Lonmin Share Discussion Threads

[graham2405] 24/11/2015 20:15

"Hmm, let me think why did CEO give an unequivocal answer? Maybe he has a brain and he was dammed if he did / dammed if he didn't if he answered either Yes or No."

Why would he be dammed if he confidently said NO, we will not need any more shareholder cash.

Trust me on this one, if they ever need cash again he will be on his bike long before any cash gets handed over.

I strongly suspect that his days will be numbered if things don't improve within the next 12 months.

[elvisrocks] 24/11/2015 20:12

You supplied the rope Graham for yourself (again) not in denial on the 46%, maybe some institutions and many PI's abstained, doesn't matter they're in now and have to cough up the cash or flog their rights, and there is no evidence of the latter.

Wait.... Magara says new shareholders have come on board who want more than their entitlement. Sorry, PIC do want, then they offload to lined up investor.

Derr .......
Keep it up Graham, everyone loves a tryer!

Did you get top marks at school for effort and zero for attainment by the way when you were at school?

[audigger] 24/11/2015 20:12

I won't be spending another penny on these. I'd rather write it off as a bad loss than throw more money down the drain. Have only ever dabbled in 3 mining shares with Angel (anyone remember that debacle?) which cost me a good few quid and Anglesey which pleasantly surprised, being the other two. Not a sector I will buy in to in future. I'll stick to commodity ETF's instead with silver price recovery my main punt.

[elvisrocks] 24/11/2015 20:08

Yip, that's what all Prospectus' do, point out risk factors. And neither can it's competitors control the prices of the product. Try again, scroll back through a few of the posts to see why they have come back asking for more.

Hmm, let me think why did CEO give an unequivocal answer? Maybe he has a brain and he was dammed if he did / dammed if he didn't if he answered either Yes or No.

Priceless, what a tool .... you're even worse than when you took your break to Italy!

Everyone loves a tryer Graham, keep trying!

[graham2405] 24/11/2015 20:07

"PIC and others want 25% plus more rights."

WANT, underwriters don't want shares.............


Far from it, they take the risk of being dumped with the shares, and they get paid handsomely to do it.

YOU ARE IN DENIAL.

BIG TIME!

[graham2405] 24/11/2015 20:05

"Who is to say that the other 46% wouldn't have voted Yes"

Hilarious......

The more you clutch at straws the more your investment slips through your fingers.

[graham2405] 24/11/2015 20:03

"why don't you critique this for us, Page 24 of the Prospectus"

I don't need to critique it. It just makes it clear that they have no control over the price of their product.

Simply put, it is a risk factor.

...and one of the reasons that the company had to come crawling to shareholders for more cash, three times in the last six years.

How long before they ask again.

Please note when Ben (CEO) was asked he did not give a straight answer to whether they would need more cash from shareholders again.

......priceless

[elvisrocks] 24/11/2015 19:59

88% is good enough for me, 54% voted, couldn't care less. Who is to say that the other 46% wouldn't have voted Yes (or maybe you know the answer on that as well)?

Don't seem to be much free float on the market so far, we are a third of the way in, only 3% volumes traded so far. In case you you hadn't seen it, PIC and others want 25% plus more rights.

[elvisrocks] 24/11/2015 19:56

Graham, why don't you critique this for us, Page 24 of the Prospectus:
------------------------------------
The market prices of PGMs historically have tended to fluctuate widely from the impact of normal demand and supply factors. These fluctuations may also increase in severity as a result of speculative short positions in PGMs related to trading in physical metal or in metal-backed securities such as ETFs.

Significant investment holdings of PGMs make it more difficult to accurately predict future supply and demand and may contribute to added PGM price volatility.

There is a risk that the price of any particular PGM may fall, and that investor speculation may increase this trend. For further information on ETFs and their effects on PGM prices and supply, see the section entitled ‘‘Investments in PGMs’’ in Part IV ‘‘Industry’’ of this document.

