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Thanks Jupiter - the interview hints the next quarterly update on 18 April could be a goodun

Does appear to have been a healthy end of month correction. Stabilised and PGM basket on the rise again. Palladium back above $1,400 and good to see Platinum rising without need for Gold. It seems to have been shackled to gold on rises, yet able to fall all on its own even when gold doesn't.

If true of course Blackfisk - just passing on what I read on another board, but not something I'm able to verify myself. Seems plausible, but maybe someone else can verify

I was reading on the Bluejay (JAY) ADVFN board that Capital Group is in process of divesting company shares with market valuation below 1Bn. For JAY Capital Group have 4.9% equity. For HUM Capital Group have 8% (28.1m shares).

They states it's for the fund's own personal reasons because the fund manager has retired and the new fund manager has introduced this new investment policy threshold.

Could this be part of the reason for the drip drip in HUM share price from 24-25p area and the considerable sells we've seen (4.2m recently, consistent round 250k sells)?

The radio silence on progress/ completion of remedial works does not help (albeit we do know for Jan-19 they were on track for 10K Oz as per Q4 18 report released on 30-Jan), but perhaps this also explains the malaise?

If it's true I doubt Capital are done, so could be some more choppy waters ahead short-term. Long-term, once they're done and if this sp malaise is not due to fundamental issues at the mine site and production truly is back to a 110-125K Oz guidance, could be great time to invest after Capital are out.

A lot of "ifs" and "buts"...

I should update as I did reference Rhodium. In US market it did reduce down to $3,100 in the end, so 7% off the $3,350 highs.

Let's see what April brings.

I tend to think it's just natural selling, due to multitude of factors:

1) Palladium has been pounded down in 2 trading days from $1,600 to low of $1,300 ish intra-day (now recovered somewhat at $1,360). Natural this may cascade to investors in SLP.
2) Coming to end of UK Tax year. People may sell for their own personal reasons.
3) Great run in the last month on SLP, so people just booking profits

Long-term the story remains unchanged, but short-term I can see why some would sell.

Rhodium which can't be traded on exchanges (you would have to buy physical itself) has been relatively unmoved these last few trading days, at $3,325 Oz (only $25 off its recent multi-year/ decade(?) $3,350 high). That makes me think nothing major long-term has changed on the supply-demand side and palladium simply got ahead of itself with traders piling in on the bandwagon. Palladium backwardation and lease rates have eased off considerably, which implies in short-term the palladium supply constraints have in turn eased and not as drastic as market was implying. But the fact we still even have backwardation implies supply deficits.

For SLP, nothing fundamentally has much changed in long-term and still remains undervalued. The SLP basket price is still very high at $1,285 Oz. And ZAR continues to weaken, now at 14.6, which assists with lowering SLP's AISC in US dollar terms. However the Eskom load-shedding may counter any benefit SLP receive on the ZAR weakness, as SLP production may be less than expected, in turn pushing up AISC per Oz. Any negative from Eskom load-shedding and lower production should hopefully be offset by ZAR weakness and higher basket price, but lets see come 30 April when next quarterly report is released.

For majority of calendar Q1 19, basket price has been north of $1,300. Even at today's $1,285, this is $80 more than the $1,204 oz basket achieved in calendar Q4 18.

Not quite jam today. $24m Capex and 12 months later and then you can say the jam has arrived. Unfortunately based on JLP's track record, both those figures could escalate exponentially.

On track record, the market no longer simply trusts JLP statements, particularly on timelines! Even from company's with exceptional track records, with this type of RNS a Feasibility Study or at very least Project Economics Report is required to back-up the high level assumptions.

Great news on Sable Acquisition itself and Government Approvals confirmation, but the financing is an absolute joke, with 36% dilution. If the unaudited quarterly "earnings" from current operations are so rosy (£12m annualised), why do they need $22.5M now?! They of course need $12m for Sable acquisition and perhaps another $2m for breathing space, but the rest of the Capex should be funded from cashflow or loans over the next 12-15 months.

It's also frankly bizarre Riverfort are listed as a "Corporate Advisor" to JLP in this very RNS, yet the much touted $50m Riverfort facility contributes fook all to this deal. Did it not pass their Project due diligence stage gates?

JLP need a decent well-connected Finance Manager/ CFO. This is a great deal and should have easily been financed from loans if it was managed by someone who knew what they were doing. Feels like an epic miss and whilst still good news, should have been great news if handled properly.

