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Completion of a placing raising £8.5m for the evaluation of ilmenite mining at Pituffik in Greenland through the placing of 76,428,572 new shares at 7p and the placing of 45,000,000 existing shares also at 7p. Gross proceeds to the company are £5.35m with a further £3.15m raised to buy FinnAust stock from Western Areas the Australian nickel producer. Western Areas’ stock holding is now 22.85% and remains a supportive shareholder. The placing was significantly oversubscribed demonstrating an increased level of interest in the market for FinnAust and it’s ilmenite project in Greenland. The plan is to deliver a proof-of-concept bulk sample from the Pituffik ilmenite project in 2017 and to deliver a cash flow and dividend paying business with a long-term life span. A new JORC resource is being prepared for publication in Q1 2017 to be followed by completion of feasibility study work in June next year Bulk sampling and sample preparation should enable the testing of concentrate samples next year which may lead to offers to offtake Pituffik material from consumers and traders. FinnAust also has a number of drill ready zinc targets for 2017 with further targets to drill in 2018. The team are also keen to continue to acquire further low cost, high quality assets and to maximise value from their licenses in Finland. Profound climate change has stripped away ice and snow from Greenland through the summer allowing easier access to many metalliferous targets. Pituffik; is a unique mineral sands deposit in the Moriusaq Bay area and Interlak Delta in Greenland. Moriusq Bay shows very high ilmenite grades of around 50% to-date on Active beaches and at up to 90% ilmenite. Drowned beaches at Moriusaq Bay are expected to carry very high grade ilmenite. The Interlak Delta shows +/- 15% ilmenite which is still relatively high grade for an ilmenite resource. FinnAust acquired the Pituffik project through the issue of shares to the vendors of Bluejay Mining. The company also completed the acquisition of Bluejay Mining on the 8th December through the issuance of the deferred consideration of 40,755,885 new shares. Rod McIllree and Greg Kuenzel, directors of FinnAust were among the vendors of Bluejay. Rod McIllree now holds 9.34% and Greg Kuenzel holds 3.78%.

“It has become more than annoying, my business is suffering,” says an engine oil salesman in Addis Ababa, who asked not to be named because of his criticisms of the government. “I like to do a lot of sales on the move, but it’s now very inconvenient. Does the government realise the effect of what it’s doing?” The country’s growing tourism industry has also been hit, with tour operators reporting lost earnings of $7m in the weeks after the state of emergency was imposed in October. Western governments have lifted travel advisories for most of the country but people in the hospitality industry predict it will take time for visitors to return. “We have some foreign tourists staying but far fewer than usual,” says the manager at an Addis Ababa hotel who asked not to be named. “And there are practically no western business travellers. The Chinese are still coming though.” Roger Lee, chief executive of TAL, a Hong Kong-based company which produces clothes for brands such as Banana Republic, says despite the unrest, he would not be reversing the decision to open a factory in Hawassa, 275km south of Addis Ababa. “It’s not the first time it’s happened in a country we work in,” he says, adding: “It’s very hard to find a developing country with no issues.” The Ethiopian economy is still growing strongly — by 8 per cent this financial year according to official data. Although three percentage points lower than previously forecast it has come against the backdrop of a bad drought. The International Monetary Fund also predicts continued robust growth, driven by an industrial base that is set to expand as more infrastructure and low-cost manufacturing, much of it financed by China, come on stream. But there are also myriad worrying signs. The IMF warned in October that Ethiopia’s current account deficit, the amount by which imports exceed exports, “is not sustainable” at more than 10 per cent of gross domestic product for a second successive year. The resulting pressure on foreign exchange availability is adding to investors’ concerns. David Cowan, Citi’s chief Africa economist, believes the reality is worse and questions an IMF prediction that foreign direct investment will be $4.45bn in 2016-17, nearly $1bn more than its previous estimate. “I don’t see where the increase in FDI is going to come from,” he says. “I don’t see it from the multinationals, many of which are in a consolidating mode.” Many are also pessimistic about how the country can create enough jobs when non-Ethiopians continue to be banned from investing in the banking, telecom and retail sectors. “Successful economies have deep and diverse private sectors and Ethiopia’s just isn’t there,” said one investor, who asked not to be named. “It’s doing so

