Member Info for TigerByTheTail

Hi Berni!
Simply untrue. Try a little research before posting.

SLP's financial year runs from July to June. So, for this financial year we have (numbers rounded):
Q1 - production 20,800 ounces @$1,654 basket price, profit $12.5m, cash pile $26.6m
Q2 - production 19,200 ounces @$1,872 basket price, profit $11.4m, cash pile $33.8m
Q3 (reported y'day) - production 19,950 ounces @$2,038 basket price, profit $25.4m, cash pile $45.4m
TBH, I don't expect much from Q4. One month of production has been lost to the shutdown, production needs to ramp back up, and the PGM basket price, whilst still healthy, has come off its highs. SLP are guiding toward production in the region of 8,000 ounces for this "lost" quarter. I think break even is a realistic expectation.
Overall, I'm guessing that profit for the entire year will be in the region of $50m (or £40m). This should be compared to SLP's current map of £130m!
In short, SLP should "eat" the Covid-19 disruption without suffering serious effects, and it should be able to pay a healthy end of year dividend. Additionally, cash is king now, and SLP is cash rich, and who knows what assets may soon become distressed and available on the cheap!
IMO, this share is seriously underpriced. A "forward P/E" of only 5 would imply a share price of 72p - and that is including the effects of the Covid-19 disruption!

That last increase in a short position to drive down the share price as low as possible and to strike fear into any potential longs is a usual tactic of shorters when seeking to exit a position. It works, apparently.

Hi Colonel!
I see you're over here too, as well as on SLP!
I agree with you. Clever shorts should be buying back and taking their profits at these levels, not risking new capital.
Tullow are not going bust. And this is now the eye of the storm for the oil industry.

Hi Colonel!
I was somewhat reassured by that paragraph. We've known about the coming Samancor retrenchments for some months, but we didn't know which operations it would affect before. Normally SLP's operations run on a mix of run of mine material and tailings dump material; but they've run on dump material only before (e.g. during strikes). It will affect production numbers slightly, and it does reduce the theoretical LOM of the operations. But these are manageable.
By the way, the chrome price (UG42) has picked up a little in the last few weeks - though only from an absolutely dire $125/t to a very depressed $140/t. A full recovery in the chrome price would be to everybody's benefit, including SLP's.
Alas, I got over-greedy this morning. I was going to pounce on the dip, but I missed it by trying to squeeze out an extra penny in "savings"...

Hi Ragnar!
I wonder if we won't see the usual SLP pattern of a flat response to the results today, followed by an increasing share price over the next few weeks.
I agree that Q4 results will dip - both due to less production (chiefly from the lockdown) and to a negative sales adjustment as PGM prices have come off their highs. BUT the next quarter is also the financial year end. Much will depend on the size of the dividend SLP then announce. It is is anything like the numbers floated in the broker's note, then the share price will soar on that news.

Yes, I make the results to be excellent as well. Unexpectedly good number for production ounces. Financial numbers are absurdly good for a company with this mcap.

https://oilprice.com/Energy/Energy-General/Trump-Could-Use-Nuclear-Option-To-Make-Saudi-Arabia-Pay-For-Oil-War.html

One way or another, the U.S, has to teach the Saudis a lesson about who is boss and who is servant in their relationship, which has always been (in essence) a protection racket. The above article suggests one set of measures the U.S. could take to preserve their strategically (and electorally) vital shale oil industry. There is another way, of course - which is for the U.S. to close the Straits of Hormuz to all oil traffic via naval action - a naval action "officially" targeted at Iran, but one designed to hurt the Saudis as well. That would quickly send the oil price back to more sustainable levels. So would the overthrow of that murderous idiot Crown Prince MbS, which is also a possibility.
I think we've pretty much reached the crisis point in this oil price war now. So I expect "something" significant to happen in the next few days. What exactly will happen, though, I'm not so sure.

Yes, it's the long term average price of Brent we should be interested in here.
The WTI contract settlement price will get all the headlines this month, though, due to the storage crisis. The newspapers will scream pretty loudly about oil now being worthless, thanks to that issue. But it's just not true.
For the life of me, I wouldn't be shorting this share. Trouble in the Middle East can blow up at any time. Even the suggestion of the Straits of Hormuz being closed down would reverse the current price slump in hours.

