Lonmin Share Discussion Threads

[redbaron10] 25/10/2016 13:31

Good FY results due in just under 3 weeks imho.Good production figures and increased productivity.Nothing less will do.I'm of the view now that Big Ben will have had four years in charge with almost a full year to implement the turn-around business plan.If there's a shortfall on any of the objectives that were much trumpeted,then Mr Magara i'm afraid must be ditched and a new CEO bought in to protect shareholder interests.If Mark Cutifani at Anglo and Ivan Glasenburg at Glencore can restore confidence to their businesses with the debt piles they had around their necks,then Ben i'm afraid isn't up to the job.

[elvisrocks] 24/10/2016 21:15

30% margin needs, in my simple calculation, an average Pt Price holding for 12 months or longer, at, our higher than $1,400 per oz, an avarage XR of 14 and costs to be held constant. Can't see it happening anytime soon.

[harry_david] 24/10/2016 20:37

Elvis, unfortunately you could very well be right, commodity prices are not a good area for objective analysis. My long term approach has been to time dips and recoveries on the length of the previous trend. If you look over extended price moves you will see some commodities move sharply every 3, 5, 7 etc years. My theory being that the longer the boom the longer the subsequent downturn to get rid of the deadwood.If I am right this time we are getting near, within a year, of liftoff.As I am long you will no doubt say I am an unreformed optimist!

[elvisrocks] 23/10/2016 22:00

I wasn't particularly looking for this, but this to me, says it all. In 2004, Pt Price was $850 per oz region and Lonmin was turning 30% margin on the same turnover of $1bn, hardly any debt, hugely cash flow positive and paying a dividend. When will those days return? At $850 today, Lonmin will barely break even on cash or profit. This to me tells me the shares are over valued at the moment and heading back sub £1.40.

Pretty pictures too. Some ops guy even called Stompie! Bit like being called Chuck, Bud or Randy is USA I guess.

[harry_david] 23/10/2016 21:22

It is true current prices are very low even in rands and if they continue at these levels based on the companies figure for operating costs things will be very tight. I cannot see this level continuing much longer, even Implats would be exposed let alone the smaller operators. When you compare Lonmins financials with its peers you can quickly see they will not be the first to drop. They are all cutting costs and say what they will this always involves some cut in output.The recent price decline was largely caused by punters selling on the news sales of diesel cars are declining. On the other hand car companies have so much invested in them they are likely to take the obvious route of upgrading their catalytic converters. We would then see a real recovery!

[elvisrocks] 23/10/2016 14:08

harry david. The bit that the analysts are tuned into, and Lonmin do not argue against in press articles I have seen)is that they have to generate $200m+ organically in the next couple of years to fund replacement capx. What they are doing at the moment is capx is only operatring capx and they will tell you they have 22 months easy Pt reserves to fall back on if times get tougher. It's the $200m that worries me as by 2018 we will be back to talking about another RI before too long and the bankers still holding the shots.

[harry_david] 23/10/2016 09:53

It is a good article but I do not come away thinking I must sell. Mining as we all know is cyclical and usually the cycle lasts roughly the same time on the downside as it did on the previous upside. On my reckoning we are getting near the end of the hollow, I hope not but it could still be a year away, and then prices will as usual go too high.
The trouble for me is that I cannot claim success in short term movements so am happy to be invested at this moribund stage to catch the long term upside.

[redbaron10] 21/10/2016 23:22

yeah,plus reports of a wage agreement 'in principle'.As a hedge Anglo doing the business,touching £11 today.Quite happy to see how this plays out.Dollar strengthening big time in anticipation of a possible Fed rate rise in December,but who knows how the US election result will go.What about the Italian constitutional referendum in early December? Lots of potential volatility out there.The significant pointer for me is the stronger dollar today but gold and platinum prices held up well(dollar at seven month high).One massive bonus is the lack of news flow from Lmi.No smelter problems reported or lengthy safety stoppages,so peak production should be being achieved.Still bullish on precious metals,petra diamonds reporting Monday so this could impact AAL.BAT hurt today,up 3%+ on the Reynolds deal in the morning then collapsed before the NY open.ouch

[cudmore] 21/10/2016 20:27

100k buy. Someone sees an upside!

[elvisrocks] 13/10/2016 19:14

The Pt price is currently falling by $100 per month it seems, alreday below where it was this time last year before accelerating to a low of about $830, again about $100 from where it is now. I am beginning therefore to think that a figure in the $700's or dare I say it $600s may be within range.

[abryer] 12/10/2016 15:56

I got to be honest I can't understand why the price is holding considering the drop in plat recently.

[elvisrocks] 11/10/2016 13:52

365 days ago, the Pt Price was $1,000, approx $44 higher than where it is today according to the KitCo site I follow. In the period between October and mid January, it feel to low $800's. Today's normalised news of some Government big fish with his fingers in the till, causes the Rand to fall by 3$ but Pt price is down 1% too.

