Member Info for ragnarlothbrok

I have some general questions....

Will dividend policy stay at minimum 15% NPAT in light of being debt free?
Is there potential for buying back shares given EV/EBITDA remains very low, cash is steadily building and capex requirements receding after this year?
There are appears to be significant movements in large shareholdings recently. Can you shed any light on recent uptick in volume in share trading?

hey tones, The SP is at a 3 year high and so is liquidity. Its a good chance for larger holders to take profits and probably rebalance. There is a lot of activity in the market now so who knows what's motivating them. Chasing tech or other more liquid base metal producers. Or maybe they know something. But the experience of Woodford and watching Majedie sell SLP in the 30s made me realise that funds aren't always the smart money. Its strange that a 10% rise in the basket doesn't seem to dissuade them...

I agree with your spring analogy. The spring is the multiple which is gradually being compressed as the basket rises and revenue expectations increase. Right now its gradually being compressed closer and closer to 1x EBITDA. If prices don't fall then that tension will build and build. It will just take a few to buy beyond the 3 year high to lead to a breakout into the blue sky. If the market was efficient then the share prices of PGM producers would track the basket more consistently. THS is particularly inefficient and its movements are dictated by the whims of shareholders and available liquidity with the occasional spring loaded period like November and December.

I'm looking forward to seeing that twinkle in Phoevos' eye, this evening

TBTT's favourite headline

BASF $22,950/oz
JMAT £22,900/oz

Working through that recent £800k order, may be more to come. THS range traded within a 10p band for 4 months last year

Working through that recent £800k order, may be more to come. THS range traded within a 10p band for 4 months last year

Thanks for sharing that CrudeTrader. EBITDA of $427m, fark me thats one bullish forecast. Thats the highest forecast I have seen so far. I'd be pleased if they hit that but I don't think they have taken enough off for the refiner costs. Take off $50m from PGM revenue. I've also been more conservative on trading income and much more conservative on costs (covid, labour agreement, ZAR appreciation) My current EBITDA forecast is around $350m for 2021 and $415m in 2020, reflecting the latest spot pricing deck

If you think this year is special next year will be phenomenal… Vision 2020 got lost in the Covid haze but the projects that underpinned that plan are still happening (just a little late):

- Vulcan, 360ktpa chrome at $4/tonne estimated operating cost, implies $50m incremental chrome revenue
- PGM expansion from pit redesign allowing access to more consistent, higher grade material and circuit upgrades to improve PGMs recoveries. That's an additional 30kozpa of production, incremental net revenue of $90m

Thats $140m odd revenue from volume growth, added on at very low cost, substantially improving AISC and margins. Whatever your EBITDA expectation for this year is I think you can add on $100min the next 1-2 years

Its worth going through some of the old presentations which are much better at selling the potential than the recent market focused ones

https://www.tharisa.com/pdf/investors/presentation/2019/Analyst-presentation-30-01-2019.pdf

It's a bit of a tome at 50 odd pages but very detailed and well worth a read. It's actually a fantastic report, even better than JMAT, and very bullish.

Thank you Mr David Davis!!

https://www.metalsdaily.com/files/Auctus-PGM-Jan2021-FA.pdf

Special resolution 1, wonder if they are considering buying back shares. I would support that

https://www.investegate.co.uk/tharisa-plc--ths-/rns/agm-statement--results-of-voting-and-dividend-rate/202102110700036508O/

I guess what he calls ring fencing he means that Egoli/Mintails will raise its own funds directly rather than being financed via an intercompany loan or equity from the PAF holding company. In the event of the project failing, creditors of Egoli or Mintails won't have recourse to PAFs other assets, such as Elikhulu. So debt holders will only have recourse to that particular project. It's normally associated more wth infrastructure financing.

