Lonmin Share Discussion Threads

[deanroberthunt] 25/11/2015 09:00

sub 1p cometh, might be worth a punt around 0.8/0.9p

[elvisrocks] 25/11/2015 08:45

No sorry Kojak, forced sellers are being robbed here.

The TERP is 0.19p against 0.05p now, so sellers are likely selling as they do not want to take up their rights or can't afford to. 0.05p is equivalent to about 3.5p in old money and the share price never fell, or even came remotely close to that level, after the mad sell when the 46:1 was announced on the 9th.

Good luck if you've bought more rights, it's a buyers market at the moment quite evidently.

[kojak78] 25/11/2015 08:39

Elvis, certainly rights sellers are not robbed by buyers. That is nonsense. PIs not willing to take up their new shares a are free to sell rights at the market price.

As my position still is somewhat small I have bought 1.17m additional rights.

[elvisrocks] 25/11/2015 08:27

Cor Blimey Graham, what's all this about then, you're the mathematician.

LMI down to 1.20, LMIN up 15% and now under auction?

[graham2405] 25/11/2015 07:59

"Now play nice and no saying silly things now while you wait for your truck load of shares and rights to arrive!"

So, your convinced I've bought.

Really?

As I said yesterday, delusional.

[chrisbr777] 25/11/2015 07:58

JSE this morning - 141 million rights offered at ZAR 1c (it cannot get any smaller without being free). If there was demand, why not just snap them up? You could easily do so without pushing up rights prices to 2c. Nobody would be any the wiser. I really don't think there is a play by the traders here. There is simply no demand for increased exposure to the Lonmin stock over and above their existing rights allocation.

[elvisrocks] 25/11/2015 07:56

You're back Graham, again. It's like having a little play thing when you're around you know a bit like a cat that's caught a mouse and wants to have a play. But I'm going to be nice, life's too short.

Now play nice and no saying silly things now while you wait for your truck load of shares and rights to arrive!

[graham2405] 25/11/2015 07:55

WHAT IF............

The LMI are being artificially held up, so as to provide a reason to take up the 1p rights.

Clearly at present the null paid rights have virtually no value.

BUT, with LMI at current levels, punters can 'expect' a profit given the LMI price.

Could this be a tactic from the underwriters?

Whatever you think, there are always other scenarios.

Regardless, with Platinum so low, it's fate is sealed.

[graham2405] 25/11/2015 07:51

"Share price is not going to fall below 1p"

No, your hoping that it does not fall below 1p.

[elvisrocks] 25/11/2015 07:23

Kojak, just a follow up there. The arbitrage we are seeing is deliberate and a play for those experienced to make very good money if they know what they are doing in this extreme volatility, a traders best friend. But it should return to its natural equilibrium by time subscription period closes.

Share price is not going to fall below 1p, that would mean RI has not just failed PIs but IIs too. Not going to happen. Investment banks and Greenhill advising Lonmin have all done their homework in advising Lonmin what will happen during these discrete time period.

[elvisrocks] 25/11/2015 07:08

Kojak, on the rights I think the huge drop is PIs selling their rights for whatever they can get and buyers robbing them. Yesterday's drop all the way down to 0.05p did not see any after hours trades whereas the day before it closed at 0.07p and I saw a big NT for 40m come in at 0.10p. Meanwhile the LMI price just sits quietly.

All this should recover to LMIN 0.19 and LMI 1.19 before the RI closes as this was the TERP when it went ex rights, possibly to 20% higher which was the situation on the Record Date.

Then the uplift that Magara talks about kicks in. At the moment all this is temporary market cap stuff, Lonmin worth less than $400m if you did the sums etc.

[chrisbr777] 25/11/2015 06:43

Mike, I suspect these costs are the costs up to EBIT level (so servicing debt still needs to be addressed). But as we have heard before, platinum price doesn't count, so the shareholders have agreed to fund the shortfall :)

[mikemaxm] 25/11/2015 06:37

"""Is that all in costs as in absolutely every paper clip and PA Xmas present?"""
That is a very good question. I dont know the answer. I assume they dont include in these costs debt facilities that they should pay to banks. So when the time comes to pay $370M they will again ask shareholders to share the pain.