Crackdown on protests threatens Ethiopia’s economic boom Companies halt expansion amid fears state is not addressing protesters’ grievances https://www.ft.com/content/f86aec8a-be01-11e6-8b45-b8b81dd5d080 The construction cranes towering above the building sites on Ras Abebe Aragay Street in central Addis Ababa are tangible evidence of Ethiopia’s lofty ambitions to transform its capital into a modern hub. In two years’ time this should become a boulevard of gleaming skyscrapers, home to leading banks and others attracted by Ethiopia’s state-led development model. And with sub-Saharan Africa’s only electric light rail network outside South Africa passing nearby, Addis Ababa will be able to project a much more developed image than any of its regional rivals. Foreign investors, notably from China, have this year ploughed $2.5bn into an economy that has experienced double-digit annual growth over most of the past decade. But behind the façade, cracks are appearing in the model that helped Ethiopia become one of Africa’s star economic performers. The consequence for the authoritarian government, which derives much of its legitimacy since taking power 25 years ago from delivering development in the absence of many basic freedoms, is unprecedented uncertainty, analysts say. Ethiopia is in the third month of a state of emergency imposed to quell demonstrations against the regime, with hundreds of people killed in a brutal crackdown on protests that began more than a year ago. Foreign-owned businesses, particularly in textiles and flower farming, have been targeted in attacks that have caused tens of millions of dollars of damage. A few companies have left while others have put expansion plans on hold. Government promises of compensation for the damage have been extremely slow to materialise, adding to investors’ wariness. Diplomats warn that the government, dominated by the Tigray ethnic group which comprise just 6 per cent of the population, is not addressing the protesters’ underlying grievances of inequitable growth, lack of democracy and perceived rampant nepotism. “By sacrificing rule-of-law and predictability to achieve short-term stability, the Ethiopian government has damaged its reputation by reinforcing the perception that it is more authoritarian than democratic,” said a western diplomat who engages with foreign companies. For visitors to Addis Ababa, the most noticeable impact of the crackdown is the complete lack of mobile internet and severe disruption to online services. Deloitte, the global advisory firm, has estimated the shutdown is costing the economy $500,000 a day.

This month our basket price has come in almost exactly the same as October at $852oz For the quarter I make it $859/oz although today is the last trading day and anything could happen. Rhodium basket price is delayed a couple of days so won't know until next week for sure.

Fair enough, gold is bouncing now so I hope this does come good for holders. I would just ask again if anyone can explain why cash generated last quarter was so low given AISC reported. If you recall further down this thread I said "AISC do not tell the full picture as cash burn / increases give a better indication of the cost involved in running this company.... this company generates decent cash from operations but it gets chewed up so quickly! They made $4.8m cash from operations last quarter and cash only increased by $0.7m!" This was when the average gold price received was $1324/oz, so why such a paltry amount when net cash generating margins should have been at their highest this year? Compare that to SLP over the same period which turned $5.6m from operations and a cash increase of $4.4m in the same period. This is why SLP are the preferred choice when margins are being squeezed lower. They just don't have the costly overheads OMI seem to throw cash at. On the point of depleting resources, this has been the case with SLP although I don't know about OMI. However I recommend you check out Project Echo in the company's recent presentation. They are to invest $12 million in this next stage of development using cashflow set across 4 years to sustain production at current levels for a further 10-15 years. Operating costs are set to fall as a result. Further details will be announce in the coming quarters as ramp up begins in May next year. It is not yet apparent to investors if this will be kept in budget, on time or even pan out as expected and so the market has yet to price this in. But it's only a matter of time.

