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A consideration when looking at YoY prices is the reduction in marketing spend.

Last year out every £1 of revenue 75p was going on marketing spend. Now its closer to 25p. So if you reduce prices by 30% this will give a margin after marketing of 100 * 70% - 25p = 45p. This compares to last year which was 100 - 75p = 25p.

So last year was heavy marketing, higher prices, for a post marketing margin of 25%. This year is lower, more tactical marketing, but lower prices for a post marketing margin of 45%.

Working from home is becoming a contentious issue. One thing that is obvious is that while wfh will not continue at the current rate it will definitely feature in our lives going forward. A couple of articles from the Guardian

https://www.theguardian.com/cities/2020/oct/26/the-great-rebalancing-working-from-home-fuels-rise-of-the-secondary-city

https://www.theguardian.com/business/2020/oct/26/working-from-home-is-proving-to-be-a-revolution-in-our-way-of-lif

Empee I would suggest emailing the company to ask: ir@loopup.com

A consideration when looking at YoY prices is the reduction in marketing spend.

Last year out every £1 of revenue 75p was going on marketing spend. Now its closer to 25p. So if you reduce prices by 30% this will give a margin after marketing of 100 * 70% - 25p = 45p. This compares to last year which was 100 - 75p = 25p.

So last year was heavy marketing, higher prices, for a post marketing margin of 25%. This year is lower, more tactical marketing, but lower prices for a post marketing margin of 45%.

I think I recall they said the windfall dividend would be based on the Rh and Pd price for calendar year 2020 so would expect news and clarity of this in Jan, maybe the Q2 report might have some more details. They only have 3 board meetings a year so would need to fit in with that as well. I'm not expecting anything interesting from the report, they said the next 6 months about projects so again probably next year. I'm curious as to how production and cash costs after recovered after the stoppage

Also mulling a London listing. Could be another Russia focused producer joining by the end of the year. Seems like they believe the sum of the parts is greater than the whole and are looking to split the more risky Russian and West African assets from the Americas assets. The new Kinross would be much smaller than Poly, its Russia production is around 500kozpa

https://www.reuters.com/article/us-kinross-gold-dvst-idUSKBN272016

Hey CYB,
Indeed SLP have consistently released Q3 results in the last week of October for a number of years. I would like to see them release results on Thursday 29th which is ex dividend day for 1.6p. All other things being equal the MMs would drop the price on open but good results could confuse them terribly :-). They tend to get a bit confused on dividend day for small less liquid stocks

Still a lot of unanswered questions before getting excited about this... How long is it going to take SA to build new ferrochrome smelters to convert all that chrome which is currently being exported? What are the additional power requirements of increasing the smelting capacity? How much is the proposed tax? How much Chinese demand can be sourced from other countries like Turkey or India. I believe that SA have been dithering about this for at least 5 years now with no progress. Without seeing all the facts I'm pretty sceptical of anything the SA government do. Especially when they are taking on China

D-Geeman I'm often guilty of ramping myself into buying more :-)

That tax seems like a truly awful idea. Would make sense if the country has cheap excess power. They can hardly keep the lights on as it is and they are now trying to encourage more ferrochrome production, which is an incredibly power intensive process

Hi CH Bones. Do you have a link which confirms Impala? SLP has stated in the past that they use both but I think Implats is the bulk

POLY confirming an issue free quarter really separates it from the pack this week if I have a look news from some larger London peers

Fresnillo: Full year gold production guidance reduced by 5%
Hochschild: Quarterly production improved but huge reduction compared to last year continues
Centamin: 2021 production guidance 5-10% lower than 2020
Petropavlosk: More governance issues on the back of cuts to guidance earlier this month. Highlights the risk getting in the middle of disputes between Russian oligarchs

So the feedback loop could also be

high PGM prices
high chrome by product production
low chrome prices

Recommend all holders read yesterday's Q3 production report from the largest producer... interesting implications for smaller competitors. I have noted a few comments over on the THS board.

https://www.angloamericanplatinum.com/~/media/Files/A/Anglo-American-Group/Platinum/investors/quarterly-production-reporting/q3-2020-production-report.pdf

There is one comment in particular which caught my eye because I have never been able to be sure who SLP's refiner is but have suspected its Impala rather than Amplats. Neither Amplats nor Impala have ever mentioned SLP in its reports, which I find a little strange...

