Member Info for TigerByTheTail

Fidelity have now sold down from over 10% last year to under 5% now.
The question is do they stop selling now, or are they going to sell out entirely?
All in all, this situation reminds me of the mass disposal of SLP shares in the 30p - 40p range by institutions. Look how that turned out!

Remember that Nornickel are responsible for around 13% of the world's rhodium supply as well.
I can't quantify the rhodium production loss, but that will only worsen the existing market deficit.
This is now three major accidents inside a year for Nornickel - the oil spill, the concentrator accident, and now the two mines flooding. Years of underinvestment are beginning to tell.

I am mystified how anybody can ramp today's RNS. The WK resource is tiny by world standards. Barely worth the bother.
In effect, 90%+ of the value of this company must come from Monchetundra, or the company itself is horribly mispriced.
My money is on the latter.
As usual, Mac's posts are complete garbage.

West Kytlim finally officially confirmed as being a tiny PGM resource - total mineable resource approx 144,000 PGM ounces only. (I.e. 29,000 ounces per year over a five year mine life, AT BEST!)
By itself, this could never justify even 10% of EUA's current market cap.

...
The group believes that an export tax would seriously damage South Africa’s primary chrome ore sector, without giving any real benefit to ferro-chrome producers.
South Africa’s finance and mineral resources ministries were approached for comment but were non-committal.
“There was no chrome tax mentioned in the budget, so there is nothing to comment on,” the finance ministry said.
The call for engagement from ChromeSA to the government suggests that the proposal remains active behind the scenes, but that the group is not aware of any decision.
“I suspect an announcement has been pushed back because of lobbying behind the scenes,” a trader said. “Lobbying may be delaying it, but the government desperately needs the revenue.”
The imposition of an export tax would have implications for chrome-consuming countries. Chief among these would be China, but other parts of Asia, as well as other markets such as Europe and the United States, would also be affected.
And this could lead to delicate discussions at a time when the South African government is also dealing with the onerous health and economic implications of the Covid-19 pandemic.
Additionally, within South Africa, the government will need to find a balance in the conflict between the integrated chrome alloy producers and the ore producers.
“There’s a lot that needs to be done before the tax is implemented, and the government hasn’t started any of these yet,” an alloy producer said. “They are focusing on vaccines and economic recovery at the moment.”
At this stage, the indications are that the government’s proposals remain in play - and possibly even on track - but it may take some time before the process reaches any conclusion.
In Fastmarkets’ poll of market participants, the majority of those on the buy-side expected it would be more than six months from December 2020 before a tax would be imposed.
At this stage, the buyers’ predictions appear more likely to be accurate than those of the sellers. It may be worth noting that, in the poll, only a handful of sellers - and no buyers - thought that the tax would never be imposed.

From Metal Bulletin, March 4th

COMMENT: No news does not mean South Africa’s chrome ore tax has been shelved

The chrome market was shocked in October 2020 when the South African government revealed plans to impose a chrome ore export tax, but the subsequent lack of news probably hides activity behind the scenes rather than indicating that the plan has been quietly dropped.

There was uproar in the chrome market after Jackson Mthembu, South Africa’s minister in the presidency, announced that the government planned to impose an export tax on chrome ore.
Proponents believed that it would bring much-needed tax income into the government, while boosting the competitiveness of the downstream ferro-chrome industry by adding to the costs of competitors, chiefly China.
And this could be achieved with minimal negative effects on South Africa’s existing ore industry because of the resource-rich country’s huge reserves.
Detractors, meanwhile, said that the tax would boost the competitiveness of other countries with ore reserves, such as Zimbabwe and Turkey, and harm South Africa’s mining sector.
They also pointed out that South Africa would need to make its electricity supply fit for purpose if it were to attract investment in its energy-intensive ferro-alloy sector.
Since October 2020, the South African government has been quiet on the matter, but speculation has been rife about the level at which the tax would be imposed and when, even if, it would come into force.
The majority of the sell side of the chrome ore market thought that the ore export tax would be imposed within six months of December 2020, according to a Fastmarkets poll of market participants published in January.
After months of silence from Pretoria, there had been speculation that South Africa’s finance minister, Tito Mboweni, would use his budget announcement on February 24, 2021, to update the situation.
But the budget speech made no mention of chrome ore, and months continue to pass since the original announcement.
This lack of news in the public domain has fed opinion that the export tax may have been quietly shelved, as has happened previously with other proposals.
A chrome export tax has been suggested previously, being widely debated in 2012 before it was ultimately sidelined.
While nothing definitive can be stated at the moment, there are no indications that the proposal has been dropped.
Instead, ChromeSA, a group of South African chrome ore producers opposed to an export tax, has taken the delay as a signal that the government is having second thoughts.
And it has asked for the government to engage with it.
“ChromeSA noted the absence of a reference to the chrome ore tax in last week’s budget, and hopes that this is an indication that the government is rethinking the proposal,” a spokeswoman for Chrome SA said. “The group continues to call on government to engage with us in order to look at alternatives to the proposed tax.”
...