Hi Ragnar - thanks for this very interesting read.

The Palladium ETF Chart at bottom right of 1st page is indeed the most interesting thing. When you say "terrifying", speaking purely selfishly in terms of SLP, I assume you mean terrifying in a good way?

It shows that in 2015, the ETF holdings of palladium were 3 million Oz. Now in Q1 2019, they have dwindled to only 700K Oz! To me this once again confirms the long-term fundamentals of Palladium are solid. That there are huge deficits in supply so the physical palladium holdings have had to be run down. Normally I would expect with such a huge run up in palladium price, ETF holdings would increase with investors and speculators piling in on the bandwagon. I don't doubt in short-term palladium is susceptible to speculation, hence we see major moves up and down. But it does proves palladium really is being depleted by end users for consumption.

It also shows at start of 2018 the ETF holdings were circa 1.4M Oz. So if there is now only 700K, if it carries on based on this current trend, what happens in 12-15 months time if all ETF palladium holdings have been "leased"/ depleted and no physical exists?!

It really must be terrifying for car manufacturers and surely a reason that to ensure security of supply, to try and switch to platinum in gasoline catalytic converters.

It may also be terrifying for anyone invested in a Palladium ETF that isn't backed by actual physical Palladium on a 1:1 basis! Or even those invested in physical palladium who have not read the small print if their palladium is being "leased" or based on fractional principles.

RB - on your original query on Silver Stream Agreement (SSA), a lot of these royalties/ streaming companies are based in Channel Islands and low tax jurisdictions (Bermuda, Caymans, BVI etc.). All standard.

In terms of the SHG's SSA, under previous management (Toby B), in May 2016 (refer to 6 May 2016 placing RNS), SHG entered into SSA with Silverback, to receive USD 5.25m cash (received in Nov 2016 as per later RNS) and in return SHG is obliged to deliver minimum 608,970 oz of Silver over a 6.75 year period. It is solely related to the physical delivery of silver, however this liability to deliver silver must be accounted for in the books. There is no actual interest paid on top of the physical silver, it is a notional interest rate for accountancy purposes only which is calculated based on spot silver price. All miners who enter into Streaming Agreements account for it in this manner, even the big boys like Barrick.

If you divide USD 5.25m by 608,970 Oz, this equates to only $8.6 per Silver Oz. On top of this SHG do receive 10% of the silver sold at spot price. So for argument sake if silver spot is $15 per Oz, in total based on this SSA, SHG have agreed to USD 5.25m upfront by selling their silver to Silverstream for circa $10.1 per Oz.

On the face it is a terrible deal compared to silver spot price, hence the notional interest rate in the books appears so high. However it was at a time SHG were in the middle of their peak Capex period for underground mine development (between 2015 to end 2017, circa $120m of Capex spent) and both placings and debt facilities were secured - SHG at the time may not have had the flexibility for additional debt. So see the SSA as a necessary evil for the time we were in and "bird in the hand".

Whilst the term of the SSA is 10yrs in total, as per the Accounts "the Company has no minimum ounce obligations after 2022". So I assume/ hope once they achieve 608,970 Oz, SHG can terminate the deal or simply let it become dormant/ redundant.

I'm not sure if the deal kicked in May 2016 or when SHG received payment in Nov 2016. But I would assume May when it was announced. For 2016 SHG produced 126,572 Oz of silver (so 50% under SSA 63,286 Oz). In 2017 and 2018 SHG produced 106,238 Oz and 106,851 Oz respectively. So in total SHG may have delivered circa 276,375 Oz under the SSA. So SHG probably has circa 332,595 Oz of silver left to deliver under the SSA. That should mean based on 106k oz silver per year, by Q1 2022, SHG should clear the SSA.

And another million buy late today

Ragnar - think you've partly answered your own question!

Like you state with free cashflow after tax of around $23M for 2020, that is 20% of a market cap at 30p (PE of 5). The free cashflow is likely to be more based on this basket price, current ZAR weakness and if 80,000 OZ p.a. can be achieved.

SLP already have 1 years earnings in the bank ($20m+), sizeable trade balance in their favour ($18m) and in consideration of circa 15yr production life and dividends, a PE of 7 is more than fair, which would be 44p (or PE of 6 normalising for cash in bank).