I'm inclined to agree but to what extent oil prices affect the balance of demand I don't know either. Any articles about the effects it has would be interesting to read. What I can say however is gasoline fed vehicle growth is projected to be stronger given lack of alternative options in emerging markets. In 2015 autocatalyst demand for platinum rose 6% as Euro 6b legislation was phased in and global diesel car output hit record highs, almost entirely due to growth in the light duty diesel (LDD) sector. There's an interesting piece on this worth reading but will save for another post. According to Johnson Mathey an estimated "98% of diesel cars built in 2015 carried at least one platinum-containing catalyst brick" and output surpassed the previous record set in 2011 by more than half a million vehicles. Europe accounts for two-thirds of global car production in the LDD market, Diesel's share is around 48% of this. Diesel car output grew by 11% in Japan last year. One major manufacturer introduced a range of diesel-powered compact cars for the domestic market, competing primarily against gasoline hybrids. Diesel production was up in North America also with sales of diesel-powered light trucks outweighing a fall in diesel car sales. Now here's an interesting fact. Since 2007 there has been an increase of around 40% in world light duty gasoline vehicle output and yet platinum usage in this segment has more than halved. That's because most car makers use palladium-rich technology in gasoline emissions catalysis, but there is still some use of platinum by Japanese auto companies and in lean-burn gasoline vehicles in Europe. Palladium being the cheaper sister metal traded much much lower throughout 2015 which has not been the case this year. Now the price difference has reduced considerably with Palladium demand rising strongly and anticipated to continue this trend into 2017 it should act as underlying support for Platinum which should maintain a price premium.

Looking back a little further the Chinese government previously cut the vehicle-purchase tax to 5% from 10% between 20 January 2009 and 31 December 2009. It later extended the tax-relief period to the end of 2010, but raised the rate to 7.5% exactly as we are seeing now. The 2009 tax cut stimulated year-over-year auto sales growth to 45.5% in 2009 and to 32.5% in 2010 from 6.6% in 2008, according to the China Association of Automobile Manufacturers. The markets reaction to the news suggests little short term impact, given buyers of palladium pushed prices to year highs only 2-3 weeks prior to this decision when it was expected the tax break would expire and auto-catalyst demand would subside in 2017. The market is instead being pulled higher and recently sold lower by greater forces and I’m of the view that short-term tax decisions bear little consequence to the trading price of purchasers who demand physical palladium. Norilsk are buying back palladium at spot prices to ensure long term stable supply to its customers and the transparency surrounding this development will no doubt be feeding into other investor rationale. I would like to highlight segments of recent PGM market analysis released by Heraeus to close. Ongoing Dollar strength, the weakening Gold price, weak Chinese demand in the jewellery sector and a currently sluggish demand from the automobile sector, especially for diesel engines are the main reasons for current platinum weakness. Interesting to note the Platinum-Palladium spread fell to a level not seen since April 2002. A further convergence of the prices could therefore not be entirely unreasonable given stronger growth for gasoline engines in the coming year and the spot price is trading below major platinum producer costs. Last point worth considering “the Nymex short positions reached the highest level since February 2016, just under 1.28 million ounces.” How many more shorts will pile in now that Platinum are trading off 9 month lows? Regarding Palladium’s recent surge to levels not seen since Autumn 2015 it should be noted that the news about restricted liquidity in bullion “is probably the main driver”. Rhodium is currently having its best quarter and according to the analysis even at current prices there is “a lot of buying interest” thanks to strong demand from the chemical and automotive industries. Iridium continues to trade at a high level also, with relatively small quantities traded at a very high level. Over the medium term liquidity issues “would indicate a further price rise”. links to source articles provided below http://shareminator.blogspot.co.uk/

