Member Info for TigerByTheTail

Hi Chas!
Thanks for posting. At first glance, it looks like Centamin are "de-emphasising" their West African exploration, in favour of emphasising the exploration potential of the wider Sukhari tenement area. Burkino Faso very much on the back burner, and seemingly up for sale.
On balance, I like these developments.

I'd put good money on palladium hitting $3,000 per ounce later this year.
Rhodium seems to trade at about a 4:1 ratio to palladium, so that implies $12,000 per ounce for Rh.
Essentially, new demand is created by countries tightening up vehicle emissions standards, a process which is ongoing and spreading around the world. And there is almost no new supply, except from improved recycling of old catalytic converters.
Platinum dances to a different tune - it is affected by the demise of diesel engined cars, jewelry demand, the gold price, future fuel cell demand, and a host of other factors. I make it underpriced in the medium term, but I'm not so confident of its price movement in the short term.
I wonder what "current P/E" this highly profitable cash rich debt free company is trading at, given current metals prices? Is it less than two?

Hi Zebediah!
I don't think an exploration licence is required for Kashi'tu - it falls within the full large scale mining licence for Kabwe, which already exists, but which needs to be renewed later this year.

Palladium and rhodium are still going strong - they're up at $2270 / ounce and $9200 / ounce, according to Kitco.
I thought their prices might stumble after options expiry on the 31st, and on China virus slowdown fears (Wuhan is a hub for car manufacturing). But no, rather the opposite. There really is a profound shortage of the two metals...

Hi Mr. Tibbles!
But buying Centamin is the only way to make a decisive entry into the Egyptian market and to gain first mover advantage. If Barrick believe (like I do) that a) there is still a huge amount of gold to be discovered inside the 160km2 Sukhari concession, and that b) Egypt is more or less the last unprospected frontier for gold mining, then they may be willing to compromise on their usual business model. Mark Bristow hasn't been shy about taking on risk in the past.
Anyway, having called it right about Endeavour bidding before Christmas, I'm now doubling down and calling for Barrick bidding before Easter. If I'm wrong I'll throw my crystal ball away!

Hi DropInMonkey!
We're close in our "fair value" price estimations based on gold at $1550.
I'm obviously more optimistic about the long term gold price trend than you are. Time will tell who's right on that.
I agree that the key to adding shareholder value here is to add reserves at Yanfolila (and not to waste any more money on Dugbe / Bunker Hill / other pointless distractions). And to achieve guidance on production and AISC, of course. I'm sure that Hummingbird is still being marked down in price due to all the previous problems.
IMO, HUM will trade up to 30p over the next quarter, as long the price of gold holds up. It's "too cheap" right now.

Hi DIM!
Thanks for posting. Our underlying assumptions are different, so we naturally get different valuations.
I still have some corporation tax break left for this year, and I'm assuming that the Mali government will "pay" (in the form of waived tax) for the extra 10% of Yanfolila. And I calculated at a $1,550 average gold price, as I believe we are in a long term gold bull market. So, even though I used a more hostile 12% discount rate, I get a much higher valuation.
I still think there is a reasonably low risk trade here - buy at current levels and sell at 30p. However, I'm going to wait before buying as I think the gold price and SP may dip in the next few days.

Hi DIM!
p.s. By the way, point taken about how single mine ops have far too high central costs. Especially when management award themselves 1p share options as well. A suitable takeover by a larger miner would be in all shareholders' interests.

Hi DropInMonkey!
Can I ask what assumptions did you use? For gold price? For remaining Mali tax breaks? What NPV discount rate? I assume you gave no value to both Dugbe and to Cora, yes? And to exploration upside at Yanfolila?
I ask because I get a substantially higher value for the company. I think I've included everything in my model - royalties, 80% share of mine, Mali taxes etc. But maybe I'm wrong.
Also, isn't it a little unfair to say there will be $10m a year exploration expense, but then not to include any value for the probable results of that expenditure?

This seems way too strong a reaction for some general comments from the head of an unrelated company.
PGM prices are stable (at very high levels).
I can only assume that somebody with a substantial holding wants out fast and is really pummelling the bid.
IMO, there is a big buying opportunity here, but it's best to wait for the knife to hit the floor first.