https://www.cpmgroup.com/rhodium-backs-off-30000-oz-supply-concerns-still-main-issue/

JMAT have rhodium at $24,900 /oz this morning. That's down from a peak of $29,200 a few days ago.
Here's the link to their prices for all the PGMs: http://www.platinum.matthey.com/prices/price-charts
They update their price charts every day at 9am.
Kitco is mainly a gold and silver website. Its prices for platinum and palladium are accurate as they are taking them from the open spot market. BUT, I'm not sure what their rhodium price is actually tracking, since all rhodium is directly traded. Certainly, I've seen their rhodium price bounce around alarmingly and give some very odd numbers (e.g. in March a year ago).
Johnson Matthey (JMAT), BASF, and Heraeus are all PGM refiners. Their numbers are their public "ask" prices, so they might be a little higher than bulk buyers are actually paying, but they are based on solid market knowledge.
For myself, I'd be happy if rhodium found a level around $20,000 /oz and stayed there for some time - in much the same way that palladium has seemingly found a level between $2,000/oz and $2,500/oz. I think $20,000 is affordable for the car manufacturers, and won't encourage them too much to seek out alternatives.
There is a supply-demand price cycle at work here, of course - because there is always. But (IMO) it should be a slow one. Where is new rhodium supply coming from? Nowhere. How can demand be reduced? Well, not by thrifting or substituting out rhodium in ICE engines, that's for sure, since regulations demand it. Only by the car manufacturers moving en masse to producing 100% battery EVs (not hybrids, they are great for us). And that shift will take them (IMO) 5 to 10 years to make.

Hi Sandy!
That is NOT how you value a company. Actually, it's laughable.
You really know nothing about mining, do you?

Nornickel is something I know something about from a past life that may have been mine.
However, reading the brief statements that NN have put out doesn't leave me much wiser about how much damage the two mines have suffered. The permafrost is melting quite fast in the Kola Peninsula now (and in Siberia), and that can really mess up the foundations of industrial plant etc. If that's the cause of the flooding then the damage could be long term. (E.g.. it took something like 7 years to repair one section of the St. Petersburg metro when it flooded due to ground liquefaction).
Separately, NN's concentrator is also offline after a walkway collapsed and killed three people.
To give context, NN produce about 13% of the world's annual rhodium supply. And a fair chunk of its palladium output as well. So, yes, this is material.
BTW, did anybody else see the poll that flashed up during the presentation, asking if the price of rhodium would be $25,000, $40,000 or $50,000 in three months' time? Phoevos commented on it at the time, with a smile that seemed to imply he thought the rhodium price would go up yet more. I'd be happy if it did, of course, but I can't quite believe it can. I'm basing my own calculations on a medium term rhodium price of $20,000/oz. I'm not quite sure what rhodium price you would need to use to make the current share price seem "right", but it's a lot lower than that. Maybe around $5,000/oz?

Hi Oufc!
On a fingers and thumbs basis:
Rhodium revenue H2 FY2020 = 142,100 oz PGM / 2 (for half year) x 9.5% rhodium in prill split x $9,740 average rhodium price = $65.74m in "rhodium revenue"
Rhodium revenue in H1 FY2021 = 160,000 oz PGM (guidance) / 2 (for half year) x 9.5% rhodium in prill split x $18,300 average rhodium price (so far) = $139.08m in "rhodium revenue"
I.e. an uplift in revenue of $73.34m in half a year from rhodium production alone!

Rhodium coming off its highs now at $25,700 (JMAT). For those calculating THS's possible interim results, the average rhodium price over the last two quarters is $18,300 (with three weeks still to go).
In other news, iridium up another 10% at $5,500.