Precious Metals Outlook – analysis and discussion It’s no secret palladium has performed poorly in the lead up to Christmas. Since it peaked at $776/oz on 1st December, (60% up over 11 months) support has fallen away rapidly with the metal trading down at $654/oz. Platinum has by comparison enjoyed a relatively stable month having already fallen in the weeks earlier. The reasons behind this correction are at this point difficult to determine given lack of information but I doubt Nymex contracts demand for March delivery suddenly collapsed. More likely palladium prices are correcting their October-December rally, a move overdue given that other precious metals have been trending lower. Around the 21st December an article titled ‘Chinese tax breaks do nothing for palladium price’ was published. This is the news that China has decided to extend tax breaks on the purchase of small vehicles into 2017. The Chinese tax rate on such purchases has been 5% since October 2015 and will be lifted to 7.5%, offering incentive as it remains below the usual 10% rate. Buyers pay the vehicle-purchase tax, which is applied to vehicle prices before the 17% value-added tax. Many analysts were predicting the tax break would be left to expire at the end of the year and consequentially demand for small vehicles would be impacted. Approximately 75% of palladium demand comes from the auto-catalyst sector, specifically in gasoline engines and the two largest markets are the Chinese and US given diesel’s lack of market presence. Platinum loads are higher in diesel engines, but on a proportional basis demand from the auto industry is roughly 40% with jewellery responsible for the bulk of the remainder. So this move should be a positive signal for palladium in the short term as it will continue to encourage price-sensitive buyers of gasoline fed vehicles. Moody’s Investor Service suggests the extension “should keep vehicle-purchase prices in the world number one auto market chugging along”. The ratings agency believes owing to the tax-break extension, auto sales growth in 2017 could be higher than its previous expectation of 2.7%, which reflected the expiration of the tax break, although growth in 2017 will be slower given the reduced tax break and "potential pull forward of demand to 2016 from 2017 because of the expectation that the tax break would expire." While the US market has seen strong growth in recent years, China's car industry recorded a 18% jump in sales in June and may have grown by double digits during 2016 to more than 23 million vehicles.

jollyspeculator - I did forsee it going lower earlier in the year from the 100p range and called that correct to the lows 80s. But I didn't buy in ahead of news for the same fears threeputt mentioned. South Korea makes up the largest share of TON profits and so I was expecting that to be down. The company reported it was little changed year-on-year however much to the surprise of the markets which had taken this lower. I was clear about waiting for guidance and as it turns out the stock bounced on the day that was released, unfortunately wasn't able to buy on the news. Win some lose some but no hard feelings. My strategy was almost right which is what matters to me. Perhaps in future I need to be more risk intuitive when it comes to 'buying the fear' in circumstances like this. Better than expected set of results

One to watch in 2017

Time to re-buy rivaldo, should be a good mixed second half results but still cheap at current levels IMO

Whether to buy more or offload.. or sit on hands :D Hopeful volumes will pick up ahead of the trading statement next month and the spread will close

At the date of the last share purchase in September a total of 9,577,143 Ordinary Shares were held in treasury. Today we learn following the options and purchase of shares a total of 8,105,887 Ordinary Shares are now held in treasury. Options exercised mean the company will not issue new shares nor dilute our investments. From what I can tell, management now hold an increased percentage of the company and a further 600,000 shares were purchased at 7.67 over the period to be held in treasury. Could be management are gearing up for dividend payments.

True enough platinum has weakened following the last discussion. Still no comparison between OMI and SLP at current prices however given the former will not be banking much at current prices. SLP will be banking around $10m per annum cash at current PGM prices

Palladium bouncing well today, up 3.25%

Nice summary Wuffle, agree entirely with all your points! SLP sit well on the producers cost curve and have been improving efficiencies to ensure production levels remain steady. We are about to see cash-flow directed to Project Echo which will help reduce tax payments in July 2017 and beyond. I'm not entirely sure if we will receive a rebate for the tax due next month as it falls in the same financial year. That would be a welcome year end bonus if it happens. Further out cash costs will fall below $400/oz. Would like to see PGM prices strengthen again like we witnessed last spring. We know palladium supply is tightening, majors paying huge premiums for majors. It would be good to see major platinum producers announce project suspensions this year to help combat depressed prices. How long can they continue to bleed cash? Hope everyone enjoyed themselves over Christmas

Platinum now 3.85% up on the day and climbing after that mini spike. Perhaps those mature funds circling again.

Comparison from earlier this year. We have to look all the way back to January when platinum traded below $900/oz. We can look at 27th January the daily average price of platinum was $903 whilst gold was $1136, very similar to today's pricing. However palladium and rhodium traded at just $501/oz and $648/oz respectively. Prices are up 38% ($690/oz) and 27% ($825/oz) still. Better yet SLP's basket price is around $75/oz higher than this time, costs have fallen since then and production last quarter was the highest on record.

