Member Info for TigerByTheTail

Have you seen PGM prices today?!?
Palladium down over $500 according to Kitco. Platinum and rhodium both also down, but "only" by 10% or so.

Hi Kalan!
If you need a link to the JMAT report it was posted on the SLP board when it came out, circa Feb 12th.Just scroll back to it.

Trivia...

A Day On Mercury Is Actually Longer Than Its Year. One day on Mercury (i.e -the time it takes to rotate around its axis once) lasts 176 earth days. A year on Mercury (i.e – the amount of time for Mercury to orbit the sun once) is 87.97 earth days.

So five days on Mercury = 2.5 Earth years...

Hi Kalan!
The recent JMAT report on PGMs went into some detail about the difficulties of replacing palladium with platinum in catalytic converters for petrol engines, which run hotter than diesel engines. It's not a simple substitution at all. That's why I'm interested in any new technological developments in this field.
Also, as regards both SLP and JLP, we should not lose sight of the importance of rhodium at current prices. Rhodium brings in substantially more revenue than either palladium or rhodium for both companies. And it can't be substituted (thanks to its NOx catalytic properties) and its price is still very high.
I'm currently out of SLP, like I'm out of JLP . I still think SLP is a good company, but I think we're in for a market crash. In fact, I'm out of most everything - 90% cash. All that's left are a few gold mining shares.

Hi Bulldog!
This is very interesting and possibly very important. Have you got a link to any background on this?
Does the subsitution work in 3 way converters even at the high temperatures generated by petrol engines?
Does it affect the demand for rhodium?

The spread is always horrendously wide on this share. BOD is very thinly traded - a lot shares are tightly held by a small group of people connected to the chairman. I guess this is just what it takes to persuade a market-maker that it is worthwhile to make a market in this small (but interesting) company.
(Also, for what it's worth, spreads across the entire market have become much wider recently. That's a sign of the general market turbulence).

I can think of a few reasons for the SP drop, but I'm just not sure which is the right one!
It could be:
The ASX has a down on gold miners in general at the moment (see Newcrest's SP). Some of the selling could be forced liquidation due to general market woes. The market (always bipolar) has overdone its reaction to last year's production problems.
Any of these reasons would mean RSG is a good buy at this price.
Or it could be:
The market has inside info that production is not going well at Syama and Mako. It is worried that the Ravenswood sale will not complete. And, above all, it is worried that Resolute won't be able to roll over their current debt, which matures soon.
All of these reasons would mean that there is more trouble to come.

This share puzzles me.
Its main trading platform is the ASX, where it is currently down again at 39p equivalent, and where it is still being shorted.
Why? Yes, the Ravenswood sale hasn't yet fully completed and the company has debts, but (if they achieve guidance or anything near it) it should also generate large amounts of FCF at the current gold price. I don't get the share price slump.
Either this is a bigtime buying opportunity or I've missed something bad and important. Time to research some more!

Hi Craig!
Yes, it looks like JLP have made the payments due for the purchase of the Hernic / Inyoni chrome rights from Samancor. This is good, not least as raising money through a placing in the current market would be very difficult.
BUT, with hindsight, it's clear that JLP has hugely overpaid for the Hernic / Inyoni chrome rights.
Just as they have wasted money on the fine chrome process at Dilakong.
Just as they paid too much for Platcro / Windsor, and they are likely losing money on the chrome production there.
All told, Leon bet heavily on the chrome price turning round. Unfortunately, it is still sinking into the depths (now $125/t), and it is unlikely to improve soon as the world heads towards recession.
It is also worth noting that two years have now passed since the purchase (at huge cost to JLP shareholders) of the Kabwe zinc-lead-vanadium tailings, and not a single ton has been processed. Nor is it likely to be soon.
Yes, the PGM processing operations at Windsor and Inyoni will be making money at an operational level. But "the rest" of JLP's operations are a horrible mess.

Hi Ragnar!
It's at moments like these that I'm very grateful that SLP is debt-free and exceedingly cash-rich, so it won't need to go begging to any banks for emergency working capital, especially in these times!
I'd still like to know for sure who is/are SLP's refiner(s)!

