focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Thanks Mike, this is quite interesting https://cleantechnica.com/2023/03/09/the-global-ice-industry-cliff-is-here/
Of course it may be quite wrong but it suggests ICE world sales near halving between 2017 and 2026 with that fall accelerating now. However as long as chrome prices stay up we can watch as rivals are forced to close hopefully reducing world production. The fly in the ointment remains Karo just now. Anyway we shall see. Finally , and also of course, this is a Tharisa board but these macro moves it seems to me are what are most affecting the share price now and will continue to do so as seem secular.
Freedom forUall. I think worry is not 2023 that will be great but 2024. Share price is anticipating PGM losses then though as wisely pointed out in the longer term mines will close (a lot to reduce supply to meet reduced demand, and platinum and palladium prices will have to rise as rh tumbles for at least some mines to make money) and we will hopefully be left standing particularly as loss making PGM’s will just become an extra cost in chromium production. The great thing is profits can fall 5 fold and leave us on a reasonable PE at this kind of share price, (unless price falls 5 fold to keep the crazy low PE).
Mike you say you are tolerant with one hand and then “ what I do not like is that you are not willing to accept facts and throw out incorrect information without justification. “
This is from today’s FT, many on other boards consider it just another provider of fake news, tarnished by Bannon and Trump successful propaganda)while their conspiracy theories are their truth, however I would hope the bright and knowledgable people here might in part think there is maybe just something in this from todays FT that might influence THS profit and share price however annoying to you:
“Manufacturing activity has contracted in China for the third consecutive month, adding to pressure on Beijing’s policymakers to tackle a slowdown across the world’s second-largest economy. The country’s vast property sector, which accounts for more than a quarter of activity, is in a prolonged slowdown, while youth unemployment has surpassed 20 per cent and trade is falling against a weaker global economic backdrop. Exports shrank 7.5 per cent year on year in May.”
Also in today’s FT full electric vehicles (BEV] now make up 24% (!!) of Chinese sales and rising fast. Imagine PGM world production stays constant or even falls a bit but demand particularly of rh takes a tumble - China is after all now the world’s biggest vehicle market and others are following suit.
Now rather than just explaining the minutiae of THS output and costs (albeit very useful and much appreciated, thanks) do say more about what you think about the macro position which to my mind matters as much or more, and the above FT info effects on THS selling prices and why you think I am so wrong, and many think I am an unjustified pessimist who should be blocked. Let’s have an intelligent discussion even debate about where different people see this share price going, of whom some have been more right than others, even if annoyingly so, over the last year or two. Should the FT be blocked as well for telling an uncomfortable truth. Thanks all for brilliant insights and thoughts as I really appreciate all thoughts and contributions as they make me think.
Thanks Mike, I just wish the share price would agree with you!
Rh is down another 20% in just a week
With mining inflation and the further falls even since Monday, PGM break even is very close if not here.
Chromium as said is a brilliant saviour but already down 10% and with Chinese slowdown and potential world recession, likely in my view to continue its descent. The first quarter was great in China but the economy has been slowing and looks to be poised to fall further especially as property buckles.
The problem is if both continue to fall PGM losses will mount and chromium profits reduce. All at a time of heavy borrowing and investment.
Hence our share price. If things pan out as I expect in 2024 it won’t be great for THS, with Karo losses coming into play too.
As a matter of interest why do you think the share price is so low if 2024 profits are likely to hold up? And thanks for your tolerance!
Mike, such a shame when others were so intolerant and rude or even blocked me for suggesting that we’d get to where we are today and worse, so saying share price looks forward. Therefor all the detailed predicting for 2024 and a super low pE and great profits was a bit of a pointless excercise without taking proper account of the most important metric that had been falling two for years, the price we sell PGM for . This fall has been accelerating, now we are already in the realm of losses on PGM at basket around $1400 on Tharisa and $1300 on Karo. And still falling fast especially with China slowdown and more secular huge China ev switch. The worse thing is chromium is falling too, despite the insults to me on mentioning the Chromium99 price on investing.com, that is actually a proxy for the direstion and chromium is continuing to fall, though still making hefty profits but falling . But the biggest problem here is we are hitting big debt for Karo just as we head into making losses. Presumably if this continues Karo will have to be paused and our dividend cut as I have every confidence in the management making it through this (note reread this post. in 2 years). And sorry to caro on but just so annoying that this, which used to be such an intelligent and informed board, has become another that only allows rampers or at least those who say profits and share price shoudl rise while they steadily fall. Of course I would like nothing more than this reversing but it is hard fighting a two year secular trend
No rns yet but presumably one this morning as at end of previous quarters, for instance this from 6Dec 30 last year: “ Hochschild Mining PLC ("Hochschild" or the "Company") (LSE: HOC) (OTCQX: HCHDF) confirms that the permitting process for Inmaculada's Modified Environment Assessment remains ongoing and that the Company's current expectation is a decision by the Peruvian government in the first quarter of 2023.” Hopefully the same and not worse.