I'm obviously not expected this tomorrow or this calendar year, but if they do indeed start to pay substantial dividends next FYE Jun 2020 (10%+), basket price maintains this strength and they can hit circa 80,000 p.a., see no reason it can't hit 44p+ onwards and even overshoot this, particularly if it's paying such meaty dividends. The Capex for FYE June 2021 and June 2022 is circa only $3m and even with 10% dividends, by then unless they've used the cash accumulating in the bank on growth opportunities (M&A or organic growth), cash in bank will be huge and special dividends would then be on their way.

This is even before you consider a market default by one of the exchanges of physical delivery of palladium and the price exploding higher, along with Rhodium.

I would at least like to see Liberum's target of 35p hit within next 6 months. If in new FY starting July 2019 they confirm 10% dividend yield (split across interim and final dividends to), leading up to first dividend I could see it hit 40p.

However if they do not deliver on either fair dividends nor deliver a clear growth strategy (I don't mind if there's not a 10%+ dividends as long as it's used for growth acquisitions like Lesedi, but needs to be clear), I can see SLP stagnating in the 30s. SLP are in the enviable position of paying out sizeable dividends & having cash for M&A. This is why it's key all shareholders lobby SLP to ensure reasonable dividends are provided to shareholders to realise true value.

On LSE and ADVFN a lot of the buys are showing up as sells. I should know as bought a fair amount the last 2 days. And it's not like my buys were below the mid-range point so not clear why they showed as sells.

However I don't think the President signing Dugbe MDA has any major bearing at present on most people's investment in HUM. And I have to admit it doesn't for me. Dugbe is far too big (both commercially and from a poltical risk perspective) for HUM alone. The major leftfield news that would really propel HUM is if on the back of the executed MDA, later in the year we agreed a Joint-Venture/ Farm-in with a major who would take a majority stake.

Or indeed with HUM at a market cap of only £82m, with Yanfolila producing and a Dugbe MDA in place, they may just decide on a take-over. There appears plenty of M&A activity at present in the gold mining space.

The major reasons I've topped up is I'm quietly confident the major issues we had last year are behind us and we will be back to capacity. A risk I know in assuming this before Q1 is finished and results released, but hence the HUM sp with this risk baked in.

To my knowledge HUM is also un-hedged and so will benefit from the increasing gold spot prices.

I meant $32M free cashflow before tax. So $23M free cashflow after tax.

But if these basket prices hold, likely to be much more than this.

With $20+m cash in bank already, another $18m positive trade balance in SLP's favour and circa 15yr production life, $100M market cap grossly undervalues SLP.

Normalising for cash in the bank, SLP is on a PE of around only 3.5

Ragnar - the beauty of SLP's EBITDA metric is it is also very close to its actual cashflow, unlike other outfits.

They have no debt of course (so no interest payments) and Capex is very low after June 2019. So the only thing to bear in mind to get SLP's cashflow is to deduct the minimal Capex and Taxation from EBITDA.

There are many other miners who publish striking EBITDA on the surface, but have huge Capex and Interest repayments outgoings.

As an example SLP's estimated EBITDA for next FYE June 2020 based on 80,000 Oz p.a. is $40M (should be noted that was forecast on a basket price of $1,139 and we're now at $1,300!) and a Capex of only $8M. So free cashflow before tax of $38M. Depending on D&A to calc tax (circa $6M), SA Corp Income Tax of 28% could be circa $9M, so you're looking at $29M free cashflow after tax. And that's even before you take into account the increase in basket price since the SLP Feb 2019 presentation. The EBITDA will be more like $45M with the basket and ZAR in SLP's favour since presentation.

Suggest people have glance at SLP presentation, particularly page 20:

http://www.sylvaniaplatinum.com/im/files/documents/Presentation%2018-22%20Feb%202019%20Final%20FINAL.pdf

Whilst more volatile, SLP's PGM basket is currently more than spot gold price now. For those new that might not know the breakdown of SLP Platinum Group Metals (4E) basket price per Oz:

Platinum: 62.7% ($825)
Palladium: 24.5% ($1,545)
Rhodium: 12.6% ($3,195)
Gold: 0.2% ($1,295)

= $1,300 per 4E PGM Oz

SLP do have "by-products" Iridium ($1,485) and Ruthenium ($275) which make up the "6E PGM Oz". And each quarter they provide metrics on 6E basis too, but 4E PGM reporting is the primary reporting. It should be noted others like JLP and THS report on a 6E basis and if SLP did this, comparing like for like, SLP's production would be over 100,000 Oz p.a.