Hi Bhama!
It always amazes me how two people can watch the same video and come away with completely different impressions. But I guess it's our differences that go to make up a world!
Like many on here, I'm a long time SLP investor (since 8.2p!), and I love the company. But if you asked me to make arguments against it, they would be almost exactly those things you like about it.
SLP hasn't invested in organic growth since Project Echo; all its recent EPS growth comes from booming PGM prices. And its asset is a wasting one; current mine life is hard to estimate precisely, not least because production will tail off rather than suddenly stop, but 8 years would seem about right. This, to me, is a problem.
THS , in contrast, are willing to invest in productive new opportunities. I.e. Project Vulcan - $50m Capex this year leads to 400,000t per year of ultra-cheap chrome (i.e. @$72m revenue p.a. at current prices, most of which will drop straight to EBITDA). That's a good use of money!
As for PGM smelting, SLP send their material out to a third party refiner as well. And, if you go carefully through their accounts, you'll find that they pay more for the privilege of having it smelted and purified than THS do. ("Why?" is a good question. It's possible they are simply a smaller producer. Or it may be that the oxidised dump material is harder to smelt.) So I think bringing the smelting in-house is a very good idea.
Don't get me wrong. I'd like to understand more about the expansion opportunities that Phoevos talked about (i.e. Karo Platinum, Salene Manganese, and Greek nickel). But I'm far from hostile to the idea that to make money you have to spend money. In short, I want the company to grow, as well as to receive dividends!

Maybe the ice is indeed beginning to crack...
https://www.miningmx.com/news/base-metals/45222-botswana-names-preferred-bidder-for-shuttered-copper-miner-bcl-limited/
Botswana Diamonds and Burgundy to JV for Maibwe??? Is that where we are headed???
Anyhow, thank God that the new liquidator is getting on with the job!

Platinum demand...
https://www.kitco.com/news/2021-03-10/Growing-platinum-demand-to-drive-market-as-supply-flat-lines-for-the-next-three-years-WPIC.html

It's clear that the smelter gets a percentage share of the total PGM income, rather than a fixed fee for their services.
So, if the PGM basket rises (like now), the smelter makes out like a bandit.
Phoevos is clearly planning to bring PGM smelting in-house asap to capture this extra profit for Tharisa.

Hi JSB!
If you missed it, you should be able to log in and listen to a recording of the presentation.
I found it very impressive. Very clear and open answers to questions as well.

Hi Bananaman!
Dividend policy is "at least 15% of Net Profit After Tax". If you look at it historically, they've often paid a few per cent more than this. They don't seem to favour the year-end dividend, but pay equally between the interim and the final.
Given that PGM prices have rocketed upwards since October (especially since January), and that chrome prices have also improved, and that production is on target to meet guidance (which is higher than last year's actual achieved production), I expect that the interim dividend will be larger than the final one that was paid today.
Looked at in the abstract, a 15% NPAT dividend leaves Tharisa's dividend covered at more than 6:1, which is very healthy. The dividend only comes out as such a healthy return because Tharisa itself is so undervalued.

1. The chrome export tax has not been introduced. No dates or rates have been suggested. It may come, it may be shelved. I don't know the answer to that.
This recent article explains the position:
www.engineeringnews.co.za/article/south-african-ferrochrome-producers-divided-on-new-export-tax-2021-03-08
2. IMO, the chrome tax a really dumb idea. Since the problems that the ferrochrome producers face are extremely high electricity costs and unreliable power, help for them must start from there. The proposed tax is likely to be counterproductive for South Africa - less chrome exported, and no more ferrochrome.
3. Tharisa chrome AISC is currently $100/t against guided production of 1.5Mt. Production should rise next year to 2Mt as the $50m Vulcan fine chrome plant comes online, and Tharisa's chrome AISC should fall as Vulcan should be producing at ultra-low cost. Even if the chrome export tax is introduced, and it is really swingeing, I just can't see Tharisa being pushed into a loss on their chrome operations.
4. Get used to the "exceptional" PGM prices. They are the new normal for this decade.

Today was payment day for the last dividend - I've already received mine (via AJ Bell). And very welcome it was!
An interim dividend should be announced with the interim results in May. Tharisa have a policy of paying out no less than 15% NPAT, and given recent PGM and chrome prices and "on target" production, the next dividend should be a chunky one.
Still, though, I'm really here for capital appreciation, not for the dividends. This is a highly undervalued share!