The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Just watching the PGM prices it's possible this is not the bottom, if a recession hits perhaps the p/e might fall to 3 so in the sixties seems reasonable then patience with leeway to average down.
However even at low PGM prices slp is still making money you can't ask more than that in todays environment were reducing losses is seen as good form.
Sorry Bangrak I don't agree, by my workings at current PGM prices and 72k production I have profit of about £27m earnings 10p a p/e of 4 gives about 40p share price plus cash balance of roughly 37p so at today's lowly PGM prices 77p seems reasonable.
I don't hold at moment but I am watching how far this falls, all the forecasts for PGMs are higher than current prices and with car production increasing from the lows of the chip shortage and pandemic something doesn't add up.
Huge stockpiles by the car manufacturers to work through maybe, increase in supply from somewhere Russia maybe, forecast recession in the West depressing prices maybe.
At these prices only the low cost producers with a hefty cash balance are feeling comfortable.
Why does reading the RNS seem like window dressing?
Bringing in a couple of new neds is hardly breaking news neither is our largest shareholder wanting a seat on the board which to me is the most significant.
Oh and that last statement about being more upfront with shareholders informing us of news, truth be told that is were trust has been lost.
Plus to my cynical mind it was done by design keeping stum and not informing shareholders of what's going on, noway was it an oversight, hence the our new investor relations officer who has form on that front.
Anyway the Odey situation had made a bad situation worse hopefully in twelve months time we will be looking back and thinking what an opportunity that was when Odey was selling out.
Changing times in Nigeria with the abolition of the fuel subsidy will imo put pressure on the new president to deliver on his promises of better infrastructure education healthcare etc, his measures have for now made ordinary people worse off, I hope he has the full backing of the population otherwise he could be in for a rough time.
https://www.france24.com/en/africa/20230614-a-necessary-sacrifice-nigeria-ends-almost-50-years-of-fuel-subsidies
Interesting view of the Saudi oil cuts why they are doing it and the economic effects.
https://youtu.be/5pDSoHslVFo
It's surprising how things work out and why, some time back Phil Corbett was appointed as investor relations officer, and with that posts from investors from his previous job at Hurricane Energy which were damning about his character I remember pondering why JSE would go for such a chap.
He his very good at bending the truth withholding information and some accusations of outright lying so the accusations went.
What I know now he is good bloke as far as the company is concerned when the sh*t hits the fan, I wish I had heeded my gut instincts at that point.
Knee jerk reaction is that placing business is going to be fine for the large investors with their cheap warrants.
How things change in twelve months debt free, buy backs to this, some things have been out of management's hands but others things haven't I think they have played us small investors like a fiddle by not giving us any information of what was likely or intended with the revenue lost from Montara.
It may all end well but from here I am hugely dissatisfied with information coming from JSE management of late.
Good to see that both parties are still aligned in wanting the deal to complete, with no rifts apparent between either.
So it's down to the authorities to give the go ahead, having seen a protracted agreement between two parties drag on and in one of my other investments which eventually failed to materialise due to the government concerned dragging it's feet means you can't rely on anything until the official go ahead is given.
Hoping this deal does materialise with the meddlers being disappointed after doing all they could to scupper the deal.
Some interesting points of view today and excellent posts, I am sat browsing the paper and although comparing apples with oranges the financial side of things is not.
Easy jet lauded for reducing losses from £431m to £307m BT increasing net debt to about £15b from memory the other day cutting 10k jobs , Royal Mail £1b loss and the list could go on and on of companies saddled with huge debt.
These are all huge enterprises but one thing they all have in common is losing money.
We have here a superb company albeit with a rather low mcap with two products, when PGM prices were high chrome was low and now PGMs are not doing as well Chrome is high, and both are profitable, note the increase cash today, the two work well together providing financial stability in difficult times.
Ths has tweeted today about the looming Pt deficit so that is one of PGMs that I expect to reach new highs in the near future.
PGM Market Report reviews and forecasts demand and supply developments in the PGM markets, and is published annually in May. It gives an insight into each of the platinum, palladium, rhodium, ruthenium and iridium markets, and many include special feature articles.