Sustainable actually already had 9%, so they increased their stake to 12% and pretty much took up all of CF's shares that were forced to sell for their own personal reasons (administration).

4 Institutional Investors have some 50% of SHG shares. Another 10% are with the Board and/or previous advisors. So that leaves only 40%. So if another II is on the scene or one of the existing 4 want to increase their stake, it is likely to have the type of effect we've seen today. Particularly if speculators jump on the bandwagon.

However if this move is based on no actual news, could see bit of a healthy pullback. See what tomorrow brings.

With Palladium & Rhodium priced as they are and SLP's low AISC coupled with low Capex, this beats any other precious metal miner for me, including the gold miners I'm invested in that I'm very bullish on in long-term.

SLP is incredibly under-valued already based on current basket price of circa $1,300. It was under-valued in my opinion with a basket of $1,200!

And this will simply get more exaggerated if Palladium and Rhodium keep pushing higher.

Perhaps its time for shareholders to email SLP management for clarity that if based on this basket price and subject to production in 1H 2019, a final dividend will be provided before FYE June 2019. A 2% final dividend would only represent circa $2m. SLP should still end up with a cash balance exceeding $20m by FYE!

I also believe Plat will struggle in comparison to its PGM brothers Rhodium & Palladium. It may get a pick-up in investment demand on gold's coat tails, if gold can rise past $1,300 again after the weakness in US jobs numbers. One swallow doesn't make a summer and the poor data coming out of US may be as result of Government Shutdown and winter period, but it doesn't bode well.

As SM says Rhodium over $3,000 and Palladium whilst more volatile, still over $1,500. Rhodium which is not really traded outside of actual end-users appears to demonstrate the price increases are based on fundamental supply v demand and bodes well. Although need to keep an eye on the slow down in auto sectors. Perhaps such slow down will be offset by the more stringent emission regulations and increase in PGMs per car.

SLP basket price remains strong at circa $1,265 per PGM Oz. The ZAR has weakened to 14.4 against USD too, which will help lower AISC in USD terms and increase the margin to SLP.

Subject to production, based on these basket prices I honestly think we are due a final dividend from SLP board for this FYE June 2019 and they could announce this with Q1 2019 results end of April. I was somewhat surprised by the singular reference to "dividend". There should be 2 dividends per year and I still think with $20m cash in bank, they have more than enough headroom to pay out another dividend this FY too, cover Capex, working capital movements and rainy day risks (Eskom load-shedding which may impact production).

IC with a short piece on SHG:

https://www.investorschronicle.co.uk/tips-ideas/2019/03/01/shanta-gold-plays-vat-waiting-game/

"Against a flat gold price and a slight dip in recoveries at its New Luika mine, Shanta Gold (SHG) managed to double post-tax profits in 2018, thanks to a steely eye on cash costs and a sharp pull-back in capital expenditure. At the same time, net debt was reduced by $8m (£6m) to $31.5m – the lowest level in six years.

The operational momentum shows little sign of slowing. After surpassing production guidance for 80,000 ounces last year, Shanta now believes output could rise to as much as 84,000 ounces in 2019, while containing all-in sustaining costs between $740 and $800 an ounce. Asset-level funding has also been sought for the 26,000 ounce-a-year Singida project, which Shanta believes could provide an internal rate of return of 67 per cent.

There is evidence, therefore, to back up chief executive Eric Zurrin’s claim that 2018 was "a transformational year" from both an operational and financial standpoint. But you wouldn't know this from Shanta’s share price. That’s because un-refunded VAT receivables rose another 48 per cent to $21.8m, further stretching the gold minnow’s balance sheet and cash position.

Numis forecasts a pre-tax profit of $7m and earnings per share of 1¢ this year, rising to $24m and 2¢ in 2020.

IC View

As Barrick Gold and Tanzania inch towards an agreement over Acacia, we think the real beneficiary could be Shanta, which expects VAT refunds to follow a deal. The large proportion of borrowings listed as current liabilities remains a concern, although major lender Investec is supportive, presumably because it sides with our original call (6p, 31 May 2018) that VAT resolution could help correct the shares’ 50 per cent discount to net assets. Buy.

Last IC View: Buy, 4.85p, 17 Aug 2018"

Liberum have raised their target to 35p.

This makes sense considering the continued strength of the PGM basket. Even Platinum has caught a bid and is now at $870. Rhodium is up to $2,795 and Palladium $1,540.

This provides a basket price of $1,278 per 4E PGM Oz.