[mikemaxm] 25/11/2015 06:23

Ben Magara said that after all the cutting measures(which they havent done yet) Cost production of PGM mix(Pd + Pt + Rd) = 10400+900(capital expenditure)= 11300 Right now they sell their PGM mix for 10 414 so they are losing 900 rand from every ounce. My formula for PGM Mix Pt 11874*6/10 + Pd 7598 *3/10 + Rd 10094*1/10 = 10414

[kojak78] 25/11/2015 00:05

Elvis, rights will be out in SA from the 26th. It makes no sense to take up rights now, if you pay up too early you lose optionality. If the share price goes below 1p, could well happen if platinum crashes, it makes no sense to take shares. Just wait until after the RI and then buy cheaper than 1p. Small risk but do not forget that while waiting the price for buying shares is fixed, so no way to miss out by waiting.
And I think that is the reason for the rights price. PIs not able to buy shares are selling now. Buying is limited because rights will expire worthless if you do not have the capital to back the rights with actual shares. PIs having "virtual" shares due to the CREST shares on loan will also decide if they use their rights at the very last moment. So what about shorters? The share shorts are meaningless now. The rights short that shorters automatically entered into is interesting. Why buy now when it might happen that part of the rights are not taken up? Short position gone for nothing. And if rights are taken shorts will be able to cover buying the new shares. As they get 1p per new share too it is not more expensive than to cover now. In theory.
I think in the end the rights price will never recover but at the very end nearly all rights will be used and shorts will have to cover via buying the shares meaning the current share price will stay at a premium to the rights + 1p price. That premium is not going to vanish, the shares will just stay "high" and the 1p + rights price cheap chance to cover shorts will be gone.

[kojak78] 24/11/2015 23:49

lazyhisnibs, that is why I always take a look at the cash flow statement. That has to be right. Of course there are a lot of one time events, sales, acquisitions, depreciation and capex really offsetting etc. Back in 2013 when I bought Sibanye super cheap I did a lot of those calculations and the difference was much worse for companies like Newmont back then. And if we add companies like Barrick having a debt problem on top... then you can add another $100-$200 of margin needed for servicing the debt. South Africans have debt that can bankrupt them too ultimately but not excessive debt. Excessive debt would be something like $2-$3bn in debt for Implats. I think metal prices are reaching their low in this tax loss selling season in December and companies like Newmont will do fine. But we still will see banktuptcies of overindebted miners or at least huge asset sales. The SA miners will do their own thing as higher metal prices = higher Rand and so cancelling out price gains. In the end the wage increases have to stop a new normal must be found.

[elvisrocks] 24/11/2015 21:22

Lazy, no didn't buy any more just paid up my rights etc, so now just waiting essentially until the 11th. Despite my little exchanges with Graham and the vast number of posts, I sometimes wonder if I am missing the point but I'm not.

At the moment, as things stand here, there is nothing bar 10p old money ($80m) in the share price for Lonmin's balance sheet or "future". It's a $2bn balance sheet and its future is priced at "X". Graham will tell you it's future is Zero and "X overrides any balance sheet value(or wipes it out)". That's the point people are missing. Kojak and a couple of others have seen it and big shareholder has seen it. But others who bought in many years ago at £x or have lived with all the collapses very understandably question it

As for the 1% rights trading each day, those who are desperate or have lost hope are getting out and traders/others are picking up what they can to trade again or go long. In terms of a formula to think how much is Lonmin trading at the moment in old money, this is the formula you need supplied by Typo.

LMI[cum rights] = 47*LMI[ex-rights]-46
At 1.19p, the TERP before it went ex-rights, old money = 10p.
At 1.25p, ex-rights price that it finished at today, old money = about 12.5p

Good Luck.

[lazyhisnibs] 24/11/2015 21:00

Kojak,

I've always been suspicious of all these industry cost standards hence why I always ask the number crunching posters if the all-in include this that and the other thing. All-in really should be everything and the miners should say where there is doubt or a lack of sufficient information at that time or where an input is excessively dynamic to pin down and why. In the example you gave on your figures they understated by about a sixth. Flipping heck!


PS: In the figures you provided for Newport their quoted all-in was 37% above cash costs. That gap's excessive even had it been right. Your calculation adds 60% to their cash costs. Nuts.

Elvis,

Did you buy more rights on Friday as I vaguely remember a short exchange between you and someone else along those lines?

---------------------

Time to do some paperwork, this is becoming too interesting to be healthy, an obsession almost and a disturbing one at that.

[elvisrocks] 24/11/2015 20:26

How's that truckload or three of LMIN rights you bought Graham?
Made it home safely yet?

[elvisrocks] 24/11/2015 20:23

Kojak, apologies for this tedium with Graham.

What's the score with Plat ETF's in SA at the moment in your view?

[graham2405] 24/11/2015 20:22

"Likely problem is they ain't going to be able to get them as demand is so high!"

So high that the price is on the floor........

Delusional.

I rest my case. ;-)

[elvisrocks] 24/11/2015 20:19

That was indeed correct Graham, you read that correct. PIC indeed do want that 25%. Did you not see their CEO say he has got rich investors lined up in SA Sunday Times about weeks ago? Public Statement that was, UK Takeover Panel will have taken note

Likely problem is they ain't going to be able to get them as demand is so high.

[graham2405] 24/11/2015 20:18

"PIC do want, then they offload to lined up investor."

Delusional.........

Your losing money and you have lost your mind.

Keep dreaming......

Night, Night................

[elvisrocks] 24/11/2015 20:18

Graham now researching "Boardroom Politics" in his old school encyclopedias ....