Member Info for ragnarlothbrok

Hi Visitor, I think its VERY likely that Vulcan will be deferred again. It's difficult to make investment decisions with this kind of uncertainty over future cash flows.

I agree that EBITDA to market cap is a crazy ratio, under most price scenarios. The PGM basket has soared by 40% over the past 4 months while Tharisa has been stuck in a 70-80p range. I don't think the 75% share applies to the full profit though, only the mining profit. I think total EBITDA for this year will be closer to $200m than $150m if these prices persist

There seems to be so many reasons why this tax is a bad idea... I haven't heard any support for it from outside the government

Hi Frac , Do we know what gross margins are going to be like on the Teams revenue? I believe they're included at as part of core Loop and so we can't see it separately.

I'm personally holding off on getting excited about teams revenue until I see the numbers. I imagine it would put a fire under the SP if we see anything like those Calltower growth rates

After my recent top ups at 189 and 159 I'm pretty eyeballs deep now in Loop, very little dry powder left

Hi Soder, I factored in lower revenue in July and August (and I've pegged December as the lowest) but not by much. I think that with the new business wins in Q2 this would mean that peak revenue is probably Sept-Oct

I guess one thing I might be underestimating is the cost of switching to two year contracts with minimum spend. Sage took a hit today as its growth in recurring revenue was offset by a reduction in non recurring revenue. There may be a period when LOOP contracts are rebased which may impact on marginsm as has been hinted to by Progressive and the Loop announcement

Hi Sirius, I have a DCF and have used this for SLP as long is I've held it. I use annual production of 70kozpa. This runs for 6 years and then the dumps start running out so that by year 8 SLP relies solely on new feed which i assess at 30kozpa. I have used current spot prices and the most recent unit cash costs with some inflation applied. I don't factor growth as management have not indicated any sources of production growth

My DCF valuation is 110p. There is some upside to this which I don't consider:

- Projects such as Volspruit
- Production growth
- Price improvements

My discount rate is 20%. I spent many years working in corporate finance and excessively complicated discount rate calculations are a lot of hocus pocus. It should simply be what your required rate of return is for that investment. I use 20% for small cap mining companies in SA but that's my personal choice as I like to have a high threshold to give me comfort around my valuations

I've never heard of Calltower. Seems like these guys are a direct competitor in the US. Thanks for sharing. I'll take 293% growth! If I recall LOOP had around 100 direct routing customers with an average of £25K p.a. for revenue of £2.5m. Just 100% growth would be an additional 100 customers at £2.5m/year.

Thordon good to see someone with a forecast even more bullish than mine. I haven't included any additional Teams revenue in my figures. Adjusting for that we are probably pretty close. I just cant see how H2 revenue could be less than H1. If we focus on professional services:

H1: we saw 3 months of normal conditions with 3 months of severely curtailed activity, and limited office attendance with a lot of businesses not even operating for a month.

H2: the majority of businesses were back at more levels of activity but with pretty much no attendance for 6 months.

How could there be less revenue under this scenario?

Hey TBTT, I've been spending some time contemplating similar things myself this week...

Apparently Glencore/Samancor have around 30% unused ferrochrome smelting capacity between them which is latent because of low FeCr prices and the electricity situation. My first thought was maybe they could develop a similar approach to PGM and do some toll smelting for the non integrated producers like Tharisa. Possible

My second thought was could Tharisa be considering building its own smelter... I wasn't aware there were unused smelters which could be available with some refurbishment...

My third thought was maybe there will never be a tax. They have been talking about this for years and it might just get kicked down the road again

Ultimately any solution to this needs power which SA just don't have at the moment. The power issues over the last 15 years are more to blame for the lack of competitiveness than anything else. I cannot imagine any of the SA producers investing in new ferrochrome capacity when there is no power. Can you imagine new ferrochrome capacity being built and then just as its commissioned they go through load shedding again?