Hi ShrewdDude!
Yep, that's how I see it too.
In reality, any short term gyrations in the WTI forward contract price are irrelevant here. However, the short term noise may be get pretty deafening for a while.

The quarterly RNS has traditionally come on the last day of the following month - so that would make it Thursday.
But it's not a hard and fast rule.
Any road, I'm looking forward to it!

Hi Moneyhawk!
I have to say I agree with you that (extreme) caution is required in these markets. I believe that we are in for a nasty bout of deflation, before (possibly) inflation kicks in. All in all, I believe this is just a bull rally in a bear market. So I'm maintaining at least 50% levels of cash.
JLP's PGM tailings business should still do well and produce free cash flow for the company. Less certain about the chrome operations (though prices have improved recently to about $140/t), and even less certain about the Zambian adventure.

HI Longish!
I don't want to sound cynical, but there is a way that Trump can save America's (strategically and electorally vital) oil industry - it's called war.
A small war with Iran would block all exports coming through the Straits of Hormuz, thus solving the market deficit at a stroke and pushing the oil price back up to, say, $50 a barrel. Though such a small war would seem to be aimed at Iran, it would also serve to punish MbS and Saudi Arabia for their deliberate wrecking of the oil market.
America and Iran almost fought back in January. I reckon the next month will see their conflict flare up again. It makes too much sense, in an awful way.

Further to previous post...
South Africa officially moving to "Level 4" status on May 1st - that includes 100% opening for open pit mining (i.e. SLP's surface plants) and 50% for underground mining.
Some restrictions regarding night curfew and social distancing remain, so it might take some time to get back to full production.

Hi CJ66!
South Africa is gradually reopening its mining industry, though with some constraints involving social distancing. Jubilee (JLP) operate similar PGM tailings operations as SLP in South Africa, and they have already announced (by RNS) that they are back at work at their two PGM sites. I'd guess that is also true of SLP, but I think we'll have to now wait for the quarterly results RNS (30th April?) to be sure.
(By the way, SLP has far superior financials to JLP, which is a bit of a curate's egg, with money-losing chrome operations and a Zambian copper/zinc refinery as well as its PGM operations. All in all, I don't know of any share with better fundamentals than SLP).
I'd say SLP is about as Covid proof as you can get, bar gold miners, insolvency practitioners, divorce lawyers, Zoom and Ocado...

Hi ngniv!
Yes, that's exactly what I meant: liquid assets (cash and gold) minus remaining debt = a positive figure (at last!).
Obviously, that doesn't mean you'd take all the cash out of the business to pay off the remaining debt there and then. And, anyway, there is no point in paying the Coris Bank debt back early, as the penalty clauses for early repayment mean that you wouldn't save any interest by doing so.
Net cash is an important milestone for the company to achieve, so I do hope they publicise it. It should happen next week or the week after by my reckoning.

Hi Kamda!
You're too late on the tanker play - the time for that was 2-3 weeks ago. Now it's all worked out, and any latecomers will lose money. Just saying...

Yes, I reckon HUM should turn cash positive around May 1st. I hope they RNS it - it would make good PR.

https://www.kitco.com/news/2020-04-23/Can-palladium-see-temporary-surplus-this-year-Norilsk-Nickel-makes-its-projection.html
Despite the headline I found this article quite optimistic. If there is a surplus this year in palladium (due to falling car production) it will small and short-lived. Rhodium, of course, is in much more substantial deficit.
I don't suppose we'll see the super-high basket price that we saw in Jan and Feb again for a while. And I expect platinum to languish. But the SLP basket price should still be very healthy.
Looking forward to Q1 2020 results next week.

$4,000 by weight in roubles at that time was about 25kg, so my self-defence plan was viable. Russians called them "kapusta" - cabbage. I used to keep them in the fridge, I think because (unconsciously) I thought they would go off like stale veg and lose their value if I kept them too long. Oh, the wonders of hyper-inflation!
The going rate for a professional "hit" at that time (1992) was about $1,000, though if you moved in the right circles, you could talk a drunk into it for a bottle of vodka. I lost five friends in a year (1993) - all murdered - so yes, they were strange days.
For tomorrow, I just hope it turns out that Uncle Youseff was on the money with his prediction of 125K.