Summary11 Jun 2015 10:51
My assessment -
- Platinum currently ~$1136/oz and appears to have bottomed vs production costs of $800/oz & shareprice was between 16-20p when platinum at $1213/oz (8% drop in income vs 45% drop in share price)
- ZAR/USD was 10:1 when between 16-20p now ~12:1 (~20% improvement in income)
- Price/ Book of .53 = a valuation of 17p a share,
- Positive sale of mining assets generating 450M (ZAR)
- Cash flow positive $141M (USD) (undervalued company)
- price appeared to double bottomed & then found support (for now)
- AQP 'appears' to still be the 5th largest platinum producer globally even though suffering a reduced last quarter (market share)
- Vehicle manufacturing numbers have increased again despite reduced global growth, personal spend per capita is increasing (demand),
- China recently reduced interest rates again to spur growth whilst shutting down local metal refineries due to pollution levels (demand)
Zimbabwe Mimosa mine
- 50% owned with Implats who, separately are refurbishing a refinement site to comply & remove the 15% local raw material tax implications - theory being Mimosa (& AQP) will be able to use this site in the future and so not have the 15% tax implication also.
- 15% tax is not being applied as all Zim platinum miners had ceased raw material export (since Jan). Since the decision to suspend the tax in late May, AQP & all Zim producers will be shifting in-bulk raw material onto the market hence any drops in price may be attributed to this event.
- Implats do not wish to invest in expanding Mimosa whereas AQP does (risk to expansion unless AQP goes it alone in Zim)
I'd suggest AQP is a take-over target (challenge being the ~24% local ownership which triggers duplicate payment from a foreign perspective) or given the cash levels to either share buyback, wait and hold as commodities are still depressed or acquire additional licenses and diversify into other commodities.
anyone have more Information on the debt or remaining bond to be paid later this yr; I understand the bond was mostly repaid thru the dilution of shares in early 2014 when the sp was around 20p..
Immediate negatives being the 1.5BILLION shares out there making over supply & share price growth difficult, Zimbabwe pushing for a 51% local ownership stake, Bond repayment later this year.
Late June production report, Late July End of Financial year report..
Anything else out there to add or amend to my thoughts?