Member Info for ragnarlothbrok

Nonegs you should be careful in what you read from Motley Fool, they aren't a credible source of financial information. THS does not trade off a forward P/E of 15. And Tharisa is one of the few multi metal producers from a mechanised open pit.

They sell a lot of chrome which the article doesn't mention, which is a glaring oversight considering the market sees them as a chrome producer with PGM by-products. And like TBTT says, chrome prices have been severely depressed over the last 6 months, and as a result supply has been curtailed by the 3 other major producers (and also due to covid), while Tharisa has been operating at 100% from May.

They control their own feed supply and the life of mine is 12 years open pit and 20+ underground. I would recommend approaching Tharisa with an open mind as I think it has more of chance of adding 50% in 3 months than SLP.

Sharper that definitely jumped out at me. Right now they couldn't afford it given their post IPO cash resources market cap but maybe a year or more down the line....

Interesting pivot from MTR here, seems to be an increasing focus on royalties.

Trident invested in a royalty over an Australian iron ore mine in March according to the website.

Could be a future Anglo Pacific in the making...

https://www.tridentresources.co.uk/proposed-royalty-strategy/koolyanobbing-iron-ore-royalty

Yes agree TBTT we could see some significant chrome upside and Tharisa management are expecting it from their comments in the report. China may embark on a huge infrastructure spending program and combined with the SA supply issues in a relatively small and concentrated chrome market anything could happen.

Bangrak I'm a huge fan of SLP but the main thing I like about Tharisa is that it controls its own feed supply so can make decisions taking into account both the chrome and PGM markets. If Samancor owned SLP I think that rather than curtailing production they would be optimising the feed to the SDOs to take advantage of PGM prices.

I'm not really interested in JLP, its assets aren't high quality enough for me and I'm often too confused by the news releases to properly understand its underlying performance.

Your point on liquidity is noted, I won't be looking to exit my position in a hurry so it doesn't really concern me.

No doubt some of that tech stardust from the US has rubbed off onto S4s multiple. Its pretty high but the digital ad sector is hot right now and Martin Sorrell has a point to prove.

Hey TBTT, not bad in the face of a terrible chrome market. The PGM price in Q2 really helped out.

H2 isn't looking great but then its not great for any company really. I've modelled H2 production at 60% of H1 but chrome prices could be 15% higher than the first half. PGM prices in H2 to date are almost the same as H1.

We should see some impact from the lower diesel price in H2 and the rand tanked in April, which will hopefully take some pressure from costs.

@stoodio

http://www.platinum.matthey.com/prices/price-tables

it really runs. Up 16% in 24 hours with the basket back to over $2,100.

Not easy at all, it took me 14 times over the last 3 months. Free float must be less than 10%.

I don't really understand how it can be difficult to determine what the cash flow of the business is.. Free cash flow = cash flow from operations less capex. The FCF yield is sound. Anything else around buybacks acquisitions etc is happening in financing cash flows.

Article in the FT about DGOC move to main market. Theres nothing really interesting in the article, although there is a quote from Premier Miton saying how reliable they think the dividend is. What's interesting are the comments some readers have:

There is something funny about this company seemingly clearing out in a world where US gas prices only go lower. They have been a bit "cute" about decommissioning liabilities in the past, raised money to buy back shares - can see why as one of the few remaining dividend payers they have investor traction but something doesn't feel quite right if viewed over time.

The company's cash flow isn't great and it raises lots of money and pays a dividend. Its hard to get a good picture of operations as they are constantly making acquisitions (and raising money via debt/equity for it).
There is a big risk that this company is only paying dividends from debt/equity raises.

I doubt that many of these commenters have taken the time to read about the company but there it is anyway

https://app.ft.com/content/17acfd49-5c93-4951-9007-0fc4211d742b

Hi TBTT, been building a position here in advance of interims. Samancor and Glencore-Merafe have announced deep production cuts, and Assore has been having trouble with Covid in one of its U/G mines so this leaves Tharisa ideally placed to take advantage of supply disruptions. As you note we can already see the price creeping up as stockpiles reduce.

I'm hoping that the interims on Thursday give its recovery credentials a boost. Every other PGM producer has surprised to the upside with the impact of the Q1 basket. I think we could see $40m EBITDA in H1.

