Member Info for ragnarlothbrok

a little virus can stop women buying clothes on line after all

Looks like rhodium is finally dropping, approaching $8000/oz today. The last time rhodium was over $10000 it fell to less than 1000 in months, so perhaps investors are scared of that happening again. Many have no doubt already crystallised 50% losses from the highs of the 60s. ??

Its not quite panic stations yet for me, at the current basket I peg an NPV based valuation for 8 years of production with +100% upside. Underpinning that is cash at December of $34m, rising to over $50m by June on a Mcap of $110m. The SP follows the cash.

The basket right now is back to early January levels, but how much lower will platinum go? Its already pricing in a huge surplus, reflecting the carmakers shutting down and investment and jewellery demand falling off a cliff. Its an easy short which will need to be covered when auto manufacturing restarts. And some of the miners with more Pt favoured prill splits may be contemplating some curtailment . I'm looking to you Implats...

Sosander's £5m raising 5 weeks ago at a 50% premium to the current SP was fortuitous. A nice war chest indeed. What all the voters are doing liquidating their holdings to balance margin calls is irrelevant to the day to day when you have cash in the bank.

Perhaps its a good time to be an ONLINE only business. I wouldn't be surprised to see SOS perform pretty well through this period, online should get a tailwind from the people working from home, although whether that extends to non essentials time will tell. Should be a trading update around Easter to tell us if the recent growth has been maintained in face of the headwinds.

Physical retail sales will inevitably collapse over the next couple of months, Laura Ashley the latest casualty, with digital most likely taking up the slack.

Since 2014 I think you can count on one hand the number of times that SLP has finished more than 10% down in a single day....

Hi TBTT. Been drip feeding a bit myself, good idea to keep some dry powder for the next round. I don't think we've seen the bottom yet. Its a shame they didn't do the buyback today

On a 2 year horizon should be fine! But yes bound to head lower in the ST with this level of negative momentum and out of control volatility

At 32p market cap is $115m. I'm expecting cash in bank plus net current assets to be 80% of that by June and well in excess of that by next year unless there is another huge reduction in the basket price.

Market is pricing in a run on the SA banks and/or the refiner not being able to pay us anymore

A bit of news over the weekend about how quiet its been in Africa on the virus...

https://www.sciencemag.org/news/2020/03/ticking-time-bomb-scientists-worry-about-coronavirus-spread-africa

Brave move there. I bought a few as well but not that size. Now down 28% to 32p. Extreme dislocation is being caused by the lack of information of a very rapidly moving situation. On a 2 year outlook this should be fine but I think it will take several months to get to any sort of calm.

Platinum down 18% is a bit of a wake up call. We also don't know whats happening to rhodium right now. BASF and JM are showing relatively stable prices but the rhodium ETF looks more like 25% down.

Basket now around 12.5% off the very high, bringing it closer to the January level. I have tested the impact of a declining basket by taking 10% off platinum, 15% off palladium and 20% from rhodium. That gives me a basket of $2,100/oz which is above February's basket. This result would give around $80m EBITDA on a current Mcap of $170m. Might need to do another test assuming rhodium in freefall which is an unpleasant but distinct possibility.

Panic returning as I type, basket is already moving lower

Hey Rivaldo, great to see indeed. I have been building a position here recently after selling out a couple of years ago. 2019 was good but 2020 should be great. Cash flow should really take off this year.

Tharisa has been on a gradual (sometimes sudden) downtrend since mid 2019, now down 50% in total from the top, moving in line with chrome prices and the production hiccup. Tharisa has never reacted to the PGM basket price, which is where the anomaly lies. You can count on one hand the number of days the SP has gone up this year. Even today with a broad market bounce and even broader resource stock recovery Tharisa fails to move.

My impression is, the tiny pool of sellers, apparently fixated on chrome, or their own risk management, are grinding down the price day by day in a highly illiquid market. I suppose the market will need proof of the cash flow before anyone gets too excited. But because there are so few shares on issue by then it will probably be too late. I see a swift bounce in May if prices remain at around today's levels, but it could continue to grind lower, and we may see another plunge or two depending on how desperate the sellers are.

Cant think of much else to say but we outperformed the rest of the SA major miners...-17% v Sibanye 22%, Impala -22%, Amplats -20% and PoG is only down a few % and above 1600.

If you don't know the answer to that question sands I truly envy you. Ignorance is bliss

Hedging per Edison...if PoG is greater than $1750/oz in H2 we get less than 25% of the upside

Pan African has two forms of relatively modest hedging contracts currently in place solely for the purposes of guaranteeing debt serviceability and covenant compliance. The first is a gold loan of 20,000oz that locks in a gold price of approximately ZAR633,347/kg (US$1,326/oz at current forex rates), representing approximately 10% of the group’s anticipated production for the 2020 financial year. The second is a series of zero cost collar contracts over 50,460oz gold in H220 that cap the
likely gold price received by Pan African at ZAR836,000/kg (c US$1,750/oz), but also floor it at
ZAR655,000/kg (c US$1,371/oz).

Given our current gold price expectations (see Exhibit 7), we do not expect the call options written at ZAR836,000/kg to be exercised in H220. However, we estimate that the gold loan will result in a notional loss of US$2.4m in H220, which we have included in ‘other income/(expenses)’ in our forecasts (NB Pan African reported ZAR29m, or US$2.0m, in realised hedging losses in H120).

Latest research note

https://www.edisongroup.com/wp-content/uploads/2020/03/Pan-African-Resources-H120-confirms-FY20-forecasts-.pdf

Hey Troajan, cheers for posting. I think that article sums it up pretty well. Who's going to invest in a chrome producer right now? And via a company like Tharisa which has <10% free float? With a current EV of 330m, based on current prices, this would be less than 2x EBITDA. This would allow THS to pay for its extensive 2020 capex program , finish the year with a net cash position and pay a pretty healthy dividend. No news until April though so might not do anything until then.

Liquidity. Throw out the baby with the water and all that. Also, while PAF earnings have not been impacted by the current sentiment, there has been a contraction in multiples across all markets.

Who knows really but you've got to be in it to win it

Looks like Coronation is holding us back...