Lonmin Share Discussion Threads

[lazyhisnibs] 24/3/2015 09:46

Dollar down this past week or so, many commodities up.









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There might be IA (probably remaining constrained) at one of SA's small (ish) platinum miners. There was some strife with that one earlier in the year too.

hxxp://www.news24.com/Tags/Companies/northam_platinum

[lazyhisnibs] 19/3/2015 09:44

Rock Star & Salpara

If you have supporting links in respect of any of your sources please share them.

The following broadcaster puts a lot of their interviews online.

hxxp://www.businessdaytv.co.za/

All three of the biggies on the platinum belt are covered, almost daily but usually briefly either by way of video snippets or press articles. Some of the smaller players are too and currently there is a piece on one of those doing a BEE (Black Economic Empowerment)deal, here is the link.

hxxp://www.bdlive.co.za/business/mining/2015/03/19/northam-platinum-shareholders-approve-r6.6bn-bee-deal

You speak of some big picture matters as if they are fact. I've heard some of them before like the highest cost base one. Any source reference would be appreciated.

[careful] 18/3/2015 19:12

at last platinum price is moving up in ISA tonight.

[careful] 18/3/2015 07:29

recent production numbers were good.
last year was poor because of industrial action.

there are fixed costs and variable costs.
efficient production reduces unit costs.

I believe that the industrial troubles are over.
Lonmin miners are amongst the best paid in Africa.
They will perform well.

It is not only bankers and footballers who need incentives

[dealy] 18/3/2015 07:09

Well, according to the last update from Lonmin their production costs at 10,800 Rand per oz. were well below the spot price. Why would their costs necessarily be higher than others?

The article I posted yesterday points to short interest rising more than 400 basis points since January. 4% of the company is about what was roughly dumped to bring the share price down from 160p to 110p. So the shorts have an agenda here. Just like with Quindell recently.

Lonmin is no Afren. It is not over-indebted or badly managed. It is normal industrial company with normal margins and normal prospects. In light of that normality the shares should return to 160p fairly soon

[rock star] 17/3/2015 19:36

Word of warning. People in the industry are saying at current prices there is no way Lonmin can survive as they are the highest cost producer. Someone needs to cut production to push prices up but the other major producers know if they production up then Lonmin will go to the wall.

Apologies to be negative but in the commodities game you don't want to be invested in the highest cost producer. Glencore haven't walked away for nothing.....

[lazyhisnibs] 17/3/2015 18:19

Just heard a brief news report on the box about European cars sales which has had an improving trend for 18 months apparently. February's sales figures were pretty good too. That being the case for platinum to have been falling like is has been I can only guess there is still a lot above ground.

Does anyone know is recycled product used in catalyst converters for new diesel cars?

[dealy] 17/3/2015 14:28

interesting that it say the short position has gone up from 4% to more than 8% in the last few weeks. I have been following the volume and only about 4% of the company has been traded in recent weeks. In other words it is short selling that is entirely repsonble for the down move (existing holders haven’ t sold).

i.e. great opportunity when these schmucks cover.

[lazyhisnibs] 17/3/2015 10:02

About 18% up from the 52 week low to the high of the day so far but still 25% down over a month and nearly 60% over a year.

Potentially lucrative for those good at double guessing with the tea leaves or going short from atop the bounces.

I disagree strongly with the comment above in respect of labour which is a challenge on every imaginable time frame until things change structurally in SA. That will be seen very clearly and very quickly if any of the big three on the platinum belt try to make a material number of workers redundant. Perhaps even just a modest number so efficiencies that route would have to come from natural attrition. Demand for platinum just isn't there and won't be anytime soon. All in my opinion.

Here's someone else's opinion by way of balance.

[bernieboy] 17/3/2015 08:39

It will get back. Will just take time. They have been an unloved stock in an unloved sector before and bounced back massively! Fill yer boots and hold for a few years!;-)

[careful] 17/3/2015 08:17

a good move up this morning.
the appointment of a high quality COO must help

this is a serious long term company working hard to overcome the labour problems of the recent past.

[careful] 13/3/2015 14:26

90% down in 3 years.