[graham2405] 24/11/2015 19:55

"Went through with 88% support I believe"

M Yass

It went through with 88% support from those that voted.

AND ONLY 54% BOTHERED TO VOTE.

Given the % of Institutional holdings, that's a lot of abstentions.

So more than half failed to support the issue, hardly a success. Which could well translate into over 50% not taking up rights which would be a disaster for shareholders.

It's likely that there will be a lot of unwanted shares floating around.

Yes, the company will get it's cash, but the shares will flounder.

[elvisrocks] 24/11/2015 19:42

Lazy, I think ur losing the plot if ur about to start critiquing a stress tested Business Plan and comparability of general mining conventions in SA! See you in Year 2050!

Good Luck!

[elvisrocks] 24/11/2015 19:38

Graham, how about I repost Careful Post 4881, you seemed to know all about that too.

It was aimed at you and said "You must be getting tired, it has been a long day. The rights issue will go through with over 90% support".

Went through with 88% support I believe.
Priceless!

[lazyhisnibs] 24/11/2015 19:37

mikemaxm

"Ben Magara said that after all the cutting measures(which they havent done yet)
Cost production of PGM mix(Pd + Pt + Rd + base metals) = 10400+900(capital expenditure)= 11300."

Is that all in costs as in absolutely every paper clip and PA Xmas present? (Kojak said something about mines in SA being a bit different in this regard but I don't know if he was in or out at the time nor the substance of his point.)

Anyway, so they would be a bit better than b/e (on paper) had they done the restructuring and cost cutting already?

Through attrition about half the targeted cut in the workforce has happened but the earmarked shafts are still operating as far as I recall. I think management said they intend to get those closed by the end of 2016 but I stand to be corrected.

[elvisrocks] 24/11/2015 19:36

You don't need to believe me, head over to the Johnson Matthey Report and read that, that's why I re-posted it. Think about ETF's too.

Why don't you critique all that Mr. Know It All?

[elvisrocks] 24/11/2015 19:33

Indeed they were Graham but what a priceless t.. you are. They used "lower than consensus".

Were you there? Did you see what figure was finally used, was it just under $1,000, was it $650 maybe or a range, or weighted average range, what exchange rate, what discount rate, what inflation rate, life of the plan v mine.

Suggest you head back to Italy and stop being Mr. Clever Clogs as though you were there. Priceless and a total ... too!

[graham2405] 24/11/2015 19:30

Don't let anyone (especially Elvis) kid you otherwise.......

......THE PLATINUM PRICE IS CRITICAL TO LONMIN.

Lonmin is a one trick pony, it only produces PGM's, most of which is Platinum.

Platinum goes down Lonmin burns cash, if it goes up Lonmin should make cash.

BUT, when it was over $1400 per oz, Lonmin was still making a loss.

DO NOT TOUCH THIS, unless you believe that Platinum prices will recover before Lonmin needs more shareholder cash.

Do your own research......

[graham2405] 24/11/2015 19:25

"As I said, any PGM producer is never going to reveal its hand on prices or consensus prices."

Lonmin's consensus prices were in the Rights Issue prospectus.

....and $1070 was the CONSENSUS LOW.

Priceless given that the actual price is circa $850....

[lazyhisnibs] 24/11/2015 19:22

Typo and Graham,

Thanks for addressing the last fiddly questions for me and of course if I ever get around to seeing through an RI I can check with my online broker. In the mean time:

For someone exercising the rights whenever they were acquired provided it is before Dec 10 (taking cognisance of one's brokers deadlines and procedures):

"No spread on the 1p, just straight forward, vanilla flavoured 1p?"

Right, we three seem agreed that the above is correct.

"Normal broker commission applies unless one or two brokers decide to charge less for whatever reason?"

