Lonmin Share Discussion Threads

[billpap] 19/11/2015 07:03

Elvis since you like spending your day writing try this..Contact AMCU and ask them to press the central bank SARB to include platinum in their reserve assets..QE the south african way..Trillions of bonds and equities are bought by the major central banks the last years to save their economies..It will cost less than a billion USD for SARB to buy 1 mil oz of the metal and save thousands of jobs..And save PIC from the damage and wealth destruction they are doing to their other holdings implats amplats sibanye by saving lonmin..There is already talk about this in South Africa but they hesitate to do it..Platinum price is getting crashed in the nymex by banks and algo funds that manipulate everything..this is the real reason of the crash,not supply-demand..Open interest was 12-18000 contracts when platinum was above 2000 USD in 2008..it was 30-40000 during 2011 with platinum at 1800-1900..During 2015 and the price collapse it has reached 85000 contracts and is now at 75000..Banks are now short 20000 contracts,more than the total open interest during 2008 peak..Someone must wake up South Africans!!

[graham2405] 19/11/2015 07:01

"Why would TERP fall another 70% if the RI gets a Yes vote today?"

Academic, no vote, no issue.

This was just their estimate. I can't imagine that the terp price will be 1.40p

So, I can't imagine that the rights will be worth 0.40p

The must have mean't 0.40p ex-rights, which is pretty low?

That's why I questioned the..........

"Macquarie’s target would suggest a potential downside of -95.85 % from the company’s stock close price"

Yes?

[elvisrocks] 19/11/2015 07:00

You can't ask questions at a GM or agitate I thought, not like an AGM.
Thus questions I would imagine would be politely turned down.

[elvisrocks] 19/11/2015 06:57

Graham. On that last post with attachment you did last night you didn't comment but in the last paragraph it again confirmed PIC's wish to take up 32% of the shares.

>30% = mandatory takeover offer! (assuming they can get those rights). If they can't get them, demand = high, price goes up!

[graham2405] 19/11/2015 06:56

"How many people in reality will turn up to the GM? 50 max?"

Given the IMPORTANCE, I would not be surprised if a few SA hack's have bought a share to attend meeting.

There may even be a bit of interest from the major news channels here (especially if it's a NO vote).

It was of course a member of the FT100 (no, it really was), and part of Roland (Tiny) Rowland's empire.

It's going to be an interesting day.

[elvisrocks] 19/11/2015 06:53

Graham re Post 6058.

Your assuming a trading price of the share, effectively the TERP (not the right) of 0.40p which is a 70% drop to what you thought yesterday of 1-1.2p. Macquarie estimate is the value of the right not the TERP.

Why would TERP fall another 70% if the RI gets a Yes vote today?

[graham2405] 19/11/2015 06:48

Platinum $861 per oz.

Which is a decent rise from the low of $845 per oz yesterday.

Is this a pointer towards today's vote?

i.e. Yesterdays news encouraging shareholders to vote NO.

Will be interesting to see how the price reacts when the result is announced. I assume it will.

[elvisrocks] 19/11/2015 06:44

As early as soon after 9.30?

These things will be very professionally run for obvious reasons. Will start on time and allowing say one hour for votes to be cast, count up, second check and sign off maybe midday?

How many people in reality will turn up to the GM? 50 max?

[graham2405] 19/11/2015 06:41

"Graham or Careful. Saw an article last night which confirmed Macquarie were at GBP 0.40"

"They currently have a GBX 0.40 TP on Lonmin (LON:LMI). Macquarie’s target would suggest a potential downside of -95.85 % from the company’s stock close price. This was disclosed in an analyst note on Monday morning."

Note downside...........


I'd assume 0.40p, Ex-rights price (given potential downside mentioned of -95.85%).

Given the issues I would not be at all surprised to see an ex-rights price of under 1p per share.

A price under 1p would given no value to the unpaid rights (you could not sell them). Which would make things interesting. Because the lot would be dumped on the underwriters.

This is clearly possible given the precipitous fall in Platinum since the RI was announced.

We will know 08:00 on Friday, assuming the vote gets a YES.

[graham2405] 19/11/2015 06:31

"Graham, you did not answer my question earlier. Assuming 75% vote today, to carry the vote only 56.25% needed to carry the vote."

Yes, I guess, they need 75% of those that vote, so 75% of 75%.

Point?

I still believe that given the lack of support (only PIC have fessed up), a NO vote is possible.

Regardless, it will be close, IMHO.

Sometime after 09:30 we should expect a result. I'd be very surprised if the result does not come to light before the meeting ends.

Worse case the result will come @ close of play today.

As, they plan to trade Ex-Rights tomorrow.

[elvisrocks] 19/11/2015 06:28

Graham or Careful. Saw an article last night which confirmed Macquarie were at GBP 0.40 (not $). This must surely be their estimate of the value of a right not the closing pre RI price or TERP. They put out the note this Monday.

If it is then this is double Careful's 0.21p estimate of a right based on a TERP of 1.2p / pre RI price of 10p.

Someone will put me right if I've got that wrong.

[elvisrocks] 19/11/2015 06:15

Johnlee. Thanks for your post 6051.

That's why I put out my post following the quote in the JM Report to help explain to Graham and Mikemaxm why you have to consider the Pt price and XR together (and other input factors in the Business Plan for that matter).

They should be able to follow that now. At least they'll have to argue with the JM Report and not me if they don't!