Its like Samancor and SLP together, the way it should be really.

The long term forward price curve reflects the expectation for increased prices from lower oil production, which will eventually trickle through to lower gas production, combined with a recovery in industrial activity.

DGOCs true exposure is to these prices rather than the spot gas price which is fluctuating wildly. It hit $2,200 two weeks ago and then promptly crashed to nearly $1,700 in 7 sessions. Now back up to $1,950 in a couple of days. The long term curve has barely moved.

Theres a presentation on the website setting out more details on the 2 acquisitions. As a someone who spends half their time either writing or reading these presentations I find these decks extremely busy deck with way too much detail. Some interesting points:

- 12% EBITDA acquisition after new share issues = 12% dividend per share increase. I take this to mean that this should AT LEAST protect the dividend for the next 3 years, covering off natural declines and assuming 2022 can be hedged at current forward prices
- 99% gas production. This means that oil will contribute under 5% of revenue going forward. 90% of gas for the combined company is hedged into the end of 2021
- The midstream strategy is quite compelling although would like to see some details around cost KPIs
- It would be helpful to see an acquisition balance sheet disclosing the AROs (and perhaps valuation of midstream). These would be around $150m for the 7,000 acquired wells at $25k a pop although with an average 30 year age its unlikely to be much in present value terms

https://d1io3yog0oux5.cloudfront.net/_a5888e639151f685f370c1b3e185b9c2/dgoc/db/557/4307/pdf/DGOC+Acquisitions+2020May+vF5_for+website.pdf

Indeed candybelle. The decimal is in the wrong place. A man can dream

https://www.bbc.co.uk/news/amp/business-52638629

I've bought 13 blocks over three years with the first in March 2017 at £3.08 and the most recent at £1.14 in April. Now with this recent rise its suddenly 7% of my portfolio and I am officially in the blue at £1.7. Happy days now but what a lesson in patience and timing its been for me

Michael Joseph has certainly helped the cause, hoovering up £0.5m in loose stock over the last couple of months

This highlights another huge advantage of mechanised surface mining/processing. A lot of the underground mines in SA will struggle to get their unions over the line sending them down those deep shafts while Covid is lingering in the communities. As if the risks weren't enough.

I wonder how the lack of feed supply will impact Impala's smelter operations. I never did establish SLPs smelter, but it seems most likely to be Impala

Good to see Pd having a 5% rip like back in the boom days last year. Even Pt is back to 80% of pre crisis levels

Not that I pay much attention to brokers as they have ulterior motives but the consensus for Loop up is BUY with a price target of £1.96. Consensus EBITDA is £11.8m in 2020. Revenue is £51m, only 25% up from last year. Current valuation therefore around 5-6x a pretty conservative EBITDA. Loop used to be valued at 20x EBITDA back in the days when it was growing quickly from a small base but those times are long gone.

I'm betting that this is significantly understating the opportunity and EBITDA will be much higher. I think revenue could be 40% higher, not 25%. Its just a guess really but the trends are its favour and the operating leverage of the business is phenomenal with a gross margin of 66%.

Those stats doesn't include delayed trades. There was at least 90,000 sold in 3 blocks. I think it was simply a large seller taking some off the table or perhaps moving them.

I grit my teeth and topped up at 113.75 after that little shake

I'm convinced wfh will be the new norm: Facebook and Google working from home until 2021. And Twitter employees have the option to permanently wfh. Not clients of ours but industry leaders that set the pace and expectation.

Remote calling is an ideal cost saving initiative. Airlines will be decimated and after an initial discount period prices will go up by next year I think, another nail in the corporate travel coffin. The need to cut costs by many companies to match their structurally damaged revenue will make investing in remote meetings a no brainer

I think revenue will continue to be elevated at least for the next 4 months. Hear talk of some offices not opening until September and many offices opening under some kind of traffic light arrangement where capacity is massively reduced.

Longer term there are plenty of structural drivers for revenue growth like increased working from home for a number of reasons and reduced business travel, both of which imply more remote meeting minutes than pre-covid.

Some serious profit taking today. How are the buyers going to react?