* Palladium supply DID NOT dry up during this period, it was demand that pushed prices higher. Norilsk had been in discussions with the Russian Central Bank since 2014 over the possibility of acquiring palladium from it's extensive stockpiles, according to reports by CDFund up to $2 billion worth of palladium. This was to help solve the palladium deficits in the sector and ensure supply to its long-term customers. "For decades, the stocks of Russian palladium reserves that were built up during the Cold War were slowly released to close the structural gap between supply and mining production. Around the year 2010 the Russians began to recognize the strategic nature of palladium, and since then their role as “swing producer” has stopped." Fast forward to May of this year and Norilsk Nickel had made 'pilot' purchases of palladium through its investment fund according to Reuters. It is unusual for a major producer of a commodity to start buying it on the market but it has done so apparently to reduce market volatility. Norilsk CEO has previously suggested a lack of investment into new palladium mine supply will lead to a crunch as PGM demand rises in the coming decade. Norilsk is currently the sole shareholder in the Global Palladium Fund, but Mr Dubovitsky said that it could in the future attract other “strategic investors that would have the same type of mentality. Perhaps many close to Norilsk, their competitors even were able to take advantage of this development during the months after, but what of those funds who will come late to the party? There are always late arrivals. If there is increased buyer demand for palladium in the market might not others swim in the shadow of Norilsk? It appears Sibanye has done just that by offering $2.2 billion to acquire Stillwater, a company that predominately produces palladium. Sibanye is now poised to become the world’s third-largest producer of palladium. Bear in mind Sibanye acquired Aim-listed Aquarius Platinum AQP for $294 million two years ago. The race to monopolise this commodity is well under way and there will be many more twists and turns to come in the next 5-10 years as the supply-demand deficit widens. Sibanye offered a 23% premium to the Stillwater market price at a time when palladium prices were already trading just off year highs. This illustrates the growing importance of a high grade palladium deposit and processing facilities. Stillwater is the world’s largest auto catalyst recycler, an operation that should give Sibanye strategic insight into the market. Majors gobbling up majors in multi-billion dollar deals is exciting!

Appreciate your posts re.the supply / demand question. We are referring to the same article, thanks for the clarification. The link I posted is to the synopsis with a brief overview. Of interest it suggests that there are "numerous factors within the platinum market pointing towards potential upside in demand and greater downside in supply" and specifically that "automotive demand will remain robust with, for example, demand for platinum from the global truck market potentially doubling over the next five years." Net industrial demand trends point to modest demand growth, jewellery demand growth looks to be negligible. Investment demand growth is what interests me. The report is deliberately cautious according to HSBC's analysis of the findings which predict ‘several hundred thousand ounces of additional demand’ over the forecast. http://www.platinuminvestment.com/files/WPIC_PR_Glaux%20Metal_290116.pdf Now that report was released in January 2016 and had been compiled in the months previous so the author had no insight into what was going to happen around the date this was released. Recently published data from independent research consultants SFA (Oxford) highlighted a surge in investment demand for physical platinum at the end of 2015 and start of 2016. This demand came largely from the mature Japanese market where retail investors bought heavily into physical platinum in the form of bars and coins. If you check the charts for platinum and palladium you can see platinum bottomed in mid January before surging in the following 2-3 weeks where as palladium took another 5 weeks before its price bottomed and subsequently went on a bull run. Now I don't have another independent quote to verify palladium investment demand 'surged' around this time, a month or so after the surge in platinum investment demand. But we do know Norilsk announced that they would set up a Global Palladium Fund to buy the metal on the market at spot prices. This came in late February and no doubt word of this had leaked in the days / weeks previous to third parties. Perhaps Norilsk had stepped up buying too, stockpiling through a mutual fund / beneficiary... Norilsk, the largest palladium producer in the world effectively corned the market and following the announcement prices rose 25% in a matter of 2-3 weeks. This to me can be classed as investment demand and as we have seen it is truly unpredictable. Palladium supply dry up during this period, it was demand that pushed prices higher. We also know when platinum investment demand rose at the beginning of the year the price of platinum rose sharply. Interestingly Rhodium is showing similar behavioral signs recently and has broken 52 week highs as of 2 days ago (last available date). It's likely investment demand from funds have risen sharply to cause this but as of yet no reports are available to confirm this.