[elvisrocks] 19/11/2015 06:11

Graham, you did not answer my question earlier. Assuming 75% vote today, to carry the vote only 56.25% needed to carry the vote. Those top 6-7 shareholders listed on Page 7 of the Prospectus hold nearly 50% between them, so maybe just needs the top 10 shareholders to vote Yes.

[elvisrocks] 19/11/2015 06:08

Does anyone have a sensible view if the US is now expected to put up interest rates next month what that will do to the Pt price?

Higher interest rates infers stronger $ which I think would mean better Pt price and weaker XR? All other things being equal I understand miners overall preference is for a stronger $.

[graham2405] 19/11/2015 06:04

"Well Graham, no RNS's indicating big shareholder fell below the 3% level. What does that tell you?"

Absolutely nothing..........why?

THEY HAVE THREE DAYS TO NOTIFY.

[johnlee5] 19/11/2015 05:33

We can't mention a hypothetical Pt price without mentioning the R/$ exchange. Can the Pt go down to $600? Yes if the R/$ goes to 20... But it definitely won't stay at $600 at the current exchange rate - more than 80% of SA mines (or 60% of world production) will be unprofitable and the SA government can't support that many mines, which means output will go down. Comparing Pt prices in dollar terms is meaningless without quoting the relevant rand/dollar exchange rate.

[lazyhisnibs] 19/11/2015 00:23

ravenna,

Some responses to another interesting post from you. It would be interesting to have Kojak's take too.

"The SA government may well support all of the Platinum miners"

I don't believe the ANC Government have the means. As far as I know the PIC used pension money to buy the Gov's 25% in VodaCom SA and now they are poised to end up with circa 30% of Lonmin. Eskom is a bottomless pit on a scale that dwarfs Lonmin.

"There was no change in bankers attitude that they deserve enormous salaries. There will be no change in miners demands." Not many would argue with that and certainly not me.

"The SA government have to accept that a major platinum miner will go bust, they will not as too many jobs are at risk. So it is up o the SA tax payer to support the Platinum industry."

Well, the Gov is considering a wealth tax but the tax base is small and an even smaller minority of participants are wealthy. Added to that more sovereign credit downgrades loom, to junk eventually at this rate. To illustrate how critical the situation is, after the oil price about halved SA's Government loaded fuel levies to such an extent that when the oil price made some headway back up for a while petrol and diesel prices flirted with all time highs at the pumps.

[lazyhisnibs] 18/11/2015 23:51

"Odd how no one seems to think that Platinum could fall and hold at 600 Dollars yet previous boom busts shows that this is exactly what could happen."

siwel3,

Anyone being honest with themselves if not with others must know that such a level is possible. Probable? Earlier this year an analyst's target for platinum at circa $800 was meet with howls of derision.

Whether there is coordinated mischief amongst a handful of big league market players I know not but I do not rule out the price of some commodities falling to levels that used to be norm in past decades before the SuperBubble. With China growing off a much higher base it would seem likely that supply and demand will get in to balance before then but no one can truthfully refute the possibility exists.

[pistol01pete] 18/11/2015 22:16

Was in at 140 for >5000 shares, harsh lesson! Would you take up rights issue if in the same situation?

[elvisrocks] 18/11/2015 19:40

Well Graham, no RNS's indicating big shareholder fell below the 3% level. What does that tell you?

If the vote turnout is (say) 75% and 75% votes cast needed, that would mean >56.25% to pass am I correct? Bloomberg indicates big institution holds 60% but Magara said nearer 80% if I correct on his SABC interview.

Would welcome your thoughts.

EDIT

Just re-listened to SABC interview. Top 20 shareholders make up 80%, SA/overseas split is 25:75 (year ago was 48:52). He also said "the majority of shareholders who are on the register today entered Lonmin 6 months ago and believed in the plan that was being put together".

[elvisrocks] 18/11/2015 18:44

LOL, John Lee.

Journalists, their lack of appreciation/content to the underlying item being discussed horrifies me. It seems to get worse each month. I picked two items from the JM report (could have picked others) and thought it through. Journalists just go for the grab a headline blitz.

[johnlee5] 18/11/2015 18:34

"The firm looks for a platinum supply deficit of 652,000 ounces and a palladium deficit of 427,000 ounces"

If that's the deficit when South Africa is "oversupplying" then I wonder what it will be like when South Africa starts under-supplying (refer to the platinum investment council's report which shows how mines have been spending less capital in order to cut costs)...

The way some "analysts" talk about "oversupply", I imagine seeing platinum bars at my local supermarket, on sale...

[elvisrocks] 18/11/2015 18:17

mikemaxm.

We can indeed continue this tiresome little "game" if you wish, but until you move on from your fixation on one number (and there are many other variables that make a profit and loss account), you will get no sympathy from me and I will continue to shoot you down. Try all the other actions Lonmin are taking (e.g. on cost) or better still read their slides that came with their webcast.

Your choice. If you continue to shout "fire fire", then I will continue to say or demonstrate to you there is no fire.

Up to you.

[mikemaxm] 18/11/2015 18:13

If idiots had brains they would have calculated that today 850 * 14,20 its only 12070 rand.

[elvisrocks] 18/11/2015 18:09

Graham and mikemaxm.

I hope Post #6041 now address your concern about the plat. price and why it is important but not critical. This comes from today's JM Report.