Lonmin Share Discussion Threads

[kojak78] 19/11/2015 18:11

Whatever will happen in the next three years, I am glad that the vote went through and Ben gets more time. He only had 2 years so far, not enough to really make a lasting impression on a company. So next time Lonmin is in trouble we can blame Ben.

The vote means Lonmin has left its bankruptcy position which was caused mainly by its relative position with a weak balance sheet in comparison. Now Implats will struggle. A company that probably will not go bust but that is much more expensive now than Lonmin and that without reason.
And of course Sibanye. Huge debt due to empire building by Neal. Restart of normal levels of capex spending at Rustenburg, cash flow negative gold mines with the NUM agreement and with an Amcu strike looming. One of the conclusions of the Marikana massacre is that a company can not insist on non-striking workers going to work when there is a strike ongoing or there will be a huge safety liability. That means the 50% Amcu workforce will bring Sibanye to a standstill. The R4000 per month and per worker Amcu demands will lead to huge annual losses at Sibanye.

Lonmin is now protected because there are two larger, financially weaker companies. Their production guarantees that ultimately the platinum price will rise before Lonmin runs out of money.

Lonmin is in a strategic position. A strategic commodity. Depths only 600m. If there is a commodity producer one can hold for decades... do not forget that Rustenburg + Impala lease area have only 10 years of reserves left. From 2020/2025 on Lonmin's position will improve on a relative basis massively.

[elvisrocks] 19/11/2015 17:29

By the way the record date to participate in the RI was the 17th per the Prospectus, so what benefit are those trading getting today? What happens if you bought yesterday and still hold tonight?

You get sub-divided and then what without any rights attachment?

[elvisrocks] 19/11/2015 17:24

OK Siwel, I don't think it can survive in its current form either, hence the buy out or other separation. Something has to give in the SA plat industry I would agree but today, by the RI vote, Lonmin has leapfrogged over Sibanye who will next in focus. Lonmin's costs are better than Impala's too with the whole industry, unless they hedge, pretty much getting the same Pt price.

International Competition Authorities I think will now find difficult to block sector consolidation moves as they did in the 1990's, now some 20 years ago.

[siwel3] 19/11/2015 17:12

Elvis....it's not a 'mass attack', it recognition that Lonmin has at most a 36 month lifespan if Platinum prices linger at lows. The longer the situation lasts the more shorts will load.
Personally I don't think the co will survive in its current form but then I think the decade long commodity super bubble will be followed by a multi year commodity bust. We are yet to see the rationalisation and liquidation such busts require so its still early days.
But happy to be proved wrong, just as easy to trade either way so best good fortune with your decision.

[elvisrocks] 19/11/2015 17:07

Thanks Graham re Post 6183/5, either way it don't bother me, either to another institution or separate 'get out of Lonmin sellers' for 60m shares (10% of the stock) is good for those that remain in, all other things being equal.

EDIT

There's that large hedge fund or circling black entrepreneur for you in that 'dark pool'!

[graham2405] 19/11/2015 17:00

Simply put I want to sell 5% of Lonmin.

You can't just offload them on the market, it would go to 1p...... ;-)

So, you put the word out that you want to sell and 'do a deal' with another interested party who wants to buy, but knows that a large order will make the price go through the roof.

They agree a price, and jobs a good'n

Hence Block Trades, and Dark Pools.

[elvisrocks] 19/11/2015 16:59

Good to see Hanre Roussow of Investec getting in there with a quote on Post 6181.

The mighty Mr. Roussow said a week ago to CNBC TV that we could see below 1p by the time of ex-rights and Lonmin had had a "cash burn" of $100m in a single month October 2015, 25% of what it is raising today, already p...d away, in just one month before they even get it.

What a clown!

[graham2405] 19/11/2015 16:54

"They could have held half back until they were just above the 3% line and the other half in the last couple of days. Either way, 31m shares sounds bout half the total from Monday 9th to Wednesday 18th."

No, they have to notify as they pass each 1% until they reach 3%.

As for volumes, I doubt it very much that the sale was 'visible'.

They probably sold them to another institution 'under the counter'.

Yes, trades between institutions stay under the radar.

Commonly known as BLOCK TRADING.

or DARK POOLS.......

[elvisrocks] 19/11/2015 16:47

Siwel3

I wouldn't agree with that view in Post 6178.

Part of the 'reason' of doing 46:1 at 1p then 100:1 - and also probable advice of the underwriters to Lonmin to prevent a mass attack on their share price like has happened in the last few years / months / days - is to ensure 'strong capital' is in place after the RI. The underwriters will have given advice here.

