Lonmin Share Discussion Threads

[careful] 10/3/2015 08:31

what are glen up to?
by the time they hand the share holders their stake it will be worth very little.
ivan has deliberately talked the price of his holding down.
he must be up to something.

price of platinum does not help.
when the us fed declares economic war on the world, creating low domestic inflation by crushing commodity prices, the miners and numerous country's suffer.
poor russia.

[blippy2] 09/3/2015 22:47

It seems almost laughable now. About as wrong as wrong can be.

[ginty the brave] 09/3/2015 19:24

6/2/2015

The speculators are homing in on Lonmin. The South African platinum miner jumped 16p to 188.3p amid chatter that it could be a takeover target. The theory is that Glencore, Lonmin’s biggest shareholder, will take full control of the business, which lost 44 per cent of its value last year after a five-month strike, resolved in June. Lonmin reached a 10-week high, while Glencore inched up 1.85p to 268.85p.

Seems like a bloody long time ago.

[blippy2] 09/3/2015 17:57

Just when you think this thing can't possibly go any lower ...

[lazyhisnibs] 09/3/2015 11:13

dealy,

Pleasure.

That's one big short. I remember the last RI vaguely but do they also have to service bonds too? More to the point do they have to contend with bond holders? I'll explain my thinking if they do.

With the dollar likely to continue rising I had been wondering if the market was discounting for another funding six to twelve months hence. You obviously think not but if the platinum price continues to drop even very slowly then in an IR environment like SA's commentators will start to chatter about it again.

I've heard chatter along the lines that Lonmin has the weakest balance sheet of the three biggies on the Platinum Belt. On the other hand I've read (mostly sound bite stuff) that they were quickest to recover operationally from the strike.

I was thinking in terms of some good upside at about 130p but that was before Glen started limbering up to give their shareholders the choice of whether to hold Lonmin shares or not. Notwithstanding that surely there must be scope for a bounce or three, over a few months I see this falling to about a quid but with a fair amount of resistance and foot dragging along the way.

As for a buyout then normally I would say fair enough for a contrarian who has a patience threshold measured in years rather than months but why would any company make a serious bid while the platinum price and other factors are taking the share price down. There are unlikely to be many contenders. For starters they could have negotiated with Ivan G for Glen's 24% to get things moving.

[dealy] 08/3/2015 08:06

Also worth noting is that the market cap is now below the equity that was raised just over 2 years ago.

[dealy] 08/3/2015 08:01

Thanks Lazy,

I would argue that most of this stuff was already factored into the price at 180p. A buyer could still emerge for Glencore's stake - hence the long period of time until May. The last operational update from Lonmin was very positive. Fears of the balance sheet look overdone with net debt at just 29m in September and 500m of facilities available.

I have the feeling that in this QE induced world of negative bond yields (the ultimate move to safety) investors and lenders have just lost all stomach when it comes lending to / investing in actual industrial corporations.

FT mentions a 10% short position in the stock (Friday).

If the private equity guys are ever going to use any of the money they have been entrusted with this could be a good candidate for a takeover.

[lazyhisnibs] 06/3/2015 18:54

"I still don't see why it is down 25% in the last 4 weeks against the backdrop of the QE induced equities rally."

The Glen announcement or "overhang" as the other poster put it to be voted on in May at that Company's AGM.

Implications with managements' relationship with workers through the union AMCU. For instance if needed could they layoff significant numbers of workers. Could any company on the Platinum Belt.

Supply: I stand to be corrected but I think there is still a lot of platinum above ground and there is recycling of course.

Demand: to many Europeans it probably still feels like recession so why now for a new car or a less old second hand one. The ECB fighting deflation and from my observations US QE helped just about every sector except recources. There is a big risk that the dollar will be the main 'beneficiary' of what is effectively a weak Euro policy even more than before.

Load shedding i.e. electrical supply challenges which effects the other large industrial users in SA too.(This situation is not static and sometimes also impacts households and SMEs.)

The 'new' mining law was sent back for review by President Zuma but any modifications or even extensive re-writes made are unlikely to be robustly capital friendly.

Empowerment deals (I don't know the up-to-date status with this but it might be worth researching if an investor rather than a punter. They are not popular with all investors and can be tricky to negotiate and finance. Longer term they may make for a more stable economic dispensation.

Oil: the lower oil price must have helped.

PGM prices and the dollar: palladium is doing quite well but platinum prices have been trending down and are again flirting with the lows while the weighted dollar has been trending up.

China data and economic statements out of that country are increasingly commodity unfriendly.

DYOR and it might be worth a bit of Googling if looking to top up for anything other than the very short term.

[careful] 06/3/2015 17:14

trading volumes are not that heavy.
less than 4m shares.
below 1% of shares.

but platinum price falling as is gold.

[dealy] 06/3/2015 17:09

I still don't see why it is down 25% in the last 4 weeks against the backdrop of the QE induced equities rally.