The annual report is now available to download from Johnson Mattheys web site loaded with all the usual data, info and forecasts worth reading.
Another interview with Mark, a little more information regarding gold sales outside of Zim, Bilboes in this interview expected the oxides to produce about 50k ozs over its life, which it probably won't now due to lower than expected grades however he does reiterate the material has to be moved anyway to get to the sulphides and sulphides were the reason for buying Bilboes.
At Blanket details cost increases due increased electricity prices which they now have a new supplier and the rectification of winding failures and chute blockages.
https://youtube.com/watch?v=AFhwvtsKFuU&feature=share
Hi Sotolo,
Not so fast on the electrification front sales dived across the board when subsidies were cut in January in both Europe and China.
The IC article from March gives more details
https://www.investorschronicle.co.uk/news/2023/03/07/who-will-survive-the-ev-sales-crash/#:~:text=Global%20EV%20sales%20in%20January,government%20came%20to%20an%20end.
Thanks for that Freedom not sure why it posted as it did, your version is a hell of lot easier to read.
Interesting comment from MF Weekly with their view of the pgm market pt,rh and pd all being in deficit but prices dropping except for pt.
Regardless of their opinion if the metals are in deficit I would expect some stability rather than volatility.
Deficits for all three metals in 2023
Metals Focus expects platinum to record a far steeper deficit in
2023, which will be its deepest in our series. Palladium’s deficit is also
forecast to widen, while rhodium will end two years of surplus. For all
three metals, this reflects improving automotive demand, as supply
chain frictions ease. A lack of supply-side growth is another key
factor. Mine supply in both South Africa and Russia will face their own
respective challenges, while recycling will remain under pressure.
“In spite of these deficits, investors and market participants are acutely
aware of the longer term headwinds that automotive offtake is bound
to face as a result of electrification, especially for palladium and
rhodium” commented Wilma Swarts, Metals Focus’ Director of PGMs.
“Additionally, many OEMs are still overstocked or partially hedged.“
Demand gains and investor interest support platinum prices
Metals Focus expects the Fed to hold interest rates steady for the rest
of 2023. This, in turn, means that key driver of recent rallies in precious
metals prices during 2023-to-date are likely to dissipate in the months
to come. “We see strong price support stemming from platinum’s
deepening deficit and solid long-term fundamentals. However,
platinum’s closer link to gold will limit its upside, once that metal comes
under pressure as markets come to accept the lack of rate cuts“ noted
Wilma. “For these reasons, we forecast a 7% rise in the annual average
price to $1,030 for platinum.”
Even with a deeper deficit in 2023, Metals Focus cautions that
palladium’s price weakness will persist. “Palladium’s weaker long-term
demand outlook, owing to substitution and electrification, will weigh on
investor confidence,“ Wilma commented. “We expect the average price
to drop by 28% to a five-year low of $1,520 in 2023.” “Like palladium,
rhodium supply-demand outlook concerns will impact its price.” Wilma
added, “In addition, high stocks held by automakers and selling by
glass manufacturers will undermine rhodium offtake. This leads us to
forecast an annual average of $9,000, down 42% year-on-year.”
As per the interview below the production oz's at Bilboes was below expected however in total the oxides there was only expected to produce 30k Oz over a three year period, it will now be aimed to be run at break even which allows the company to continue to employ 150 workers it has there for the more important sulphide project.
So we have the financial implications confirmed for the previously mentioned interruptions at Blanket, which as stated have been rectified putting production and costs back on track as far Blanket is concerned.
What's interesting is the guidance for consolidated aisc have been revised and now do not include Bilboes is stated as $935-$1035.
This leaves questions regarding costs for Bilboes which at present we will just have to wait and see.
Good that the solar plant is up running and contributing, and the gold price is still holding above $2000.
On recent basket prices a couple of weeks or so ago my working including cash and a p/e of around 4.5 came out at 85p, so I decided to sell my last holdings here. Great company watching if the sp falls significantly or PGMs move back up, the market is close to fair value on current PGM prices imo I could be wrong though, good luck to all invested.