The option was available to go for (say) 7:4 at (say) 11.5p but they went for 46:1

[mj19] 19/11/2015 16:45

Relieved Magara commits to stem Lonmin outflowDavid McKay | Thu, 19 Nov 2015 15:40 Share[miningmx.com] – LONMIN CEO, Ben Magara, declared himself relieved shareholders voted in favour of the group's proposed $407m rights offer and said it was now up to the company to deliver within three years."It's up to the business now to deliver on the business plan which is to be cash flow neutral after capital expenditure within a three-year period at current spot prices. I am very relieved," he said in an interview.Magara was commenting several hours after an annual general meeting of Lonmin shareholders in London in which 88% of votes cast approved a resolution the company issue shares for cash. Roughly 54% of Lonmin's share capital turned up to vote.Magara said the shareholder turnout was, when set against industry norms, a good one. "It was much higher than normal. It's way beyond expectations," he said.Shareholders also approved a share consolidation and a placement of shares with the 2.2% shareholder Bapo ba Mogale.Lonmin's other black economic empowerment (BEE) shareholders, which account for about 23.8% of the company, hold their shares in the platinum producer at a subsidiary level or, in the case of Shankua/Pembani, through Incwala Resources. They are therefore not asked to follow rights.Magara said there was no truth that Shanduka was not committed to Lonmin. "Shanduka has committed its long-term partnership to the BEE transation," said Magara. "We talk to Shanduka. It has expressed long-term commitment to partnership of Lonmin," he added.Finweek reported earlier this month that Shanduka has opted not to repay the £200m loan (just over $300m at the time) which was used to buy its effective 9% stake in Lonmin, which is held through Incwala.Shanduka's 50.03% investment in Incwala was facilitated by the £200m loan raised by Lonmin, and a R300m equity injection by Shanduka. It was followed by a further R175m loan from Lonmin.The platinum price weakened today while redemptions of platinum- and palladium-backed exchange traded funds soared from November 9 when Lonmin said, in unveiling the terms of its rights issue, that the offer had been under-written.Magara said, however, that Lonmin was doing the right thing by cutting only its high cost ounces and urged the South African platinum industry to do the same."I have seen many economic cycles and this is one of the worst of them; it is the worst of times ever for mining," he said."Those that succeed take actions early which is what Lonmin has done. We will remove high cost production. Everyone will need that," he said.Hanré Rossouw, a portfolio manager for Investec Asset Management, said the rights issue was confounding because it was investing in an industry in structural decline. "People who own the stock see hope, but unfortunately it increasingly looks like a case of throwing good money after bad," he said.

[elvisrocks] 19/11/2015 16:41

Does anyone know the total trading volume between the Monday 9th and Wednesday 18th (yesterday) and is it sort of reasonable to assume a lot of this could have been Old Mutual's dump. total dump 31m shares. I have about 60m shares volume in mind for those dates.

They could have held half back until they were just above the 3% line and the other half in the last couple of days. Either way, 31m shares sounds about half the total from Monday 9th to Wednesday 18th.

[careful] 19/11/2015 16:38

that could be said of all commodity companies.
3 years at these low prices would cripple BP. Shell or Rio.

[siwel3] 19/11/2015 16:37

Not much more to be said, consolidation then shorts load up again. A leveraged play against a Platinum price that may not recover or a steady 36 month decline to bust.

[careful] 19/11/2015 16:34

should open at 1.191 to match todays close.
rights nil paid 0.191p.

will it open up or down?

[archlight] 19/11/2015 16:27

serious buy volume on AQP

[graham2405] 19/11/2015 16:27

1.2p ish, if less than 1p, not good........

[mj19] 19/11/2015 16:25

What price will these be tomorrow

[elvisrocks] 19/11/2015 16:24

Thanks abryer or Togglebrush, that should explain the after 4pm sharp drop today.

[graham2405] 19/11/2015 16:24

Record date is meaningless.....

The time is Nigh.... 6 mins left

[abryer] 19/11/2015 16:21

Record date is 6pm tonight. If you don't want to participate in the ri you got 9 mins

[togglebrush] 19/11/2015 16:20

Record date for entitlement under the Rights Issue for Qualifying CREST
Shareholders and Qualifying Non-CREST Shareholders
Close of business on 17 November 2015

as per prospectus

[elvisrocks] 19/11/2015 16:17

Is there some possible "misunderstanding" of PI's here.

We've just gone into auction, last 15 minutes of Old Co Lonmin life, but any buyers/sellers today or yesterday is irrelevant due to t3 as you had to hold shares at close of business on 17th to participate in the RI?

[elvisrocks] 19/11/2015 16:10

If I am reading this correct, Old Mutual sold 31 million shares, down from 5% to 1%, and would would thus have also crossed the 3% recently.

I guess they have been one of the big sellers in the last few days - they could be one of those who has "dumped" 10m+ shares in the last few days leaving much of their "dump" right upto the day before vote.

[graham2405] 19/11/2015 16:05

First of many I should think