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Rhodium is most likely being driven by China 6 implementation in Jan '21 for light vehicles and then heavy duty vehicles in July. Add to that the European emissions are tightening and an increase in Hybrids which all have higher Rhodium loadings.
You could read that as once stocks are higher then the price will stabilise / drop, however Rhodium remains in deficit so those stocks won't last and supply and demand will find a balance for the price. Who knows where that will be but we may find that with increasing yearly deficits, the higher pricing range is here to stay. Let's hope so !

It did TBTT, forecast to increase this year though closer to 2019 levels but the Rh deficit is forecast to continue. I have taken the average of Impala, Amplats & Sibanye and the Rh deficits are in koz:
2020 - (80)
2021 - (25)
2022 - (75)
2023 - (125)
2024 - (130)
2025 - (200)
These are large deficits when taken as a % of demand. Such large deficits will force countries (companies) to try to stockpile if they can i.e. to buy as much as they can get their hands on. With such strong demand the high price environment is the new norm.

The problem when we check THS's fundamentals is that every time we do so they are significantly better but the SP has not moved or has moved lower. It is not a PGM outlook or country risk weighing on them otherwise we would see stagnation across all SA PGM producers and we do not. There has been a large seller which is not helped by Director sells over the last 12 months plus.
It is just one of those shares that is going to take a little time to get moving but the fundamentals are becoming stronger by the day and that time is approaching. I have the Q1 EPS at 8.2p @ 1.41 £/$. A conservative Q2 I have at 12.5p and that allows for a large erosion in the basket price for March which looks incredibly unlikely. So a H1 EPS of circa 20p less any exceptional items which I can only see being an increase in reserves on the balance sheet.
Those 6 months alone give us todays share price at the usual smaller company SA P/E of 6.
It is a waiting game with THS. It is not the MM's responsibility to attach fair value to share, merely to make a market. I would argue with a large seller and plenty of buyers that the market is available at a much higher SP.
Sooner or later the pressure will continue to rise and the MM's will also be put under pressure to make a market at a higher price.
Until then it's a waiting game.

I appreciate that there was an expectation of fireworks after the interims with the PGM basket price increases of late. However, the Net Profit figures were already known from the production reports. What we didn't know was why they were quite frankly as low as they were.
The cash costs have increased and will continue to be a burden until the end of FY'22 but that is only a very small explanation of the financials. In essence the board has taken a very cautious and conservative approach - one I agree with. They have taken the opportunity whilst times are good to put money away for a rainy day and increase the strength of the balance sheet.
Cash was not as good as it should have been but that is simply down to trade receivables - a $32.4 net outflow or a change of $40m from the corresponding period last year.
Reserves have increased by $20m covering future unknowns.
All in all the 6 months showed exceptional growth and the board was able to show the increase in EPS whilst adding to the balance sheet. This paves the way for a very good Q3, most of which we can predict already.

I'm not sure that the how much the Chrome Tax is holding THS back - most people will not understand it or the impact on profitability. It's about trading volume for me i.e. interest in the company. The Stockopedia report being a typical example - hardly any comments about it from investors on the Stockopedia discussion board.
The volumes for THS are about 1/10 of the volumes for SLP and are about where SLP volumes were in late 2019. I think TBTT mentioned in the last few days that SLP used to be similar with little interest until the fundamentals became too good and eventually it got write ups everywhere and as such investor interest.
We may have to wait until the interims are reported when it will become glaringly obvious at how undervalued THS is and naturally will show on the likes of Stockopedia with it's low P/E and PEG. Then later in the year the large cash generation will become more apparent. We should then start to get some traction on the investment sites and hopefully THS start shouting a little about their performance.
Of all the shares I own and research daily THS remains the most undervalued with known risks. The re-rating will come, it just depends when that is.

Also key is that JLP basked price for January is still 20% higher than the final quarter average of 2020. It's 43 % higher than the previous quarter as well.
Even if Rhodium softened to $13,000 / Tonne, the numbers are still exceptional.
Chrome is doing well, we all know where copper is and the margins we will achieve.
Very little tax on the interims because of the tax rebate and a whole load of "Fair Value Adjustment" to be released because of increases on the Balance Sheet with recent purchases - I don'r really like the FVA since it's not real but it makes the numbers look better at first glance - most likely it will be added is H2.
The Rand is more favourable against the $. Couple that with the CFO's job to mitigate exchange issues will see the $12m Forex loss hopefully disappear this year massively helping the cash position.

Maybe a bit of exchange in there Bangrak but I'm happy with the numbers. I recognise you from the SLP board, I don't post on the board but appreciate the comments on there. Both companies will have fantastic quarters and currently this quarter has slightly higher basket prices but all looking good.
When you run the JLP numbers, even at a lower basket price and then add in the copper at a conservative $6,200 / T, the numbers are incredible for both EPS and cash generation.

