Member Info for ragnarlothbrok

Hey TBTT! Time to tip some of that warchest into the market? Tharisa was hot for 80p for a while but there was £80k in late sells which halted the charge. I'm feeling very bullish about rhodium and the impact on Tharisa’s cash flow. Last week I predicted $15,000/oz and we are already on the cusp of that. I think $20,000/oz by the end of the year is not an impossiblity. The Amplats news still hasn't soaked in yet..they must produce 40% of the world’s rhodium and have just reduced guidance by 20%. That’s an 8% reduction in supply until the ACP s back up and running. My guess is the buyers know how tight it is and will soon be prone to panic buying to ensure they are prepared for the recovery in auto demand as the world moves ever closer to the vaccine, which will further exacerbate the deficit. We have a demand and a supply case for rhodium. Palladium as well, to a lesser extent. Pt, well all we can do is hope for the best on that one. And lets hope the SA government have got the chrome tax right and China ends up paying it rather than SA producers

Exciting stuff ;-)
Its all happening

This article fills in some blanks about this potential acquisition. I was particularly interested in the rehabilitation costs. Once you factor these in the cost is much higher. I spent some time trying to work out which mines these tailings came from with no success. I don't think the TSFs have been touched for at least 10 years, who knows how long they have been sitting there for...

Mintails went bust around 2015 and the administrators have been dragging this on for years. No wonder the due diligence is going to take at least 6 months, taking on the rehab costs is a pretty risky proposition, but the sheer amount of contained gold is a juicy prospect.

Looks like a stand alone plant just like Elikhulu at a cost of at least $100m with no operational synergies with the other plants. So I would say first production 3 years from now at the earliest but its a fantastic growth option to have and PAF will have learned alot from building Elikhula so should be substantially de-risked from a construction perspective

https://www.miningmx.com/top-story/44286-pan-african-sets-out-r50m-option-over-mothballed-mintails-prospects-west-of-johannesburg/

Took advantage of the lockdown boredom over the weekend to have a read over the latest trustpilot reviews. Must say that overall I was very impressed by the level of positive feedback. The one criticism which popped up more than once was around the pillows, mainly from people with chronic discomfort or pain. I struggled to find a bad review about the mattresses. The impression around customer service was that it had substantially improved from that bad September patch with very few complaints. Just looking at the first page out of around 20 reviews, only 2 were 4 stars with the rest excellent. Only 1 week into November and already the same number of reviews as the whole of October which is curious. Hopefully those mattresses are flying out the door leading into Christmas.

While we all recognise the limitations of using trustpilot to assess financial performance there can be no doubt it’s a useful tool for assessing customer satisfaction, quality and ultimately the strength of the brand.

https://uk.trustpilot.com/review/www.evesleep.co.uk

Yeah totally agree. If SA are taking on the Chinese who would you back?

Nonetheless, I have written off chrome and made two tops up here in the last 2 days (It wasn't that juicy 45k trade today if you're wondering) My rationale being Tharisa has barely budged despite the Amplats news and the sharp increase in the basket this week. The 6E PGM basket is at a record and I think more to come from RH.

I hope so.. they have messed it up in the past and over recruited roles (2019) before the revenue materialised. Different times now though with some huge structural shifts taking place. We could use some news of a juicy contract or two. It seems unlikely we will get a trading update until January

Another month or two of gold prices over $1900/oz and that's a special dividend in the bag I think. This will be paying a dividend well in excess of 5%. Another 6-9 months of these prices and Poly will be yielding 10% this time next year

Not surprised to see you skulking about here Shareminator. I've been accumulating here recently, I thought the accident presented an opportunity for a cheap entry into a quality company. I've been in and out of CAML for around 5 years now and its never let me down. I see this pushing over 200p and as far as 250p over the next 6 months

I would disagree with Temple of Doom, with the likely takeover of KAZ there are few options left for mid tier copper and zinc exposure, and recent incident aside the management of CAML have played a flawless campaign. I feel very confident in them as custodians of my cash managing the risk of the operations. Currently it trades at a historically cheap valuation, on a book value per share, EV/EBITDA and free cash flow yield basis. I see the risk reward proposition as being very attractive and the SP does not properly reflect the recent prices moves in copper and zinc. Could be some way to go in Cu/Zn as we embark on this impending asset price journey.

I am not surprised to see management hold of on the dividend discussion. The TS4 incident requires some discretion around shareholder returns, and I wouldn't be surprised to see them choose to pay a more conservative dividend

Literally millions of ounces have been taken out of the market from this in 2020... Amplats guidance for this year has fallen from 4.5 to 3.3 and now 2.5 moz. That's significant for every PGM element. They are continuing to mine and stockpile but its possible that they never get through it all and catch up. I see rhodium breaking through $15,000/oz soon. This is a very significant event for prices and the cash flow of PGM producers

Some interesting press around the chrome tax... as expected the non integrated producers making the most noise. I don't know if the introduction of this tax is corruption or incompetence, but most likely a mixture of both. Only fools would try to support an energy intensive industry in the absence of a clear energy policy. I'm not opposed to the concept but it needs to be done with proper industry consultation and planning.

