Member Info for ragnarlothbrok

Patience indeed. After running hot for 3 months and putting on 50% SP has just been consolidating and taking a breather. But with copper about to breach $8,000/t and zinc closing in on $2,900/t should get interesting again here soon. Point noted about recently underperforming against other copper stocks like Atalaya and Antofagasta

Hi TBTT, Heres a link to the presentation where they discuss the restructured SLP. Unless Africa Asia Capital has changed control yes its Samancor

https://www.sylvaniaplatinum.com/component/jdownloads/send/63-2010/105-investor-relations-presentation-7-october-2010?option=com_jdownloads

This is Samancor. They have been a shareholder since 2010. The website says they held 57m at 30 September so this looks to be a reduction to 54m rather than an increase

The SP may be taking a much needed breather but the basket hasn't stopped...6E basket at $2,650/oz, 3E at $3,100/oz both Tharisa records...Rh reached $16,500/oz, Pd pushed to $2,350/oz, Pt pounced on $1,055/oz

By products (nickel, copper, iridium) all doing well and even chrome ticked up a little

I've been slated before for saying I've sold a few. Some posters get very sensitive about these things. I also see a host of opportunities, particularity in the commodities space and the heavily beaten down small caps which have not started to recover, and can't see much moving EVE until late Jan. I'm thinking possibilities about whats happening in EVE

- the TU is a minimum performance and the actual result may be better. They couldn't possibly be content with a loss like that could they?
- H2 is a period of one off brand investment, disruption and intense competition meaning GM% may be lower but will improve next year as these elements unwind

Hey Wyndrum,

On first glance I was happy with the TU but then I went and crunched the numbers ... H1 performance was sales/EBITDA 12.2/-0.8. If the full year guided performance is revenue of 24/-2.5 then this means H2 is 12/-1.7.

While sales expectations increased by 2m, EBITDA only increased by 0.1m. This is only a 5% drop through, meaning they have increased their marketing/admin costs to deliver that extra £2m. We knew they would do this, but this means its highly unlikely that they will consistently turn a profit at any level in H2. I think H2 was a period of heavy brand investment, and intense competition leading to aggressive discounting and think H1 next year may bear the fruits.

Based on the above I decided to sell 2/3rds of my position after the TU. I thought sales would improve but the journey to profitability became more murky. My position was very overweight and have pulled it back in line with my other investments.

Before I get crucified for deramping and trying to get a lower buy in price, this is such a positive, balanced board I thought I would share my change of heart and reasoning. I'm still holding a third of my original amount and keen for the company and SP to do well, so watching with interest for results next year.

I'm looking now at the chart and the gap from that disappointing news in November 2019 has now nearly been filled. Investors should be pretty comfortable paying up to 110p. BUt Tharisa is such a different beast from a year ago. Prices, productivity and production have all been given a massive boost with a renewed interest in the quality of the Tharisa complex.

The next news will be the Q1 production report, released on 12th Jan.

https://www.tharisa.com/ovr-calendar.php

Morning TBTT, The primary PGM producers will be incentivised to produce as much PGMs as possible right now, meaning the chrome by products will also be flying out the door. I think this is what has tipped the market into imbalance. Amplats alone produces close to 1Mt of chrome

A Metal Bulletin subscription is well beyond the means of us PIs. Like myself TBTT will check in occasionally to see if there is any info on recent price moves.

I also use the below site, it doesn't say what the current price is but it does give an idea of how prices have moved more frequently than MB (which may only be weekly). If its correct we should prices have ticked up by $2 back over $130/t

http://www.asianmetal.com/ChromeOrePrice/ChromeOre.html

Agreed on the Brexit protection. I don't think you can say the seller is done though. I've noticed those large sells coming through over the last few weeks and you always seem to be able to get a bid well over the sale price. I think its demand coming through and the MMs having the confidence to take on stock. Its certainly positive that you can sell £150k at 91p. Two months ago selling £15k could move the price down by 2p. The timing of the sale of those employee share trust shares a few months ago is pretty unfortunate

Our year end 100p target isn't too far off. Still a couple of weeks to get there

All this talk of the various PGM elements made me curious about the market sizes of each. That rhodium number is particularly eye watering ($17.6bn) ....

Metal Demand (mozpa) Price Market Size ($m)
Ruthenium 1.10 $280 308.0
Iridium 0.40 $1,700 680.0
Platinum 8.50 $1,000 8,500.0
Rhodium 1.10 $16,000 17,600.0
Palladium 11.50 $2,350 27,025.0

Ok thanks Jammer that makes sense. I think chrome penalties are incurred for the fine chrome they can't remove from the concentrate. I believe that's one of the reasons why SLP achieved PGM revenue per ounce is so much lower than Tharisa's. Removing the chrome from heavily oxidised dump material is more difficult than the current arisings

Well done. I think its outstanding value at this price but I couldn't possibly fit anymore more in the bag, its bursting at the seams, I'm neck deep and the cup runneth over... 26 top ups since February!!

I'm pleased about his comments around recent improvements in liquidity. I wonder if he occasionally gets on the boards like Stuart to gauge sentiment.

Some very favourable price movements today for PGMs, I thought Rh might be due for a little pullback but seems unlikely now

Everything going in SLPs favour today price wise, GBp tanking, PD up 4%, Pt up 3%. The ZAR has been strangely increasing in strength, but personally I see the ZAR becoming less relevant given the huge ZAR denominated cash balance and the weakening of the GBp. The current price environment is very favourable for overseas metals producers, particularly dividend paying ones

*Good chat*

God chat with Phoevus. I wonder why they haven't included a 2022 potential run rate of 200kozpa 6E PGM in their latest presentation or communications. That's huge news. They aren't calling it Vision 2020 anymore but the plan is still in place

I found the response about a 5% increase in grades and 5% increase in recoveries a little cryptic. 5% grades is coming from the pit redesign to access higher grade material, does recovery come from processing higher grade material?

My overall impression is that there is huge potential for lower costs from recoveries, grades and volumes over the next couple of years.

f you are talking exchange rates, something you shouldn't underestimate is the the GBP/USD and GBP/ZAR rate... a weak GBP means the value of future dividends (paid in Gbp) is higher and the ratio of earnings to the share price (in GBp) improves. SLP is very much a hedge against a weaker pound

Hey Visitor! In truth I had to ratchet up a lot of unit costs and aggressively flex for volumes and fx to get an EBITDA that low. If prices hold then it wouldn't surprise me to see closer to your number.

The Q121 PGM production results could be interesting... in Q420 they already hit the 40koz/qtr, I think they could have something in the bag. The Vision 2020 targeted 50koz/qtr. Covid conveniently made that disappear but a lot of those initiatives would still be in the pipeline

I see THS as a pure co producer so don’t do a separate P&L for chrome and PGMs. I’ve based costs on 2020 unit costs but loaded them up to cover any surprises so there could be some upside for increased production and efficiency. I expect a dividend yield of 11% (based on the very low policy payout ratio) so could be some insignificant upside:

Chrome Production: 1.5Mt
PGM Production: 160Koz 6e PGM

Chrome Price (Realised): $120/t
PGM Price (6E Realised): $2,231/oz (v market price of $2,431/oz)

Chrome Revenue: $180m
PGM Revenue: $357m
Agency/Manufacturing Revenue: $26m
Total Revenue: $563m

Mining Costs: ($149m)
Processing Costs: ($71m)
Selling/Freight: ($89m)
Admin/FX/Other: ($50m)

Operating Profit $204m

Depreciation: $26m
EBITDA: $230m
Dividend: 9.7c/share