Member Info for ragnarlothbrok

Our little Sylvania got a mention in today's Times as one of 2 listed London companies which produce palladium (along with Tharisa). The Tempus recommends avoiding gold but buying Pd!!

Unfortunately the article doesn't mention how to buy palladium, its recent parabolic price action (meaning it could correct at any time) and the high volatility which makes it unsuitable for most investors. But perhaps SLP and THS may get a little support today.

Hey Gavster,

Normally i would take a look at cash flow and re run my DCF to come up with a valuation and SP target but Im finding this quite difficult in the full results (per the link below)

https://senspdf.jse.co.za/documents/2020/jse/isse/pan/Int2019.pdf

The headline results are pretty straight forward but its a terribly confusing result once you start looking at cash flow. Have a look at Note 17 which explains why the net debt reduction was so low despite EBITDA of $44m.

The results include the following cash outflows: gold loan amortisation, decrease in environmental provision, profits from unrealised derivatives, fair value adjustments on rehabilitation funds, increase in working capital, settlement of share options and various financial instruments.

Basically I can't work out what recurring cash flow is so I can't make an accurate price target. Edison don't seem to have updated their paper from last year so their target of 24c, or 18p ish as good as any I guess.

https://www.edisongroup.com/company/pan-african-resources/1220/

barnaberible, shareminator, I took some off the table as well. No shame in taking some profits!

It's been a great ride over the last couple of weeks, a perfect storm with the parabolic PGM basket hitting just as production is peaking. Its definitely been my most enjoyable time in over 3 years of holding.

At the risk of incurring the wrath of the loyal shareholders, JLP just cant be compared to SLP, starting with the Chairman. Colin Bird has had one big winner but since then he's been a perennial failure in almost everything he's touched. The company lacks focus and I personally can't tell what is happening with all those assets and ways of reporting.

However, as they say, a rising tide floats all boats...

barnaberible

It's a good idea to skip on over to the JLP board where TBTT has been posting about that particular company recently.

We've all had a go at writing off JLP over the years on this board. But you should ask Visitor if you want some good straight talk, he's definitely the most eloquent.

Thanks for sharing that TBTT!

I don't recall ever seeing Terry doing anything like that in my time as a holder. I would say that, in general, SLP engagement with shareholders was extremely poor. I'm really liking this approach from the new CEO and I hope it means us small shareholders are going to receive a few more hints about future plans.

I see on page 25 they have completed a BFS on a 10Mw solar power plant at Evander. Ready to be funded, they kept that one quiet...

Those hedges are starting to look pretty painful

https://www.panafricanresources.com/wp-content/uploads/2020/02/PAN-AFRICAN-RESULTS-PRESENTATION-Dec-19-FINAL.pdf

Hey TBTT, yes indeed theft is on the rise. I think what we will see is a boom in devices such as catloc which prevent converter theft.

JMAT believes that Russia may have up to 1m ounces in their strategic fund in their Feb PGM outlook (page 21).

http://www.platinum.matthey.com/documents/new-item/pgm%20market%20reports/pgm_market_report_february_2020.pdf

We are witnessing commodity history here. The panic in Pd is really something. I was a little too young to care about the last rhodium bubble but this one has sure got my attention.

Are the Russians getting nervous? Will they release some of their strategic Pd reserve to stabilise a market in obvious distress...or do they even have a reserve?

Implats, Amplats, Sibanye and even Sylvania all caning it today!

It really depends on what you think prices will do. If you think they will stay at todays elevated levels or even rise higher, SLP is indeed grossly undervalued. Applying todays price deck and a hefty discount rate of 20% gives me a valuation of 90p in my model. And thats ex Volspruit. Prices like these make Volspruit look pretty juicy. If Pd can stay above a certain level for a while it could be worth $100m, or 20-30p, but who knows.

Book value around 43m so expected selling price of > 50m on an NPV of 428m

Hey TBTT,

I've read every single one of Liberum's notes over the last few years but I always wonder how much access they have to management. They overstated the dividend in their last note, even though cashflow was well over what they expected. No one just seems to understand management's intentions with this cash pile.

What I can't fault is their market analysis, which improves every time and is a superb summary of all the various content out there. And I think they have nailed the doubt around the price rally being sustainable as a reason for the discount to fair value.

Looking pretty bleak around here, sentiment at rock bottom!

Not sure what can get this out of the doldrums in the short term

Another disappointing cash cost performance with AISC at 1113. However Cobus is committing to guidance of below 1,000 for the full year, meaning AISC should be around 900/oz for H2. Combined with an additional 5,000 ounces and H2 average prices so far being 6.5% higher than H1, should see a much stronger second half.

Net debt didn't reduce very much but is a very manageable at around 1.5x 2020 EBITDA

The JSE listing is currently up 2% so no real surprises or disappointment from the results.

...for all those funds selling in the 30s only a couple of weeks ago now

The basket keeps creeping higher as well. Rhodium at $11,500 today. A ridiculous proportion of profit is now being generated by rhodium. And this in the face of huge declines in auto production. Cant imagine where it would be without the virus and lower Chinese car manufacturing...

Hi TBTT. I missed it as well!

I wonder which desperate soul was flogging them on the open today. Probably Majedie!!

Yes they are using a lower basket but still, its just not realistic that they are doing less than H1

Good results indeed, however the SP always drops on news, lets see how far this time

And they finally rejigged the presentation

https://www.sylvaniaplatinum.com/im/files/documents/20200217%20SLP%20HY1%20FY2020%20Investor%20Roadshow%20Presentation%20FINAL.pdf

- The CEO is stepping down
- There could be substantial value in the chrome/coal pelletisation project (first mention I've heard about coal)
- They are considering development of Volspruit (until now they all had always said they weren't developers of projects) and are stepping up the approvals process
- The EBITDA forecast of around 70m makes no sense. H1 was $36m, implying H2 of $34m. Yet costs are flat and the basket is $1000/oz higher so far in H2 than H1. Production will be lower but seems to be massively understated
- They are keen to keep the buyback going but at what value?

Looks like we will see a drop on the open, get your funds ready

Based on today's prices 56% of PGM 3E revenue from Rh, and 22% from each of Pd and Pt. The problem with Rh is how quickly it can fall but as JMAT explains perhaps it is more structural than the last time around.

Q3 basket so far on track to be +40% on Q2 and 2020 not far from double 2019. Its going to be a HUGE quarter... we could see well north of $21m free cash flow with low capex, no tax and a big negative working capital movement.

At current prices we may see +$100m in cash/net working capital on the balance sheet by June