[lazyhisnibs] 05/3/2015 14:40

To me the most useful thing about TA is not TA but the money management message they promote along side it. Then there is the self - fulfilling aspect which can be powerful with ranges and trends working until they don't sometimes spectacularly. Anyway I have a video clip of a well respected South African technical trader saying that if the share price gets above R30 to R31 it could be full steam ahead (see below). One the LSE chart that is about 196p but the Rand price is displayed on the home page of Lonmin's site. Perhaps there is another set up lower down. If I find one I'll post it. In the mean time on the vid ink below wait for about four and half minutes in to the vid.

hxxp://www.businessdaytv.co.za/shows/talkingtechnical/2015/02/05/talking-technical-part-1

Fundamentally it is an awful situation I think but you are right that it has fallen a heck of a lot already. You may well need that patience. Time will tell.

[careful] 05/3/2015 13:33

long term.
sometimes take a quick 20% if it happens, but happy to wait much longer.

[lazyhisnibs] 05/3/2015 13:16

Depends is your aim was good the first couple of times!

You talked about short term problems getting resolved. I asked how?

Further, which of them is short term and which are structural or at least medium to long term rather than short term? Are any of them getting worse?

The power situation has been better recently for domestic as in less load shedding but I think the large power users are still being asked to 'volunteer' 10% savings or thereabouts.

They got that three year wage deal now but I don't see how redundancies can be made without IR mayhem. In that environment the dollar continues to inch up and platinum continues to trend down. Is recycling a substantial problem or an excuse, I think the former.

If you're taking a technical view rather than a fundamentals one then what do you see in the charts? Is it a punt of a few days or a trend trade for you? It would be exciting to see someone get the turn as it's been a long time coming.

[careful] 05/3/2015 12:35

All of that was true six months ago.
shares are a risky business.
those negatives and doubts are the reason LMI collapsed from 1100p to 350p.
..but today 140p.

how many times can you shoot the same horse?

[lazyhisnibs] 05/3/2015 12:24

Good luck with your punt and in that respect I wonder if Draghi will say enough to goose markets for a few days including the one for PGMs.

But in respect of "short term problems can be sorted" may I ask how and isn't the real biggie Europe finally coming out of what feels like a recession to many of the blocks consumers?

Added to that are all the challenges of running mines anywhere and atop that in southern Africa with such issues as severe power shortages and even more seriously in SA with its own brand of threats, constraints and challenges. E.g. how's the mining law going to read the second time around.

[salpara111] 05/3/2015 11:49

Until it returns to paying a divi there is no floor to the share price and that is not even on the near term horizon as far as I can see.
Some people talk about "assets" but an asset in only an asset if it can be dug out of the ground and sold for a profit and I am guessing that an increasing percentage of their "assets" are not currently economically viable.

[careful] 05/3/2015 10:41

having a punt here.
now down 60% in just over 6 months.

[lazyhisnibs] 04/3/2015 12:29

Recycling (read across .... comments from another miner)

hxxp://www.destinyman.com/2014/03/05/royal-bafokeng-platinum-on-the-mend/

Extract:

"Phiri raises a concern about recycling becoming a competitor of primary supply in the mining sector. “It’s worrying to see recycling taking the space of primary supply. We as South Africans must get our house in order to ensure sustainability in supply to the world,” says Phiri."

[careful] 03/3/2015 14:14

more than halved in 6 months.
the name of this thread need changing.
£2.80 seemed shocking not long ago.

a market cap of £858m.
assets £2.2bn.

[lazyhisnibs] 03/3/2015 11:52

The five year chart looks hideous.

For rich and very, very patient contrarians only.

[salpara111] 03/3/2015 11:36

As I alluded to in a previous post, the distribution of LMI shares by Glencore is going to create a huge virtual overhang on the stock which will last for a long time.
Ironically I do think it would have been better for the business if Glencore had managed to sell its stake to a single strategic investor even if it was at a hefty discount to the share price at that time.
I no longer play single metal producers like LMI as they are just getting crushed by increasingly hostile governments.

[lazyhisnibs] 03/3/2015 10:17

Glen doesn't own 76% of them; they don't want them and the decision to hand them over to their share holders to do what they will with them has been made and documented. Extract from Lonmin's RNS dated 11 02 2015 in parenthesis:

("The Board of Lonmin has noted the statement made today by Glencore plc. Glencore announced its intention of seeking shareholder approval for the divestment of its non-core 23.9 per cent shareholding in Lonmin as a distribution in specie to Glencore shareholders. The proposal is for the approval of Glencore shareholders at their own Annual General Meeting on 7 May 2015.)

Glen doesn't want what is not core to their business. What is core to their business is what they trade. They don't trade PGMs, not in the normal course of business anyway.

On the other hand the Medupi power station is being prepared to go to "first power" but will taken another 3 to 6 months for all six power units to be synchronised with the grid. It takes about three years for maximum power to be achieved and delivered to the grid though so that is how long load shedding might continue. Load shedding might conceivably help the platinum price eventually but it sure as hell won't help Lonmin as for PGM prices to rise partly on compromised power availability will obviously mean production gets compromised and there can't be a material level of layoffs without another confrontation with AMCU. In the long term the paint dryingly slow commissioning of Medupi will be good news.

[dealy] 03/3/2015 10:15

the recent operational updates were really strong imo. could be a forced seller. not sure. volumes are quite low.

[careful] 03/3/2015 09:30

ivan should buy the shares glen do not own.

[careful] 03/3/2015 09:28

i thought they were going to distribute the shares to glen shareholders.
ivan said a while back that he would not sell them cheaply in the current difficult market.