AIM never ceases to amaze.
SLP produced 40K 4E PGM ounces in H1, against full year guidance of 74-76K.
Ebitda for the half year was $36.6m, against $30.2m for the last full financial year, an increase of more than 100%.
Cash in the bank has risen from $21.8m reported six months ago to $33.8m reported now.
How do any of these numbers justify a 15%+ fall in the share price?!?
Do we have a distressed forced seller? Or is this being shorted ahead of a takeover bid? Or what?
Very confused.
Anyway, the company is in full control of its own share price, given its cash pile. If it wants the share price higher, all it has to do is announce a buyback or dividend together with the interim results due in 3 weeks time. $36.6m cash in hand = roughly 10p per share!

That's a pretty good update, sane and sensible, and just a little better than I'd hoped.
I'll do the exact maths later, but there seems to be a clear disconnect between the current share price and any "reasonably pessimistic" valuation of Yanfolila.
It looks like being a tough day for the gold price, so I'm not surprised the SP response so far has been muted. But HUM should go up from here.

I thought this was quite a neat summary of the fundamental drivers behind the current gold bull market. Note the important caveat in the last paragraph!
https://www.zerohedge.com/news/2020-01-30/feds-plan-cap-yields-signals-higher-gold-and-silver-prices
As for Centamin, my crystal ball says there will be another takeover bid in the next couple of months. I think this time from Barrick. There is too much potential both in the 160km2 Sukhari concession and more generally in Egypt for the majors to ignore. Hopefully, the offer this time will be better!

When PGM prices are so high, this had to become a thing...
https://www.theguardian.com/money/2020/feb/01/catalytic-converter-thefts-hybrid-car-insurance-toyota-prius
I don't think it will put much a dent in the shortage of supply, though.

I'm still a bit shocked by the market's reaction to Friday's results. Does maths education in this country really suck that badly? Or have we become so "woke" that we've forgotten the whole point of business is to make a profit - preferably a big one? Or, just perhaps, is the share being shorted ahead of a takeover bid?
Whatever. In most cases, I'm sceptical about share buybacks. Mainly, because I believe that management should spend their time running the business, and not waste it worrying about the share price. I am totally against share buybacks when the company borrows money to fund them, or when they are launched when the share price is already high. (That covers about 90% of buybacks in USA!)
But maybe Sylvania should consider buying up and cancelling as many shares as they can up to a price of 50p or so. They've got ample cash to do so, and the share price is ridiculously cheap.
Alternatively, they really should consider paying an interim dividend.
Anyway, the whole point of this investing lark is to buy low and sell high, so I'm most definitely a buyer at these levels.

Just broke $10 in New York. Still lagging here.

Back in the real world...
https://www.kitco.com/news/2020-01-31/Rhodium-prices-hit-record-high-after-spectacular-rally.html

Hi MinorMiner!
You're gonna have to give me a clue here.
The Kabwe small scale licence (i.e. the tailings) is still owned by EPL, a BMR subsidiary, no? JLP have the right to buy it out and pay BMR a royalty instead, no? That process seems to be moving very slowly, but I can't see how that is a problem for GLR. In fact, rather the opposite - JLP will need zinc ore for their new processing line at Sable (due Q2) - the higher grade the better, of course. And since JLP have postponed the proposed vanadium line, it doesn't matter anymore that Star Zinc ore has almost no vanadium content.
That's all good for GLR, isn't it? That is, as long as GLR can get the small scale mining licence they need and set up the quarrying(*) and trucking operation required.
As for Kashi'tu, that comes under the Kabwe large scale mining licence, now held by GLR, and which is due for renewal this autumn, doesn't it? It's got huge long term potential. But it's not an immediate issue, is it?
So what's the obvious thing I've missed? Genuinely puzzled by your post.
(*) I refuse to call Star Zinc mining. Mining is hard. Mining is dangerous. It doesn't involve just digging high grade ore out of the ground with a 1:1 strip ratio. That's way too easy to be called mining.

Hi Mike!
I can't explain it. Basically, they've done last year's EBITDA in six months - and PGM prices have jumped since the end of the period as well, boding well for this quarter.
What was the market expecting - that they'd tripled EBITDA?
Yes, the chrome industry is in trouble due to low prices. But that presents as many opportunities for SLP as it does difficulties. There are going to be a lot of eager sellers of historical tailings piles out there.

Slickharry - do you actually work for Hummingbird's PR company, or are you a paid poster?
Your posts are so servile and so silly that I'm getting curious.