Hi Sotolo!
I know cash is not the same as profit, but it's worth remembering that on 14th Jan Centamin reported:
"Centamin continues to maintain a robust financial strategy, with cash and liquid assets of US$348.9 million as at 31 December 2019[2],[3] (increased from US$289 million as at 30 September 2019[7]), with no debt, hedging or streaming in place."
That gives me some confidence that the annual results should be either OK or better than OK.

Hi Rebess!
It looks like we have a motivated seller who is pushing the SP down..
In these troubled days the explanation could be as simple as the seller's need to raise cash any way they can.
But I'm going to stick my neck out, and offer that Centamin's SP is being controlled by shorting ahead of the next incoming takeover bid. IMO, we're being softened up, folks...

Was today's oil price crash the moment when we passed the point of no return? Was it the "Lehman Brothers" moment of a new financial crisis?
How many heavily indebted oilers won't now be able to pay their debts? How many banks and other lenders will go bust when the oilers default? Will the corporate debt market now seize up, dragging down other indebted companies?
How can we avoid a deep recession when the only functional defence we have against the coronavirus is to impose lengthy quarantines and to stop most economic activity? How does cutting interest rates help the economy when consumers are afraid to mix in crowds and spend money? How can governments stop millions of small public-facing businesses (cafes, hairdressers etc.) going bust when their revenues fall of a cliff?
Has today's crash priced in the consequences of both the virus and the oil slump? Or is this just the beginning of something much longer lasting and much bigger?
IMO, debt-free cash-rich gold miner Centamin is one the best stocks to hold right now. But is it wise to hold any stocks at all?

Hi Jammer!
Thanks for the informative and insightful reply - it is much appreciated.
I think your analysis may be right.
As a JLP shareholder I appreciate that they are proceeding with caution through this regulatory minefield. But why on earth did LC and CB ever agree to such a deal in the first place? It's been two years since they massively diluted their shareholders to pay for Kabwe, and there is nothing to show for it so far, and it's not certain there ever will be anything to show for it.
If I were a BMR shareholder, I'd just be feeling frustrated that time is passing, and very little progress is being made.

IMO, no matter how good Hummingbird's prospects are, this is going to be a bad day.
The gold price is yoyoing like crazy, and there will be a lot of margin calls and forced liquidation around. Not even gold mining shares will escape this general sell-off.
So down before up and away - just like in 2008.

Hi Cowichan!
Thanks for posting that.
Looking at it from Newmont's point of view, doesn't it make perfect sense to bid for Centamin?
For a pretty reasonable price they will get a working Tier 1 gold mine, plus the current huge reserves at Sukhari, plus all the gold still be discovered near Sukhari, plus first mover advantage in the wider Egyptian market, plus some decent West African exploration assets, plus $300m in cash.
Honestly, I thought Barrick would come in for Centamin before Easter. Perhaps I got my major wrong?

Yikes!
Gold $40 down in a few minutes. I'd bet that was a margin call / forced liquidation.
There must be some players hurting badly out there.

These are truly extraordinary times.
There are worrying signs of serious stress in corporate bond markets. As for shares, it seems to me we are in another "sell what you can for what you can get" liquidation event, most likely to raise money for margin calls. Other than forced selling, I don't know how to explain Centamin's SP dropping back when the gold price is $1,685 / oz.
I wonder what news the weekend will bring. Obviously, three more days of headlines about the alarming spread of the dreaded virus. But I wonder if it won't bring news about a "signature" bankruptcy (a la Lehman Brothers) as well.
I've largely gone to cash again, but I'm still holding some Centamin shares.

"Anglo American shares have dropped by 8.4% after a majority-owned subsidiary of the FTSE 100 miner said it would be unable to honour its contracts. Anglo American Platinum declared force majeure as it will be unable to process any materials for 80 days after a smelting plant was hit by an explosion. It cut its 2020 production outlook."
Question: Do we know who smelts the PGM concentrate that JLP produces? Is it Amplats or somebody else? (I don't know the answer to this question).
BTW, is this the smelter that Leon Coetzer once helped design?

Does anybody know (for a fact) who smelts SLP's concentrate? Is it Amplats or somebody else?
I've never come across this info.
I'd also be interested in knowing who smelts Tharisa's and Jubilee's PGM concentrate. This will make a big difference to the short term share prices of all 3 companies.
p.s. I agree that the biggest consequence of Amplats' accident will be to put a very firm floor under rhodium prices - even if car production drops due to the dreaded virus.