Presumably we should get an rns this morning as end previous quarters like this from 6 months ago today: “Hochschild Mining PLC ("Hochschild" or the "Company") (LSE: HOC) (OTCQX: HCHDF) confirms that the permitting process for Inmaculada's Modified Environment Assessment remains ongoing and that the Company's current expectation is a decision by the Peruvian government in the first quarter of 2023.” Apart from change first to third, unless worse
Great opposition from the locals, esp as the area had a lot of Maoist revolutionaries
Tornado, I think the the market looks forward and it is concerned/ factoring in that if gold keeps falling and costs keep rising that H2 profits may be considerably lower that H1 which ends tomorrow and should be pretty good when revealed in a month.
It will be quite negative as investing a v large amount in Maria Rosa to make up for some of the lost oz in Peru
Cowichan, thanks as ever for your research and views, the great thing about this board is the breadth of opinions and the tolerance. The wonderful Siko has posted while not owning any so please ignore the few insults and keep posting; I might disagree with you sometimes but greatly appreciate the freedom to do so.
Still nothing on Inmaculada and only two days of quarter to go, will it be like previous quarters when we learn o last day of quarter it is postponed again with no reason why negotiation is so impossible or what the environment dept is demanding that cannot be given? And Stanley, Peru has a far higher growth rate than UK and mining is a very small part of that “Peru is one of the fastest growing economies in Latin America. The services sector is the most important and accounts for 60 percent of GDP. percent) Manufacturing creates 16 percent of the wealth and construction and water, gas and electricity distribution 10 percent. The agriculture and fishing sector fuels 9 percent of the GDP and the mining sector accounts for the remaining 5 percent. So the mines with environmental permit problems are a fraction of one per cent. That is why the environment understandably matters more to them
Oracle still no news on permit extension which is ominous, and in answer to your question here is a bit of context. Environmental concerns can be even greater in less populated and more natural areas form the Andes to the Amazon. : Ayacucho, ‘lies in a fertile valley on the eastern slopes of the Andes’ 9,000 feet above sea level and has a ‘pleasant and invigorating climate’. Water of course flows down. “ Ayacucho province was one of the hardest hit in the 1980s during the guerrilla war waged by Shining Path known as the internal conflict in Peru. Two thirds are native Quechua who are very worried about their land. They are asking Hoc to modify their environmental impact to expand their mine," Asuncion Margarita Gutierrez, a district leader in Ayacucho's Paucar del Sara Sara province, where Hochschild's mines are located, told Reuters by telephone.
"But there is no deal here, our lives comes first," she said, repeating accusations that the mines polluted local water sources. Under Peruvian law, all mines have a planned closure date, which can be modified if more resources are found and if regulators allow it. The four mines in questions have closure dates ranging from 2022 to 2025.
Che Bernaola, representative of the Ayacucho Sur committee, said he expected the government to ratify the gradual closure of the mines.
"The only thing we can discuss at the table is how much reasonable time they need to shut them down, there is nothing else," Bernaola said by phone.
Peru's Environmental Assessment and Enforcement Agency (OEFA) has carried out 82 supervision tasks at the four mines between 2013 and 2021, government data show. It has identified breaches that have led to minor fines.
Julio Guillermo Gutierrez, president of a group in nearby Parinacochas, said the mines had to shut, but acknowledged the government might say the closures would "take a little longer."
"We reaffirm our purpose to stick with the process of closing the mines, within the legal framework," he told Reuters.
"For many years we have been tolerant, reasonable in our complaints, and now it is in the hands of the Executive; the state has to understand that we are also Peruvians
Slater it is the environment dept which thinks it is is acting in the interest of the country. The environment is a bit of amcatastrophe in S America as miners have been allowed to pollute water systems and logger chop England sizes of forest. The environment dept is finally trying to row back and in an extended tussle with Hoc on what they will accept. Yes they want the tax and employment but they are advanced enough to now keep some of what is left of their country
Just one week to go till end of quarter and promised Inmaculada news if we ever get it, or will we just close down? Scary, I have looked for the promised rns every morn since last year! Let’s hope the company is run better than the commas which shouldn’t keep promising what ain’t delivered tho maybe better not to know
Moneyman and Mike thanks for your kind and thoughtful replies, I have no doubt 2023 will be great as you point out, with such good numbers baked in. It is next year that worries me if PGM and chrome continue their decline in face of a bigger than expected recession especially in China, leading to a far higher pE or lower share price; markets look forward. I hold because great management and low prices reduce new mining and then old, but that takes a few years to come through, I have a very long horizon. Thanks again as so many get cross if I post economic reality as many on these boards only want one side of the story, that rarely fully explains the share price or short term trajectory