Lonmin Share Discussion Threads

[the_insider] 03/8/2015 09:07

UBS says it all imo:





A six-year low for platinum stoked the pressure on Lonmin, which is expected to be heavily lossmaking this year. Yet even if platinum group metals recover, shareholders are unlikely to benefit because Lonmin will need to reverse several years of under-investment, according to UBS.

“It remains unclear how Lonmin could transform itself into a producer with the ability to generate cash through the cycle,” said the broker. It said that since its 2013 rights issue, Lonmin’s annual capital expenditure had been more than $100m short of the $250m level needed to sustain its flagship Marikana mine, so ore reserves were at risk of deteriorating.

UBS’s base case was for platinum prices to recover from current levels though it cautioned that, absent a recovery, Lonmin might have problems refinancing a revolving credit facility due to mature in mid-2016.

[goldenfish2010] 03/8/2015 08:16

morning lads. will it break the 50p level today?

looks like it.

[dealy] 02/8/2015 17:32

The sell off from 100 has occurred on low cumulative volume. 10 days at 5m per day is 50m shares out of 600m shares and there have been no major holdings announcements. Also there has been no reference to lonmin substantial reserves which also forms part of the valuation of a resource company. Reminds me a bit of corus in 2003 although EM tailwinds helped

[lazyhisnibs] 02/8/2015 17:14

In a post above someone asked along the lines of how might SA's Government react to the looming redundancies. I've been wondering the same. Given their freedom fighter / for the people / socialist instincts and because of the socioeconomic implications which includes paying benefits where before there was tax revenue, I'm almost sure the politicians and the unions will persuade various household name employers (that get more media exposure than they probably like) to roll back their layoff plans substantially or at least extend the period over which the they take effect. The bulk of proposed redundancies (voluntarily or otherwise)I've read about emanate from Anglo American which announced their plans around the time Lonmin moved theirs up from 3 500 to 6000. As most here probably know Anglo's dwarf Lonmin's.

The Public Investment Corporation has been mentioned a few times here and I'm wondering if they are active in trying to persuade management not to do a RI or even if they can assist in that regard. Recently, they took a quarter stake in Vodacom. I forget the details but it was in the media and was of a significant value.

I'm surprised there hasn't been a pretty exciting short covering rally by now.

An article (link below) picked up from another site. A few basics are covered and some topical info provided.



------Supercycle type article in the Torygraph (link below)---------

Lonmin gets a brief mention.

[dealy] 01/8/2015 13:49

Just looking at an 8 year graph of platinum prices. It looks remarkably similar to that of oil and Anglo American. They all dived in 2008 before hitting bottom in early 2009 and then doubling over the following 4 years.

The prices of all of these are now back to where they were in say April 2009. What conditions lead to the surge from 2009 to 2014 (apart from escape from armegeddon) and why could they not be repeated from now until 2017?

In that scenario Lonmin would generate 1 billion USD in Ebitda per annum. The reserves are clearly there. Only problem is the commodity price.

[bouleversee] 01/8/2015 12:54

I wonder what all this has done to the price of platinum jewellery; not worth much now presumably. I can't bring myself to add up how much we have lost as a family with this wretched share, which we have all held for many years.

[dealy] 01/8/2015 11:02

Just read the transcript from the interim results presentation from May 15th (on their website). The team gives the impression of very much being on top of things. The closing remarks from Ben are interesting so I am posting them here:

Ben Magara, Chief Executive Officer
Think we are we done. So yeah, thank you very much ladies and gentlemen. Thanks forcoming through. We do have a tough operating environment and that seems to be
persisting. We are managing our controllables and as I highlighted the production, the costs, the capex, and we are making all the tough decisions with the realism of their consequences on our employees and social partners. And we hopefully are going to do it with all the responsibility that it requires.
But really I'm very comfortable with the debt facilities that we have got and we haveample room for it, and our smelters are running so we should be able to unwind the stock by the end of this financial year.

