Member Info for ragnarlothbrok

Nice one, welcome aboard.

Another nice little contract today, not material but important nonetheless in continuing to re-establish the relationship of trust with investors. And a domestically based business like this is a lower risk option while this trade war business carries on.

I see that over the last week there have been two broker updates: Peel Hunt continues to place PAF under review while Numis has reiterated its ‘Buy’. I can’t see a target price (they probably gave up: Numis price target has fallen from 30p, to 20p to 16p in May)

Over a long period of PoG rising to over $1350 PAF spent the entire time falling. POG now falling to $1200 and beyond and PAF decides to rise.

Volatility in this share has been remarkable over the last 2 weeks but there have been a few recent large bona fide ordinary buys (instead of the sub £1000 bot trades). Right now the spread is only 1% and SP seems to be settling above 8p.

Have we finally swung from the capitulation point where everyone who feels they need to sell right at the bottom is out? Is the market recognising the transition from a high cost marginal producer to one that is soon to be producing further down the cost curve in a low price environment?

Hey Lindon,

It looks like it was an exciting morning here with trading getting up to the 120s. I suspect the delayed trade at 12.30 was a buy which pushed the price up over the morning. Looks like the spike caused some further buying interest. I'm banking on this creeping back up to the 130s pre accounting error level given there has been some good news since then with the positive AGM statement, director buys and the LA expansion

generally positive. Disposals will mean lower EPS but offset by accelerated debt reduction leading to improved 2018 net debt/EBITDA of less than 1.5x. According to Jefferies parking eye was acquired in 2013 for an EV/EBITDA of 7x but was sold on over 16x. I smell a dividend in 2019

Starting to hack a pathway through the outsourcing wreckage. Performing much better than Mitie, Interserve, Serco etc but still a long way to go.

Everything seems to be on track

Q418 report is due at the end of this month, probably July 31.

Good to see Pt bouncing back a little but the long term downwards trend is still intact. No one knows exactly how much inventory there is so the price has always been the domain of speculators. Rhodium hasn't budged for weeks now and represents 25% of SLPs revenue stream.

Hey Mulder, I believe the number of shares is 2,214m. You can work it out if you look at the recent announcements. And volatility in the SA listed shares probably has something to do with the volatility/weakness in the rand. The lack of liquidity and large spread no doubt contributes to the lack of parity between sterling and rand denominated shares.

I guess that means that when opportunities to grow production and earnings dry up the company will resemble a securitised stream of future gas sales. Especially given the relative reliability of earnings and quarterly dividends from lack of exposure to commodity prices.

With a number of acquisitions completed they have established acceptable market valuation parameters for reserves which will immediately enhance EPS/DPS. I wonder what the potential size of the market here is? I would love to see their list of potential acquisitions, they could be bolting on further for deals for years to come if the supply is there.

The release of that note coincided with a definite uptick in the share price, its a shame they were $5m off the cash balance and probably $10m off the future minimum cash balance. Unfortunately the company's external relations and investor engagement is pretty poor, (I hope they aren't still paying those consultants) so I guess a lot of investors will rely on that broker report.

For now there is some desperate selling going on but I agree July should see a reaction. If management deliver on production guidance they will be hitting 7koz/mth in Q4 which will break some records and deliver a significant increase in EBITDA from Q3. That amount of production (and coming from higher quality feed) with the improved recoveries from Echo should drive a huge reduction in costs. Hopefully we get some production guidance for 2019 around 78koz. That would get people's attention.

You may get the chance to top up closer to the raising price shareaction. After the initial spike the SP tends to gravitate towards the placing price as the lucky buyers take their profits and run. Looks to be a high volume day as they bank their 20%+ gains and move on. Hopefully we find support soon rather than drifting down all day.

They had the vision but I think the speed and scale with which they executed has surprised everyone.

I'm still trying to get my head around what sort of play this exactly. With such a high proportion of revenue which is hedged there is limited exposure to gas prices. Growth is driven by the ability of management to generate enhanced production from existing assets or extract productivity improvements to lower unit costs. This will be a real test of that ability but the market likes it so far. I'm looking forward to the earnings upgrades!

Its a shame PIs couldn't participate but why would a company care what the tiny base of PIs think?

The whole industry is designed to benefit those who built it. We must be content to feed on the scraps, in this case a 30% rise in the SP. Ah well can't complain too much.

Cash is definitely held in ZAR. This allows them to earn 7% interest in South African bank accounts.

Believe it or not but the spot USD PGM basket is only 10% off the 3 year high. And the ZAR basket is still over 14,000 and only about 400 rand off its 3 year high. The basket and the rand are almost a perfect hedge. I think most of the SA miners will be making money at these levels but no doubt will be experiencing some working capital contraints.

I think the SP still represents good value on many levels - tangible net asset per share is 14.5p (excluding exploration properties), they have cash and liquid assets of $25-30m, nearly 50% of their market cap. I would consider this surplus as they can fund Echo 3,4 and 5 out of future cash flows quite comfortably. Paying a dividend of £5m per annum would give a yield of over 10% and would be covered by cash flow more than 2x even in a downside price scenario.

But as ever there risks and you will need to hold your nerve and think about your horizon. There is no doubt that there has been significant background selling recently which may continue and push the price lower in the short term. And there is a real liquidity issue in small caps at the moment so prices will get more volatile, no doubt about it. GLA

Hi Visitor, I don't understand where they got their numbers from either. The report was issued in February and the cash balance at December was $12.6m. I would say that if current form continues the cash balance is unlikely to dip below $15m. I agree with their $18m capex figure 2019-2022, which is only a fraction of the $20-25m EBITDA they will produce per year. The level of $8m stated by the board as the minimum net cash balance before they would consider paying a dividend is gibberish - its the same as the dividend policy which was announced around 2012/3 if I recall correctly.

You can read the note yourself with a one-week free trial to Research Tree. Check out their long term PGM price forecast, its outrageously bullish!

Wouldn't bother Mulder, its one of those generic simply wally street reports.

Looks like I've been missing all the action, it looked like it would breach 8p but now its below 7.

Red warning signs are flashing harder about doing business in SA, rand suddenly back to 13.9. a 7 month low. Around 14.55 is the 18 month low, not so far off from that

And with a placing price slightly higher than the last trade it bodes well for the open on Friday, might try and get a few more if I can get them for under for 100p, but I doubt it

Some comments from Liberum's Feb note about dividends:

The combination of Project Echo and the Lesedi acquisition have added c.$18m of capex over the next four years. This means that cash balances on our estimates are unlikely to recover past the $8m (the level stated by the board at which it will pay a dividend) until FY19...we would not bank on the introduction of dividends at the FY19 full year results as there are further investment opportunities at both existing operations and other assets. However, if these opportunities do not meet the required criteria, then Sylvania Platinum has the ability to be a very high yielding stock of c.10-12% from FY20.

That's the biggest risk for me here Leas. Industrial action coupled with supply curtailments. I have no idea about Samancor's financial position but ferrochrome has recovered 50% since the dark days of 2016 so if they can get through that they should be ok. We saw what happened in January when fresh feedstock was limited, hopefully that was an isolated incident. I bought a few more this morning, last chance at sub 17, feels like selling pressure has eased over the last couple of days. At 17 and at this price combination I put this on a 2019 P/E of 4.8x and EV/EBITDA of 3x (2020 even lower) but with very strong cash conversion which will support a healthy payout ratio.