averaging down seems to be par for the course". The one thing that will not happen here is a repeat of history: in the last 12 months a metamorphosis has taken place. We may see problems, but they will those associated with the new state of the company, a producer (such as the real impact of metal prices hitting the bottom line, labor strikes etc.). It is laziness to use outdated arguments to either ramp or deramp and "more dilution" and "more debt" are a poor attempt, when the company has such a strong balance sheet currently and NO debt!.