Member Info for TigerByTheTail

https://www.kitco.com/news/2020-02-18/Palladium-prices-up-8-on-the-day-looking-at-new-record-highs-on-deficit-concerns.html
This is already old news! According to Kitco just now palladium is c. $2,650/oz, platinum $1,000, and rhodium $10,500.

Hi Ragnar!
I always assume that house brokers are briefed in detail by the company's management, who often use their notes to smuggle out "deniable" information to the markets, such as about future dividends. But assumptions are dangerous things, and maybe Liberum have less access to Sylvania than is typical for a broker to have to their client. I just don't know.
As others have pointed out, the cash balance by the end of the year is going to be huge. Sylvania aren't a bank, so they will have to either invest the money in new projects, or to pay it back to their shareholders (either as dividends or as buy-backs). Any way up, it should be good for us.
BTW, I agree that the palladium-rhodium market is more solid than many seem to think it is. IMO, this isn't a speculator driven price spike or a "corner", but a fundamental shortage of the two industrial metals, whose increasing use in catalytic converters is dictated by ever tighter anti-pollution regulations worldwide. Other than from more and better recycling, it's hard to see where new supply is coming from.

111p.
Rather than going for a P/E or NPV based approach, they note that it is trading at 0.9 times EV/EBITDA value.
They are also forecasting huge dividends of 15 US cents (=@12p) and 21c (=@16p) for 2020 and 2021. Those are huge yields at SLP's current share price.
IMO, this share is still the most ridiculously underpriced share I've ever come across.

That is research(hyphen)tree.com.
Sorry, this silly website deletes the addresses of rival sources of info...

https://*********************/companies/uk/precious-metals/sylvania-platinum/research/liberum/liberum-sylvania-platinum-dislocation-from-record-prices/1_3546a8e7-21f0-4155-a06e-496c58627a69

Hi Sumoskier!
Some considerations for you, off the top of my head:
1. SLP basket very heavy in rhodium (they have some tailings which are 15% Rh (as % of 4E pGM content))
2. SLP report as 4E PGM (i.e. Pt, Pl, Rh and Au). JLP report as 6E PGM (including ruthenium and iridium, which SLP treat as by-products) - this makes a big difference as ruthenium is cheap.
3. SLP accounting very conservative - they actually have a huge "trade receivables - trade payables" surplus, which is very unusual. It means their cash balance ($36m) is, in effect, a minimum figure.
Personally, I make SLP a raving buy at the current price. Its P/E at 50p is about 4, based on this morning's interims. And that doesn't allow for the company having no debts and 10p per share in cash, and it doesn't allow for the boom in PGM prices since December 31st.
JLP is probably also a buy, especially for the medium term, but less blatantly so.

Is this just a blip upwards, or is this share price breaking out to a more reasonable valuation for this company?

Hi Ragnar!
Yeah, the share price dropped on opening, for all of about 5 minutes.
Did I get to buy any cheap shares? - No.
Now we're blue, and I guess in for a re-rate to a more sensible share price / P/E.

Talking of interims, SLP interims out this morning. I'd recommend taking a look, they are very strong.
I just wish JLP would copy SLP's way of reporting, so that we could see more clearly how the company was doing.

Yes, the share purchase plan isn't open to UK investors.
But you can buy on the open market today for almost the same money.

Hi Ragnar!
For the EBITDA forecast they are probably using lower-than-current-market PGM prices - maybe average PGM prices for H1. Also, they are probably basing it on achieving only guidance, despite the broad hint in the results that guidance may be revised upwards in due course. In short, they are being ultra-cautious and making sure that they will beat their estimate.
If the SP does indeed drop on opening, then I will be looking to buy!

The results themselves are just plain excellent.
EPS (on fully diluted basis) of 8.22 US cents for H1, compared to 2.41c a year ago.
That's 16.44 US cents annualised = @12.6p.
49p (current share price) / 12.6p = P/E of 3.89.
Average mining sector P/E = 13; African miners trade at a discount to that, usually at a P/E of between 5 and 10.
So what P/E is appropriate for this highly profitable, dividend paying, share buyback operating, debt free, long life, low cost PGM producer with a $36m cash pile? Surely it has to be worth a P/E of 8???
Oh, and by the way, Q3 is going to be a complete blowout as PGM prices have soared since the New Year...

First things first - I wish Terry a long and very happy retirement.
As a shareholder here since 8.2p, I can only thank him for his leadership and hard work. He leaves Sylvania in good hands and in a good place, but he will still be missed.

Look who is behind Highland Gold. It has oligarch-level protection (i.e. a decent roof or "krisha"). EUA doesn't.
Don't you understand anything at all?!?

Not short here. Never had any shares in EUA, either.
Speak fluent Russian. Worked there for 20 years. Know key players in both politics and industry - especially in mining and metals. Most Russians would agree with my opinion about Russian business, or possibly say worse. It's the law of the wolf there.
I don't wish anybody to lose money on any share, but (IMO) thinking this company is worth 200m quid is naive in the extreme. I hope I'm wrong, but I don't think so.
Signing off now.

HI Aandi!
That's not how this works.
The MT licence will be found defective in a local court and rescinded. Then it will magically be re-awarded to Norilsk Nickel, or another powerful and well-connected party.
It's called "raiderstvo". It's how things get done in Russia. Everybody who's done business there knows that.
Small foreign companies (and their investors) do NOT get to get rich off Russia's natural resources. V.V. himself has spoken about how offensive he finds this idea.

Hi Blaustein!
Finally, a poster who has a clue how Russia operates.
I'm probably the only poster on here who has actually been to Monchegorsk. Norilsk Nickel basically run everything up there, the schools, the local administration, the courts, the sanitoria, etc.
If Norilsk Nickel want "Monchetundra" they will take it, using a mix of legal and administrative pressure and a very lowball offer. (And if they don't want it, then it isn't worth having). Most Russians would find the idea that a load of smalltime foreign AIM investors are going to get rich off Russia's natural resources either offensive or simply ridiculous. That's not how things play out there - the big fish most definitely eat the little, and foreigners most definitely are fair game to swindle.
At $200m the market cap here is way too high. PIs here have got this completely wrong.

Hi Parob!
There is also this - the recent JMAT fundamental analysis of the PGM market. It explains in detail how palladium and rhodium are both in long term deficit, with only very limited possibilities of new supply in the short to medium term.
http://www.platinum.matthey.com/documents/new-item/pgm%20market%20reports/pgm_market_report_february_2020.pdf
All in all, things are looking very good here. Given most of Sylvania's revenue now comes from Rh and Pl, rather than Pt, maybe it is time to think about a company name change to Sylvania Rhodium?

I wouldn't mind an offer from Jubilee coming in the form of shares - as far as I'm concerned Jubilee is a good long term bet and their shares are as good as or better than currency to me.
However, I would like quite a lot of Jubilee shares for my Galileo shares! Let's say 1 JLP share for every 2 GLR shares. Is that OK with you, Leon?

My take on it is that Sylvania is that rare company which can control its own share price. It's highly profitable, debt free, it has a huge cash pile relative to its size (c. 10p per share), and it has no working capital needs. In short, it's a picture of financial health.
If the Sylvania board are concerned that their share price is too low, all they need to do is to announce either a decent interim dividend or more share buybacks.