Are you referring to NP Bangrak as opposed to Gross Earnings that JLP refer to? For me the numbers have come in almost bang on expectations, just very slightly higher on the PGM side. I have tracked JLP's PGM basket price over the quarter and had it at $1,926, less than SLP's at $2,444 due to the Rhodium content. JLP's is slightly more complicated since the don't get all of the earnings from PGM's due to third party tolling- I had the percentage at 78% but it would appear to be over 80% as more of our owned material gets processed.
Chrome was the unknown due to the new agreements - I took a conservative view at $500k for the quarter but it is good to see it much higher than that.

Tom Winnifrith has just slated Novum securities on Hot Stock Rockets and issued a sell rating for XTR forecasting a placing is due.
His recommendation originally coincided with the recent rally in XTR.
To date he has tipped pretty much all of CB's companies but the love affair appears to be over with TW getting pee'd off with CB's continual placings.

Interesting that when he talks of the busy year ahead Chrome, PGM and Copper get a mention but nothing of Zinc and Lead. I think we will be the back end of 2021 and maybe even 2022 before we process Zinc.
I believe a new tailings Dam is part of the process at Kabwe and whilst I recall a mention of it I don’t recall much about the progress. Anybody else recall the details?
Taking into account the focus on copper now I wonder if the strategy will change to process the Kabwe tailings as quickly as possible rather than maximise the profit with supplementary ore so that the focus can return to copper - any thoughts??
Equally the Pb was after Zinc, do we even need to process the zinc to tidy up the lead? Not the most profitable way but leaves Sable capacity for Copper??

Thanks Jammer - quite correct £1.7m, I was going from memory - never a good idea !!

I always find it very difficult to work out JLP's actual margin on the PGM's the numbers change quite dramatically from Q to Q - as in the costs per Oz and revenue per Oz. I have a spreadsheet that should calculate the profit for me and even have a variance built in for the 3 exchange rates but even so it never quite works. I put a lot of that down to the volume changes that have occurred within Windsor & Inyoni and within that the profit share that has affected the numbers, although of course that should not change the unit costs apart from knowing that Windsor is 24% more expensive.
In reality I think the variances come down to the timing of costs and revenue - costs are pretty much within the quarter they occur whereas revenues not necessarily so because of the way smelters work so there is an ongoing correction factor.

In essence it is very easy to get bogged down in the detail. In general I am value investor that uses Graham's methodologies and only invest in AIM as a gamble - a bit of fun. JLP has ceased to be that and now fits in with value investing although not in its purest form. One of the keys is do you trust the management or not and I think in LC we have a very valuable asset who will push the company forward in a controlled manner so the exact numbers or cashflow do not matter so much - we know we are producing plenty of cash, we just don't know if it is enough in the short term but we have a great balance sheet to fund the growth - LC will definitely know the answer to this.
The question often comes us as to whether LC is truely committed because he has not purchased shares and thus has no skin in the game. If memory serves me correctly (again not a good idea !) but I believe he has 23m options on the table that start to expire from next year. That is 23m reasons to try and keep dilution to an absolute minimum - every dilution affects him more than it affects us.

Hi Jammer - this is how I see it, but as always the timing of the payments is not known so it is purely an estimate and of course my opinion.

Elephant - $25m - $4.4m equity, call it $20m for simplicity. In terms of timing we only know that the concentrator needs to be built within 15 months. I have allocated $15m over the next 18 months with the remainder following in phase 2.

ROAN - $15m over the next 12 months.

Kabwe Zinc & Pb circuits - it is unclear how much we have spent since the last update on the capital costs on this so I have estimated $10m still to come.

Fine Chrome Relocation and set-up $3m, my estimate.

It is very easy to add $10-$15m to this number or to subtract $10m due to the timing of payments. Whilst the numbers are significant I think the most important point that i am raising here is that JLP will need to use it's balance sheet to fund the projects unless a windfall arises - personally i think an unlikely windfall because the desires of the 2 parties negotiating on Tjate are different but LC may have a very different view and may view that a much smaller bird in the hand is useful at this stage of JLP development.

The other point is that whilst projects may get signed in the near future I would be surprised if JLP would spread themselves too thin on the cash flow front by committing to projects that need Capex in the short term. I believe it was your comment a while ago on $1.7m cash generation within a month which I agree with but I am not sure if that is a sustainable amount in the next few months or a one off. Once Copper ramps up next year (and I see it later than the WH Ireland projection) then we should easily pass the $2m a month mark and move on from there.