[dealy] 13/3/2015 13:46

good points careful.

160p was already a depressed price. it's not like we fell from all time highs.

sentiment is awful in the sector - usually a good signal for a bottom.

to build a company like Lonmin would cost a lot more than 650m GBP.

[careful] 13/3/2015 11:58

net debt is very low.

[careful] 13/3/2015 11:56

there is no need for speculation about glencores motives.
they have said long ago at the time they inherited their lmi stake at the time of the xta takeover that it was not considered to be a core part of the business.
(they want total control usually)

fears of a cash call would explain the depressed the price, but we are falling into the trap of thinking there has to be a logical reason for the dramatic collapse.

over the last few years many shares of healthy companies have collapsed and then recovered.

[bouleversee] 13/3/2015 11:48

Rather regretting contributing to the last fund raising exercise instead of getting out. Having held for a long time, I'm feeling rather sick. Little point in getting out now, however.

[lazyhisnibs] 12/3/2015 20:57

If you think a funding rumour wouldn't make a material contribution to knocking a share price like that then your experiences have been very different to mine.

Traders including IIs getting out of the way of a falling price is rational in my view especially hedgy types. A few may have morphed in to shorters.

Holding on and on and on in the hopes of a recovery isn't usually sane for most but what is right for an II will depend on their stated strategy including time frames and all the rest but with platinum continuing its decline their reviewing that strategy would make sense. Perhaps some have completed that recently.

You use words like 'spineless', are you heavily invested in Lonmin? I was invested and not, for me, lightly but not exactly heavily either. I'm thinking it must turn but that it won't shoot the lights out on a sustainable basis without platinum joining in. So far I haven't been able to identify anything that would drive that metal much higher as the sale of diesel vehicles in Europe are likely to remain depressed for a couple more years at least.


-------------Side issue?---------------------------------------------------

Eskom (the monopolistic, quasi State energy producer) has suspended three senior executives including the CEO. The BoD (of that entity) is to appoint a board of inquiry. Inter alia they want to know why the big power station only now being prepared for commissioning got years behind schedule and learn more about the supply contracts in respect of that project. This move may or may not impact medium term load shedding and other supply issues. It doesn't seem unreasonable to wonder if their investigations will, at the periphery, consider the currently voluntary power restraint agreement they have with big industry which obviously includes the mines.

hxxp://www.bdlive.co.za/business/energy/2015/03/13/why-eskom-pulled-plug-on-execs

[dealy] 12/3/2015 20:15

In a normal market an analyst observation like that wouldn't be enough to knock a debt free company down by 40%. I think it is just spineless institutions completely afraid to take any risk whatsoever and just sell on any hint of trouble. Afren spooked a lot of people. Besides, the pension funds are all busy buying bonds with negative yields.

[lazyhisnibs] 12/3/2015 17:10

"“Lonmin requires a considerably more favourable platinum group metal pricing environment to pursue its current business plan,” Investec Securities said in an e-mailed note yesterday." "Lonmin is cutting capital and operating expenses"

The above loosely dovetails with a rumour someone mentioned on another board. I'm thinking it might have added the accelerant to the fire as it were. Not the post but that there might be some stirring in the City. Where there's smoke, there's fire sort of thing? Not something I would get to the bottom of and I suspect its at least four months premature to talk funding.

[dealy] 12/3/2015 14:54

personally I think some funds are getting out of stocks like this (probably due to a pasting on commodities in general and the surge in the dollar) and market makers are taking advantage of the need to sell by offering low prices. once the sellers are gone i think we could recover quickly to at least 125p in the short term.

[dealy] 12/3/2015 14:52

thanks for posting. I am just saying that there has been no new news and that is significant in determining why the stock is falling. Is it falling for a specific fundamental reason (if yes, then bad) or is it falling on no news whatsoever (if yes,then back up the truck).

[lazyhisnibs] 12/3/2015 14:39

I'm posting for anyone interested.

I'll post some of what I read in the press.

If you're not interested filter me, I don't need a running commentary on what you think is new or not.

[dealy] 12/3/2015 14:23

no new news in that article. no new news since the stock was 160p.