And at the end of the day the Chinese are going to slap some tariffs on some other SA industry anyway which will probably result in job losses somewhere else, all for a couple of thousand jobs in the ferrochrome industry

Hi Soder, I suppose they have already flagged exceeding expectations so their statement on the outlook from early Jul below would still apply. If they were going to undershoot consensus then an announcement would be required. Given they don't seem able to forecast accurately that probably wouldn't happen until late December or early Jan

"Although it is difficult to predict near term developments in working practices and business climate, and also noting that seasonal usage is naturally H1-weighted, we expect to exceed market expectations for the current financial year to 31 December 2020 in terms of revenue, EBITDA and cash generation."

https://www.mining.com/zinc-soars-as-vedanta-halts-gamsberg-mine-after-accident/

I nearly fell off my chair when i saw that basket increase. Its actually closer to 40% when I put today's BASF rhodium price of $15750

I'm convinced there is a big sell limit order around 79p and something is being worked through. We need a volume event to trigger some action, if its not a trading update it could be results

That wasn't right.. try this

Me
H1 EBITDA = £12.2m
H2 EBITDA = £13.3m
2020 EBITDA = £25.5m
EV/EBITDA = 3.5x

Took the opportunity this morning to re run my LOOP model. H2 consensus is clearly wrong but I have some very bullish numbers! What does everyone else think?

2020 Consensus
H1 EBITDA = £12.2m
H2 EBITDA = £4.9m
FY EBITDA = £17.1m
EV/EBITDA = 5.2x

Me
H1 EBITDA = £12.2m
H2 EBITDA = £4.9m
2020 EBITDA = £17.1m
EV/EBITDA = 3.5x

So when is Tharisa going to break out... its been in a tight range between 70 and 80p since July 22. Since July the basket has appreciated by 35%!! The Bid/Ask has been steadily tightening this week so that now its at 79/80p for 10K

Thanks Troajan. Someone needs to tell Goldman that we have been in a commodities bull market for 7-8 months now

Hi MagnaOpera, I must admit got a little excited by the drop on the vaccine news and filled my boots at 1.89 a week or two ago. But took a few more at 1.59 this morning. Its a bit of a gamble but I think H2 will be massive.

This move has been purely sentiment driven. I don't think much has changed regarding the valuation of the business. All 3 brokers had factored some kind of return to normalcy next year. Although I would say that the focus on the vaccine has made people a little complacent about how quickly things will return to normal and they will get back to work. I can maybe see them vaccinating 50% of the population by the end of 2021 at best.

LOOP is winning new business. STICKY new business. That doesn't just drop off a cliff overnight. LOOPs accelerated revenue rate will persist well into the middle of next year at least. I have friends in Sydney who told me that most offices are at less than 50% capacity and they don't even have any covid. People don't want to go back into the office every day, covid or no covid.

Volume has been up a little the last couple of days and the vaccine news has impacted on the remote working perception which scared any buyers away. Some institutional-sized selling has been offset by PI buying, which you can see in the Interactive Investor stake (though would have increased when they took over the Share Centre).

Jupiter RNSed dipping below 5% in early October but based on the website they still hold 4.6% so doesn't look its been them recently. Most likely its the macro themed hedge funds which are bailing and rotating into the burnt out sectors.

The fact that there wont be any updates for H2 until February, well after the end of the year, is very discouraging for investors. LOOP refuse to provide any trading updates or any indication of performance which just causes uncertainty and doubt and hurts the valuation. And requires a lot of faith in management (who have been proven in the past to not be able to control their spend).

At times like this panic selling is the last thing you should do. Grit your teeth and FILL YER BOOTS

Hi ACBoom

Cheryl as put in place because of her CMO experience! She is from a pure marketing background. Since she started they have drastically pulled back on spend and getting the much improved return on investment

https://www.marketingweek.com/eve-cheryl-calverley-becoming-ceo/

That was some reversal in the Pt price at midday. The price was in freefall to hit 912 but has but on $40 in the last few hours

A good day to have platinum in the name eh TBTT?

Rhodium has put on another few hundred dollars this afternoon and Pd is grinding higher in its usual erratic ascending channel

Momentum seems pretty good to me. The SP has pretty much straight lined it from mid September

Positive sentiment towards PGMs seems to be quietly building although I don't rely on the WPC publications one bit. Investment demand is the biggest unknown. How many years of surpluses need to be worked through before one annual deficit impacts the price?