"Purchase of PGM concentrate (POC) from third parties, increased 8% to 270,200 ounces (platinum POC increased by 13% to 136,000 ounces and palladium POC increased by 10% to 57,200 ounces). Increases in volumes were from Bafokeng Rasimone Platinum Mine and Platinum Mile while lower production was received from other providers."

Noticed Amplats production report from yesterday. Sad to see that there were two fatalities in the underground operations. And they also seem to be struggling with Covid. Its a good read and recommended for any holders of THS and SLP. It really emphasises the advantages of having mechanised surface operations.

I've noted a few points:

- Amplats actually produces around 1MT of chrome per year. This makes it the 5th largest chrome producer in SA after Glencore, Samancor, Assore, Tharisa. Q3 chrome production looks like a record, which doesn't help the market
- In general mining has recovered but they have had continued issues with the ACP meaning production is likely to come out at the bottom of their previous guidance. Refining operations look to be suffering from some historic underinvestment and I expect there could be further issue into next year
- inventories are building reflecting the downtime meaning that some volumes are being taken out of the market
- I estimate that around 30%+ of global rhodium supply comes from Amplats, this report is most likely good news for the rhodium market

https://www.angloamericanplatinum.com/~/media/Files/A/Anglo-American-Group/Platinum/investors/quarterly-production-reporting/q3-2020-production-report.pdf

Hi TBTT, good questions... firstly automotive accounts for around 20% of global stainless steel demand and we know how badly this has been impacted by covid. Secondly there are huge amount of chrome stocks in China from chronic oversupply from South African producers. Nickel hasn't been impacted as badly because its supply fundamentals and green energy credentials

Your other question made me wonder if the Glencore/Merafe JV produces any PGMs. I guess it must but I cant see anything in its reports. We know that Samancor produces PGMs, we know that Tharisa does, what about Glencore and Assore? Also, do the PGM majors produce chrome? They are all mining pretty much the same reef, so shouldn't they all be producing PGMs and chrome to some extent.

In theory there should be some feedback loop between chrome and rhodium if Glencore actually produces rhodium from its reef. In theory low chrome prices = low chrome production = lower rhodium production = high rhodium prices

I suppose this is Cheryl's strategy - tactical marketing. Maybe youtube ads just don't deliver the profitable return on investment EVE is looking for. Cheryl has a pretty decent marketing cv, I saw in an interview this is the first role she's taken which doesn't have 'marketing' in the title. I would take a £100 reduction in sales for a £20 improvement in gross profit any day of the week, we just have to assume she knows what she's doing until we see more results

I've been getting Simba ads on youtube all the time. Perhaps because I've been reading reviews of the mattress companies on trustpilot.

The lower web traffic this month seems to be consistent with fewer Trustpilot reviews so while its not scientific it does all seem to tie together. Negative reviews seem to relate to either degradation of mattresses bought over a year ago or customer service issues. My impression is that Eve were operating at capacity for August/September which could explain service complaints. I guess a lot of supply chains and manufacturing capacity have been rigorously tested by C-19 and these types of challenges are expected

I have been trying to look at the historic correlation between chrome port stocks and prices to get some idea when we may see a recovery in chrome prices. Tharisa used to publish monthly charts comparing the two but no longer, so since then its collecting scraps. Some high level observations are:

- current stocks are around 3.6Mt. This represents over 3 months of China demand. This is elevated against 2018 which saw an average of 3.0, with a range of 2.4-3.5. Monthly average prices were between $160 and $205/t. For calendar H2 2018 prices and stocks were very stable at 160/t and 3Mt
- the impact of covid was to take around 0.7Mt from port stocks
- the lowest stocks I've seen were in Feb 2016 at 1.44m

My conclusion from this is that the Chinese are prepared to tolerate mucher lower port stocks before prices will rise. The impact of covid was to tip to the market briefly into deficit but that is now back close to balance, perhaps a slight deficit. Uneven demand, questionable global recovery and restoration of SA supply will further support this state. Its hard to tell what the impact of SA curtailments will be but global demand is lower so I don't expect it to impact the market much

So I don't expect a recovery until stocks get closer to 3Mt and we some some evidence that the SA curtailments have created a lasting market deficit rather than just being a temporary reduction in supply which is offset against lower demand.

Probably wise TBTT. There could be a chance of a 5-10% currency movement either way with the Brexit and election shenanigans