However, what should we make of this? I saw a video clip of an Anglo American board director to say volatility is here to stay. LMI has had a good run in the last 6 months but I now wonder whether we are due a southward trend for the next 6-12 months. At best, Lonmin is likely to say it has been cash neutral for the last financial year.

[harry_david] 10/10/2016 18:07

Good article in Business Day on the strike and some comments from the CEO. Explains today's action.

[elvisrocks] 06/10/2016 21:30

Also, LMI are now between a rock and a hard place. The clamer for good year end results (profit and cash) will be high yet the AMCU leadership will be sitting tight to see, even if an inch above (or below) half-decent and they will be straight in with their demands ago. Not a good place to be, especially with the Pt price dropping like a stone.

[elvisrocks] 06/10/2016 20:21

I now genuinely see £1.50-£1.60 in the not too distant future, with maybe £1.20 by Xmas.

Reasons: Stock markets at all time high, Pt price heading south fast, LMI has had a good six month run, no forseeable catalyst like there was with flight to safety after Brexit, fiscal policy rather than monetary policy likely to have the upper hand now, US Presidential elections unlikely to change US rate rises. Also doubt even a "good outcome" on the wage rises likely to have much effect I feel. 1.7m shares traded today, rarely more than 2m shares traded and LMI fell 5%.

[harry_david] 06/10/2016 09:32

ElvisRocks, I agree timing is the big unknown. There is also one other wild card. Lonmin is the perfect takeover target for either of the big two. The winner will become the OPEC of platinum.

[elvisrocks] 05/10/2016 22:28

harry_david, back to the timeframe word again. Double from 70p to 140p or £2 to £4?

Stock shortages are not seriously due to 2019 as I understand then seriously short by 2023-25. There will be four Ryder Cups by then, Rory McIlroy will be yesterday.s golfer, Tiger Woods retired and some 12 year old, five years still from taking his sriving test will be the new kid on the block!

[harry_david] 05/10/2016 22:00

Elvis Rocks, you are on the button as far as platinum prices go but my reading of the union discussions and market action both make me reasonably optimistic on wage costs.The violent price moves show that speculators/investors still have adequate physical metal and the forecast stock shortages are not yet with us.It all comes down to whether the company has the reserves to hold through this last attack of speculator nerves. I am willing to hold, when the dam bursts we will see these more than double in quick time.

[elvisrocks] 05/10/2016 19:30

This doesn't look good I feel. The Pt price is only 2% and 4% above its 6 and 12 months ago level ($940) and could easily fall another $100 from there to where it was in the lows of January this year. That combined with Deutsche putting a price target of 90p, wage rises still to finalise, this could fall quickly after a good 6 month plus run. The NUM wage rise referred to was one company for only 1,000 NUM refinery workers and at 10% plus wage hike. Lonmin are starting the negotiation at 6% I believe. I can either see a strike or 12% type rises against a falling Pt price, in other words, a potential warning on earnings when it releases its year end results (or they could surprise us mid-late October). Time to sell.

[redbaron10] 05/10/2016 12:27

Yeah,reading the report there seems to have been a healthy dose of pragmatism and realism on both sides.Sadly this is the NUM.Lonmin is dealing with AMCU which is more militant and hardline.It is interesting to read about including housing relief and housing improvement in the negotiations.Hopefully Lonmin can engage the AMCU in a similar deal whereby wage increases are partly offset and included as part of a settlement over housing.The housing commitments can be paid for over a longer time scale as opposed to paying wage increases straight away.Over the summer there have been press releases and management involvement in employee housing, so maybe the ground for such a deal has been prepared.

[harry_david] 05/10/2016 08:50

Implats have reached a deal with one union on reasonable terms for two years, one to go.

[harry_david] 03/10/2016 20:59

Also interesting, both Implats and Anglo have production holdups. This having no impact on prices so supply still not a problem. But these all help and are a counter to the run down in ETF holdings now current.

[harry_david] 03/10/2016 20:53

The unions are making a lot of noise with Implats and Anglo but nothing with Lonmin. A good sign, and the posturing with the other two does not look too menacing either.

[redbaron10] 03/10/2016 20:01

Article within Platinum news(sharps p.ltd) Macquarie's pointing to encouraging commodity demand from China going into 2017.This report has given Lmi a lift today,but the strong dollar has undone the Pt price.No news on the wage negotiations,year end for Lonmin 30/9,now have to wait until 14/11 for results.Hopefully pgm production has been maximised without too much being lost to safety stoppages.Unlike Anglo,we haven't seen any smelter issues either, which helps.US non-farm payrolls Friday,so have to see how this affects the dollar.