I don't think it is really anything new that JLP are negotiating with its major neighbours as well as other corporations about the sale of Tjate. A deal could be done tomorrow and would be in the interests of all. However, there in lies the problem. JLP don't want it and could do with some extra cash over the coming 18 months , whilst the purchaser would like to buy it based mainly upon a future royalty with a small token payment upfront.
My estimates show JLP to have a capital cash burn averaging $2.4m a month over the next 18 months and currently they do not generate $2.4m per month, however they will within the next 18 months. So an extra cash influx would be useful but not essential - I totally agree with LC that JLP can easily fund off their balance sheet and $10-20m would not be a problem.
The purchaser would like it as a future asset but would certainly be cautious about the PGM demand & pricing in 5-10 years time so a royalty payment would suit them. We know the Tjate mine is expensive to develop as a standalone mine but we have no numbers on what the development costs are for say Impala to mine it as an extension of their current operations. This is the due diligence that they will be undertaking - if that number turns out to be lower than expected then JLP would be able to negotiate a higher than expected upfront purchase price but also the flip side scenario is true. Personally I would forget the thoughts of many tens of millions of $'s - a deal in the range of $10-20m would be an exceptional result for JLP and allow them to move on and away from Tjate to concentrate on what they are good at.
As for future JLP announcements - LC stated in his last interview that a deal was close to process DCM tailings at either Inyoni or Windsor - he expected the announcement in July.
I think we will see other projects announced in the next 6 months on both copper and PGM's but with the current cash burn I would not expect to see anything that will cost capital within the next 12-18 months.
In my view JLP now have a full plate - they have some work to do on their PGM strategy around Inyoni, Windsor and DCM, 2 copper projects to undertake plus fine tuning work on the copper and cobalt circuits at Sable, a fine chrome plant to install possibly followed by others and they will have to get the Zinc circuit sorted to be able to clean up the Lead at Kabwe.

In the previous LC interview he spoke of expanding Windsor capacity or in his words "upgrading the capacity very soon". No mention was made of the volumes but looking at the WH Ireland broker note there is a considerable increase in Chrome throughput coming on stream over the next 2 year.

He also spoke about absorbing Windsor PGM into Inyoni within 2-3 years since Inyoni processing cost / Oz is 24% lower than Windsors.

On the RNS today I like very much like it - not because it really offers anything that was not known from a likely projects & timescale perspective but because it adds some meat onto the bone in terms of Gross Profit and clarifies how Sable's capacity will be expanded.

Looks like somebody else thinks so too - you don't buy that many in a day unless you know something........

Gavster,

My average is a bit better on Evraz - in the 240's. It will recover and very strong. The Iron Ore prices are doing very well and production levels are good so I see them easily beating last year earnings. Coke will be down but who cares about that.

On Gal - discussions are ongoing and fingers crossed. The MM's will take shares and I believe they are holding a few so the only way they make money is if the SP rises.

Hi Gavster - hope you are well - I see we share at least one other investment in Evraz.

Indeed this is high risk and it is at a point whereby it either mines or gets mothballed for a number of years. Every month that the world remains in turmoil with continents bickering away is another month of high gold prices and that is one step closer to a company stepping in to help - and trust me the conversations are taking place. Personally, I think RP is a good mining engineer and problem solver but he vastly underestimated the funds to get into full production - with this he needs help or he needs to take a back seat.

In terms of cleaning up the mine. Unless things have changed since I slept, mines get cleaned up at the end of their life and not whilst they are still mining !! A proportion of the profit is set aside on the balance sheet for restoration and dilapidations. If some people think this mine is a mess, wow, they really need to get out and view some other mines. And of course you are quite correct - no mining = no profits = no restoration - perhaps this is something that the local anti-mining brigade on this board should think about - alas more wishful thinking but at least there are filters !!

All I can see these days when I come on this board is filtered posts - more to follow I am sure !!
So a small placement, not significant in it's value but 3 funds have invested. All 3 will have undertaken their due-diligence. Maybe, their is life in the old dog yet !!
For those that are worried about some of the debt and working capital deficit posted - it may appear to be a large number but even on a low 10,000 Oz per year the difference between $1250/Oz and $1,800/Oz is £4.4m per annum straight to the bottom line. It does not take long to fund the company and pay off the debt.
Galantas is now simply a company that if you believe it will mine then it is worth an investment. if you think it won't then quite simply don't invest. If not invested it would be good not to post to clear the noise - but that is just wishful thinking.
3 funds have put money in - they believe Galantas will be mining.

The Unaudited Interims show a closing cash balance of £10.2m as of 31st Dec 2019.
Cash position to 30th June was £10.8m.
£1.4m spent on PGM & Cr rights purchase and £2.5m spent reducing debt.
Thus minimun cash generation was £4.5m for the 6 months to June 30th.

Slight variances will occur due to exchange rate but much larger ones due to the timing of when payments were received.

Hi BillyBoy,
1) In terms of funding the RNS states any further funding i.e. the $25m. JLP would have to be the worst business men on plant earth to not include that in their deal. So the JV will need to pay off all of JLP investment at a multiplier plus interest before any profit is shared out amongst the JV.
2) To expand on MH's points. The 35% margin is from our own tailings and simplified covers dig, move, crush, compact, flotation / electrolysis and refine. I.e. the whole operation to get the operating margin. What we do not know is the Cu % so we don't know how much rock (tailings) have to be processed to get each T of Cu. This is important because with the tailings from the JV we also do not know the Cu %, if it's lower then the margin should be lower and consequently higher if the % is higher. The transport (move) costs will also be higher.
So all things being equal the costs of the JV should be higher but the Cu grades will have the biggest impact and also JLP will be building a plant specifically for these tailings so the % of material that can be extracted could also be higher.
As with all of these projects there is a certain element of the unknown. I tend to work out the top level numbers from the information gives and then multiply by 0.6 to give a safety factor. It also covers me for some of the extra costs that are not covered within the operating margin.
Hope that helps a little.