[pistol01pete] 31/7/2015 21:58

Been in since 140.00. Added again at 90.00. The mine assets are still in place regardless of Glencore dispersion and shorts following. Clearly a market movement rather than a company's position in business. Debt in reason and nothing to worry about. Wish I'd bought at 60.00 and added at the inevitable 40.00 but I'm more long term so no drama. Precious metal is precious metal and hoping a wise old man somewhere finds another use other than cats for this ever so precious metal.

[careful] 31/7/2015 15:47

we all talk of fundamental assuming the market has a logic.
but the prices are fixed by high frequency and short term derivative traders.
they own nothing, yet account for about 75% of all trades.

[dealy] 31/7/2015 15:30

I have the same thoughts. It's not just with this stock - although is the most extreme. Oil and Gas are the same. My theory is that we are not in a bull market at all - it's just that institutions increased their weightings of dividend paying stocks and mega caps to replace negative yielding government bonds. None of the QE money has actually gone into the economy in the sense that companies can easily raise money or can borrow money cheaply. It has boosted AAA financial assets and real estate. That's all

[the_insider] 31/7/2015 14:31

platinum price is reversing $995 currently.

[the_insider] 31/7/2015 13:17

7% down is a bit too much looking at the trades. Sp should bounce to 53p or so IMHO.

[dealy] 31/7/2015 12:24

There needs to be a merger of platinum companies this week to consolidate, strengthen operations and put a floor under the platinum price. If death is near such a response is possible.

[audigger] 31/7/2015 12:22

Snakes belly time........I haven't got the testicular fortitude to buy any more of these! At 10p we may see a flood of buyers!

[buywell3] 31/7/2015 11:40

''At current spot prices, Lonmin is burning cash at a rate of $240-million per year and might end this financial year with a debt of $380-million, according to Deutsche Bank analysts.''

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With ref to the above, the question is,

What will the SA government do about Lonmin and the mines it is closing down, and SA mining workers being laid off ?

[dealy] 31/7/2015 11:26

what a rotten industry it is when the product price isn't high enough to result in positive Ebitda margins. That is clearly not sustainable. Production will be cut on a global basis. We still have a rising population and rising global GDP.

[the_insider] 31/7/2015 11:24

it should bounce from here IMHO

[careful] 31/7/2015 11:22

down 7% on 1.3m shares traded.
how does that happen?
apart from everything else the overhang of the glen shares will take months to clear at this rate.
institutions will dump them at any price because of the embarrassment of admitting they own some.

[buywell3] 31/7/2015 11:21

OVERVALUED LONMIN(NET ASSETS ONLY Ј2.80 - LMI


buywell3 - 24 Jul 2015 - 02:38:25 - 1872 of 1980
Terrible chart

Terrible news

Lower commodity prices to continue it seems


50p anyone ?

[buywell3] 31/7/2015 11:20

The Skipper 7 Aug'14 - 19:22 - 1479 of 1647 0 0

With a double bottom on the chart and the price of platinum now out performing gold this has the makings of a great recovery play imo. The one year chart for the metal now has a clear price channel here: and will look even better when updated to take account of the current price of $1473 an ounce.

Opened position with 2000 shares today and will add as the recovery gathers momentum.

The Skipper 8 Aug'14 - 16:53 - 1480 of 1647 0 0

Movement pretty much as expected today, with a strong finish, so I added another 1500. Should test 240 early next week imo, maybe meet a little resistance just above that and then rock on from there provided price of platinum holds up.

Good luck all







buywell2 8 Aug'14 - 17:06 - 1481 of 1647 0 0 edit

Chart has just put in a double bottom

But it ain't out of the woods yet

[careful] 31/7/2015 11:16

Market cap £294m.
amazing.
platinum price falling again today.
asset prices mean nothing if they are not economic.
a gold mine on the moon etc.

[the_insider] 31/7/2015 11:14

We should see a bounce from current levels as shorters will be closing positions and running to the bank IMO.

[goldenfish2010] 31/7/2015 10:55

the largest shareholder of LMI seems to want the assets sell road instead of shares sale, RI. the question is if there is anybody wanting a piece at the moment?