OK, so the consensus answer is probably that there is no broker commission. I now have a vague memory of some charging something which came out of poster chatter whilst the POG's RI was going on. To anyone reading this, I'm happy with these answers but if you're in the thick of this RI then it is better to check with your broker.

"The normal stamp duty applies as it's still a shares transaction from Big Brother's point of view?"

So the consensus answer is no there is no stamp duty charge but again if anyone is reading this rather check with your broker as it could be a fair old whack. Personally, I don't need to double check at this time, mercifully!

Graham, the point you made on the reasons behind the RI make sense and I was told the same thing by a stock broker long ago.

I would just add though that with POG they had (and I think still do, just) operational margin. For anyone getting involved with that at circa 5.5p could have seen an increase of about 2p or a third (in profit) about four months later in June. That of course ignores the probability of getting the timing damn near perfect and assumes the stress and risk was worth it which is rather doubtful.

[elvisrocks] 24/11/2015 19:06

Post 5862 repeated about constipation and platinum prices .....
----------------------------
OK, here you go mikemaxm and Graham, special treat for you in noddy bear language on Profit. Use Page 23 of the webcast slides to put numbers to it.

In 2014 Lonmin made $194m EBITA, in 2015 $21m EBITDA, explained as follows:

"In 2015 we sold more volumes but at weaker PGM prices"
"We also got a profit from base metals and better sales mix"
"However our costs on a like for like basis were higher because we produced for 12 months and had to pay 12 months wages due to the strike now being over"
"We also made money due to inventory profit movement"
"Finally we made some money due to better FX rate, also had some cost savings too"

But "fire fire" shout mikemaxm and Graham "we have a fetish about the platinum price". "No problem" says Elvis. Here are those two numbers 2014 v 2015 (remember 2014 is a shorter period due to the strike) so:

"We made $259m less profit due to a weaker PGM but got an FX benefit of $117m"

"That doesn't sound any good" cry mikemaxm and Graham

"That's because there are lots of other ways Lonmin are managing their costs and making savings" says Elvis

"Oh, OK we didn't realise that Elvis" says mikemaxm and Graham. "We have this constipated fetish about PGM prices".

[mikemaxm] 24/11/2015 19:05

Their PGM mix is approximately 60%Pt 30%Pd and 10%Rd.

[lazyhisnibs] 24/11/2015 18:59

Elvis,

Out of context perhaps but the rand value of pt is down about 14% from the R13650 number mentioned above and 22% from the 15 000 mentioned.

I still think this mostly comes down to sales prices in the end. Costs are important too of course. If platinum at least consolidates and management can further slash costs then you could do OK in the end. The thing is, can they even get those shafts closed to schedule. That's rhetorical as we simply don't know.

A few weeks back when I was itching to have a go I spreadsheet'd some scenarios the basics of which I posted. In one example was someone with an average of 21p.

A few weeks on we know what the nil paids are worth and if that hypothetical person (with 50000 shares) couldn't afford to follow any of their rights or couldn't face doing so and had relied on selling their rights then unless I've got the decimal point in the wrong place they would have yielded about twenty quid if they had sold all their rights today. Compare that with the loss through the 94% dilution and it makes these heavily discounted RI's more than scary but sickening too.


PS: I note you or someone else posted one that apparently went the other way but I won't comment on that as I know nothing about it.

[mikemaxm] 24/11/2015 18:56

Ben Magara said that after all the cutting measures(which they havent done yet)
Cost production of PGM mix(Pd + Pt + Rd + base metals) = 10400+900(capital expenditure)= 11300.

[elvisrocks] 24/11/2015 18:51

mikemaxm, not me who is the liar, head Johnson Matthey's way, it's their report and they are the considered experts here!

PS: Take that accounting course I recommended as well, sharpish!

[elvisrocks] 24/11/2015 18:49

No, because it will cut back on its capx, implement its cost cuts and account for the value benefits as set out in the webcast slides = Profit!

Cut cloth accordingly as Magara says.