They should take an example out of Australia's book regarding aluminum. Rio Tinto has been progressively winding back its downstream aluminium production, recognising Australia's high energy costs and lack of competitive advantage in power costs, labour and fabrication. What they do have is huge in situ reserves of bauxite and a safe and highly mechanised mining industry. So the government is content to allow Rio to produce and ship the raw materials at the lowest cost globally to China for downstream processing.

This reminds me that SA is still a part of Africa. Just another reason for foreign investment to stay far away...

https://www.pressreader.com/south-africa/business-day/20201106/282166473699391

https://www.miningmx.com/news/markets/44267-sa-chrome-industry-at-odds-over-govt-tax-ore-exporters-say-only-suits-glencore-samancor/

Tharisa Minerals continues to supply the majority of its PGM concentrate to Impala Platinum in terms of its offtake agreement and is paid a variable percentage of the contained PGMs and base metals contained within each tonne of concentrate in terms of an agreed market formula.

https://www.tharisa.com/our-tharisa-mine.php

Morning TBTT, Tharisa use Implats

As expected, the chrome producers without ferrochrome facilities strongly oppose the introduction of the new tax. The point about lack of consideration of the capacity of South Africa's competitors to meet demand is well made

https://www.miningmx.com/trending/44238-chromesa-rails-against-egregious-misconceptions-of-proposed-export-tax-on-chrome-ore/

Anglo is now bearing the fruit of underinvestment in its refinery complex...Thats a sizeable reduction in output, with rhodium likely to be worst hit in percentage terms. Keep an eye on the rhodium price today

As a result of the closure of the ACP Phase B unit, the Company has lowered its refined production and sales guidance for 2020 to c.2.5 million PGM ounces (previously 3.1-3.3 million PGM ounces). There is no change to other guidance, including M&C production which remains at between 3.6 - 3.8 million PGM ounces. The Company has contingency plans in place and will be engaging with customers to minimise any disruption to contractual obligations.

https://www.investegate.co.uk/anglo-american-plc--aal-/rns/anglo-american-platinum-closes-acp-phase-b/202011050705013601E/

Lack of liquidity ACboom... its dried up over the last few weeks. IG wont let you open a position if they can't cover it

One thing that stands out from the latest qtr results is the huge build in working capital to around $55m, easily surpassing the previous record of $44m (after that huge qtr in Q320). The next 6 months is going to be truly incredible for cash flow as that balance unwinds. Normally debtors days are around 140 days however I estimate this has increased to 170 days reflecting the various disruptions. I would expect this may take more than one quarter to fully unwind back to normal levels, maybe even a year, given the disruptions to the refiners and the consequent inventory build.

Net result is I expect closing cash of $77m at December and $105m at March 2021, despite an elevated level of working capital, which will continue until prices fall significantly or the refiners work through their inventory (unlikely). We also seem to have an exchange rate tailwind with spot ZAR 4% lower than Q1 close which I have not considered and which could add on a couple more million.

All eyes on rhodium until then, currently SLP generates a whopping 62% of revenue from rhodium.

Can't see much point in the regurgitated various PGM market information. I actually fell asleep! The highlights were the questions at the end:

Why the elevated strip ratio never seems to go down? Great question, didn't really get an answer
Why does Tharisa trade at such a discount? Failed to mention the severe lack of liquidity, the EBT and now Fidelity liquidation

I’d rather hear more about the cash flow potential. Hopefully the full year presentation will be more informative eg what happened to Vision 2020? They were supposed to be on a run rate of 200kozpa by the end of the 2020 calendar year. When is that likely to happen?

Agreed on cash flow for 2021, if current prices hold EBITDA would be well in excess of $150m. Consensus is for $144m likely with a lower level price deck than current prices. That's less than 2x EBITDA. If this is met and they continue to meet their dividend goal we should see a dividend yield of over 3% this year and closer to 10% next year

Results almost exactly in line with our previous expectations on this board., I think we are all becoming pretty good at forecasting SLP quarter results. A credit to the SLP for giving us the tools and also for delivering. Slightly higher than our 'consensus' mainly due to the $4m sales adjustment

Sorry maybe I'm being obtuse... I thought it was simple. Cisco resale revenue has declined through the pandemic. If its not going to increase in H12020 then it never will. Its being managed by LOOP as non core, diluting core LOOP margin and only contributes less than 5% of gross margin. I just cant see any growth opportunity there

Thordon,
Revenue from third party (Cisco) resale services declined in the half from £4.2 to £4.0, despite the impact of covid. And margins on this part of the business are terrible compared to core LOOP. I can't recall LOOP mentioning this in the last 6 months as a significant revenue stream or with any future potential. They deliberately strip this out from core revenue and core gross margin. The article you posted is from 2019...I think that ship has sailed