Sylvania Platinum Share Discussion Threads

[brucie5] 04/1/2020 17:15

pireric
3 Jan '20 - 20:15 - 1635 of 1637
0 9 0
It's a good question Kaos. My understanding
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Great explanation, pireric. I've taken the liberty of copying your post onto the MW site. Hope that's ok.

[petewy] 04/1/2020 14:31

TpPireric & Redtrend I read posts but above my pay grade Duh. Are you buyers?

[pireric] 03/1/2020 20:15

It's a good question Kaos. My understanding is as follows;

Tailings dams, which are a primary source of 'stuff' for JLP etc. to treat, are basically massive ponds or slurries of toxic byproducts that the mining company has discarded from the processing of their primary metals they are searching for. They are an environmental and financial burden for the producer. This is supplemented by the other primary source of fresh arisings from host mines

Ideally, the miner itself would treat the tailings/arisings, and recovery rates of valuable metals within these would be high. But the reality is that the starting point for these primary miners is that they have lots of these tailings dams sitting around, they don't have the process knowledge to treat the material, and they are perhaps unwilling to stump up capital to invest in large scale treatment plants before they learn the process knowledge

To illustrate that, SLP have said in the past "All South African chrome reefs currently being mined contain low grade PGMs which were not extracted until Sylvania proved the economic viability "

Step in JLP, SLP and other smaller players who make their business purely around treatment of these materials. In exchange for the rights/burdens of the tailings/arisings, they give back primary metals recovered during the treatment process, and recover for themselves metal byproducts. It's a win-win from that perspective, and again we come from a position whereby it's less about the primary producer thinking "how much can I make if I treat these myself", to "I can get rid of this burden and make some incremental profit by selling the tailings". Despite tailings treatment having been around in various forms for decades, my impression is that tailings treatment is not that competitive and there's not hundreds of companies with the capability, and so we're not at a stage where there's fierce competition on the premise of how much can be given back to the primary producer. In addition, once the tailings/arisings rights are distributed, it's not like those rights are re-tendered after X years.

All that said, clearly the tailings are seen as carrying value, and so an upfront purchase prices is mostly needed. To put into context, JLP acquired Hernic Chrome recently which gave it the rights to all the chrome in the tailings concerned. That included all present day tailings/material (2.3m tonnes) + all future tailings produced by current mine production and was for $16.4m. That also allowed them to keep all of the chrome in those tailings as well.

Haven't cracked the maths on that JLP acquisition from November 2019, but logically once it's processed, that's a substantial amount of potential earnings acquired for that upfront sum which supports that (at least today), the equation is not about squeezing the tailings treatment companies for profit.

Alternatively, SLP acquired Phoenix Platinum in July 2017 for $6.6m which had 2.2m tonnes of dump resource.

I think I'm also right in saying SLP has been running its dump operations at material levels of revenue since 2008. Absolutely not impossible that the host mines decide to play hardball in the future about share of earnings from the tailings, but doesn't seem to have been a priority in the past, nor today.

[kaos3] 03/1/2020 18:59

a Q: if the price of PGMs keep rising - is it not so that the dump material owners will be incentivized to start to process them self?

if there are profits to be made fast - why not do it alone? they are the owner of the material, they are in the business, they have people and capital.

what are the barriers to enter?

same for JLP and similar processors - not slp specific

tia

[routy] 03/1/2020 11:08

Hi Bought in yesterday - looking strong - long may it continue!

[hickersp] 03/1/2020 11:02

There she blows, onwards and upwards ........ CORA looking strong today too :D)

[mad foetus] 03/1/2020 10:56

When the levee breaks...

[pireric] 03/1/2020 10:21

Platinum approaching 2 year highs. Anyone run a calc of the current PGM basket?

[bookwormrobert] 03/1/2020 10:11

The ask is getting absolutely hammered. How long before this moves up?

[homebrewruss] 02/1/2020 14:28

Platinum up over 2% today:

[red5] 02/1/2020 11:57

yes something up

[rabiddog] 02/1/2020 11:25

It passes the Zulu principle criteria for growth shares. I use Stockopedia which flagged this one up to me in November...

[basem1] 02/1/2020 11:23

Also holding a 6 figure share amount

[basem1] 02/1/2020 11:22

Yes it was a tip of the year for me last year in a competition I have with a friend. Entry price at the time was 16.75p I have put it in again this year too as there is some serious catching up to do as regards a remotely fair valuation.

[mad foetus] 02/1/2020 11:13

Hi basem I think it's on quite a few radars. There was lots of stock available for ages at 37p and I know a couple of traders who were waiting for that to clear. I almost bought in 12/18 months ago but director sales put me off: that was when price was in teens.

[basem1] 02/1/2020 11:09

Welcome aboard MF I was going to wait until 40p until I told a few of the popular threads Seems under the radar still from a BB perspective

[jampot7us] 02/1/2020 11:06

This could explode..buyers in for the update?

[metis20] 02/1/2020 11:05

Current spot prices US$/oz
Palladium 1954
Platinum 970
Rhodium 6050

[mad foetus] 02/1/2020 11:01

I'm in, looks very strong

[basem1] 02/1/2020 10:54

Quiet bulletin board given the depth of buying

[dangersimpson2] 02/1/2020 10:39

Fair value is a very hard thing to define for SLP given that they are a commodity producer and have no pricing power over their products. Any estimate of fair value has, by definition, an assumption of metal prices, and to a lesser extent currencies and costs, in it. Liberium have a DCF valuation of 71p on roughly $3k Rho, $850 Pt, $1500 Pd. I think it would be overly optimistic to value SLP on current spot prices, but the longer that prices remain at current levels the more that the Liberium DCF would appear to be an overly pessimistic valuation.

[basem1] 02/1/2020 10:32

On the larger trades lately at 37p there has been 2 identical ones quite a lot of the time I wonder if they are a buy and a sell with the market makers happy to take nothing for there trouble If there is a line of stock it is in the market makers best interests to have it cleared and gone ?

[pireric] 02/1/2020 10:30

Overhang gone potentially. Ask up to 37.5p

[basem1] 02/1/2020 10:16

Minimum fair value range is 55-65p imo