It's a pretty intriguing situation PAF spinning the tailings pretreatment as an environmental solution. Cobus seems excited about expanding solar energy as well

https://www.youtube.com/watch?v=xRsRm_AXZwg&feature=youtu.be

Patience required TBTT. I've been buying. The closer we get to mid April, which should prove the cash generation, the more obvious that gap will become

MM64 I think you're right on the money there. I would add that now that the quarterly production includes net debt we'll get a look at that cash balance a little sooner than the interims

I have to say I was not expecting this kind of swift recovery in Pt

Ambitious...could be huge

https://www.miningmx.com/news/gold/45135-pan-african-will-aim-r2bn-to-r3bn-mintails-at-impact-investors-if-project-approved/

Hey TBTT, I'm also having a fresh look. A sub £100m 100oz+ plus producer. One where the SP is the same place it was over 2 years ago despite PoG being something like $300 higher. Not many of those about these days. Its surprising the CEO is still there after adding no value since completion of construction in a rising gold price environment. It will be very interesting to see bonus levels this year. They are all good questions. The ones about Betts in particular. He seems more suited as a NED than a CEO. I wonder how much time he spends in Mali. Reporting and investor relations seems woefully inadequate and sentiment feels shredded. It now feels almost like a turnaround play. A mining CEO (with African experience) would be a good start (T Bradbury would have been perfect)

Hi Visitor, the basket indeed is at a record high, a bit over $3,300 today and what's pleasing is that platinum is starting to make some meaningful movements, currently at what looks to be a 6 year high. I've been following the PGM markets for a good 4-5 years now and I don't recall ever seeing so much bullish sentiment. I think this article sums it up pretty well

https://www.miningweekly.com/article/platinum-group-metals-outlook-constrained-supply-very-strong-demand-growth-wpic-2021-02-08/rep_id:3650

Even chrome is looking healthy. If the gradual demise of Eskom doesn't make the government think twice about the proposed chrome tax maybe the very high ferrochrome prices in China will

TBTT perhaps in 3 months time you'll be on here saying that Iridium is $12,000/oz and you are kicking yourself for not buying at 4,000 ;-).

In 2020 Iridium contributed gross revenue of $8m, and this year $21m (based on my calculations). Assuming a 40% recovery that's an increase of around $8m in EBITDA, or a 7% uplift against 2020 EBITDA.

The rhodium movement is just something to behold. A furious rise, followed by tiniest of corrections, followed by another furious rise is very bullish.

I can tell you what the fully weighted all in THS basket is, I've being tracking it since October.

Gross $/PGM equivalent oz

October: 1,510
November: 1,630
December: 1,820
January: 2,100
February: 2,230
Spot: 2,250

feynzz I think THS is worth double SLP. This will become more obvious as the THS cash balance increases and Vulcan is complete, switching off $50m in capex. I expect the THS cash balance to be the same as SLP by the end of the year. I've done pretty detailed valuations and I think SLP is worth 150p, (Liberum's 200p valuation is excessive) THS is worth over 300p, even applying the minority discount on the BEE interest

One uncertainty for me is the chrome tax though. The suggestion seems to be the China will eat it and retaliate in other areas, perhaps by adding import duties on SA ferrochrome. Perhaps the current movement in prices is partially anticipating that. But chrome is a murky, tiny market so hard to say what will happen, but if they do add the tax it will make things a bit messy

Thanks for posting the presentation. I hadn't seen that. Good to see them consistently keeping in touch with their investors in quiet periods. Slide 4 is good, must have taken Ilja some time to prepare it. Its shame they didn't add in SLP on that chart, right over to the left, about $200/oz higher than THS :-)

You can sign up for a free trial and see all of Liberum's broker notes on SLP at research tree. Its well worth the effort.

In the last week they published two notes, one of which gives a comprehensive review of the rhodium market. It is responding to the view that SLP is undervalued because of doubts around the sustainability of the rhodium price (which I think is a pretty fair conclusion)

They are forecasting rhodium to be above $20k/oz for the next 3-4 years and SLP to be reaping windfall profits, which underpins the 200p valuation. And they speculate that rhodium could head much higher, although based on a very hypothetical calculation of margin differentials between EV and ICE

https://*********************/

I was thinking more 1,2,4,8,16,32....

If rhodium goes to $100,000/oz as Liberum speculates it could a 32p dividend is possible