Sylvania Platinum Share Discussion Threads

[pireric] 25/1/2020 19:48

Helpful to get a grip on some #s, thanks DS2

[dangersimpson2] 25/1/2020 18:21

I believe fresh tailings make up about 45koz of SLP's production so a permanent 30% reduction in Sanamcor production would reduce production to about 62koz. This would reduce 2021 EBITDA from c.$83m to c.$71m, at current PGM pricing.

Given that this impact is likely to be evenly spread across most of SA mining, then I expect PGM prices to remain stronger for longer as supply from SA becomes almost completely price inelastic.

[eeza] 25/1/2020 18:02

Article is dated 22 Jan so definitely been priced in by the market.

[davebowler] 25/1/2020 17:47

Easier than FT link-

[pireric] 25/1/2020 12:10

I hadn't picked up on this until I ran a google search today. But always good to be transparent, and this is a negative for SLP



I don't know how negative, but clearly Samancor is the key source of SLP's arisings. The talk is that Samancor could cut Chrome ore Production by 29%. Hard to tell exactly, but the company might decide to reference this in their upcoming report. And presume it might impact the company's production levels moving forwards.

The good news is that the basket price is very high and the multiple here is low enough to help offset, but worth being aware so less of a shock in the future if anything does come out of it.

[metis20] 25/1/2020 10:26

Q2 2020 results due very soon.

Reported average gross basket prices (USD)/oz -
$1328 for Q4 2019 $1654 for Q1 2020 (ie to end of September)

$1900 for Q2 – my estimate. Increase of about USD$250 due to increase in price of Pt, Pd, Rh. (The big uncertainty about gross revenue is how much the production has been affected by power outages.)

Also, I estimate an AVERAGE increase in gross basket price so far this month of cUSD500 due to rise in Pt, Pd, Rh. If this average were to be maintained thoughout Q3, the gross basket price for Q3 would be about USD$2400/oz. (edited)

(Last time SLP share price was at 45p was two thirds of way through Q1 2020 – since then the average gross basket price has risen very considerably! )

[risa5] 24/1/2020 17:33

Palladium trade body warns of supply pinch in London

Industry group says market is tighter now than it has been for more than 20 years

The body charged with overseeing London’s palladium market has issued a stern warning to its members to ensure trading still functions as it should, as fears grow over a chronic shortage of the metal used in catalytic converters.The price of palladium has surged by 80 per cent over the past year to surpass the price of gold, making it one of the most valuable precious metals on earth, worth about $2,400 an ounce.

The rally has been driven by growing demand from carmakers, who have to use more palladium-rich catalysts to meet tighter standards on harmful emissions in Europe and China.

This week physical palladium in London surged to a premium of over $200 to the price of futures expiring in March — the widest spread in at least 20 years, according to Refinitiv data. John Metcalf, chairman of the London Platinum and Palladium Market, whose members include banks such as HSBC and JPMorgan, said that “extremely turbulent trading conditions” threatened liquidity in the London market, according to a letter seen by the Financial Times. In the letter, Mr Metcalf, who works for the German chemical giant BASF, said there is likely to be a “prolongedR21; shortage of palladium metal in London, adding that the situation appeared worse than when Russian exports were restricted in the late 1990s, following the collapse of the Soviet Union.

Mr Metcalf urged members to bear this in mind when pricing physical metal “for the sake of the London market’s reputation and continued functioning.” Palladium is traded in London by banks and buyers in an over-the-counter market, meaning trading is conducted directly between two parties. Mr Metcalf said similar conditions prevailed between 1997 and 2000, when delays in exports from Russia led to shortages.
But these were eventually resolved by a resumption of shipments from the country, he said. “Although there is no way of obtaining definitive numbers, the level of stocks available to the market today is likely far lower as supply/demand analysis has shown significant fundamental deficits .R01;. . for a number of years,” he said, in the letter. “With that in mind and the fact that today there is no such delay in Russian exports, it is unclear whether there can be a swift solution to resolve the current tightness we are witnessing and indeed it seems possible it may be prolonged.” In a sign of the growing shortage, the cost of borrowing palladium for one month from banks in London has surged to an annual rate of over 30 per cent, more than five times the levels of 2018.That has amplified concerns over the proper functioning of the market. Banks in London often use palladium futures to offset their price exposures, using so-called “exchange-for-physical” contracts.The CME Group, which owns the Nymex metals exchange, said there was a total of 996 such trades in palladium on Tuesday.
That is equivalent to more than three times the amount of physical metal stored in registered warehouses.Tai Wong, head of metals trading at BMO Capital Markets in New York, said he had “never seen a rupture” like current prices in his 15 years of trading. “It’s not a normal market and will not act like a normal market for some time,” he said.

[dangersimpson2] 24/1/2020 16:55

There's been some form of overhang for weeks, even though spot PGM basket up 37% in ZAR this year. Could be a few weeks yet before it clears.

[busterdog2] 24/1/2020 15:52

Yep, spoke too soon, again 🙄

[hickersp] 24/1/2020 15:46

We were both wrong Buster!

[busterdog2] 24/1/2020 13:37

Looks like it, a lot of sells going through and the price is holding.

[hickersp] 24/1/2020 13:29

Is there a big order being filled here?

[hickersp] 24/1/2020 09:44

Readying for a breakout?

[parob] 24/1/2020 09:44

Looks like a super-move breakout is on the cards soon.

[carcosa] 24/1/2020 07:06

"Palladium trade body warns of supply pinch in London
Industry group says market is tighter now than it has been for more than 20 years...

...fears grow over a chronic shortage of the metal ..."

[basem1] 23/1/2020 20:16

It's funny I already had him filtered Must have been spouting rubbish on another board I look at

[metis20] 23/1/2020 20:05

According to

Rhodium is up 65% since the start of this month!

[stoodio] 23/1/2020 19:33

Yeah I checked the same, fkin idiot

[dangersimpson2] 23/1/2020 16:02

There is no way they are going to pay a 30p dividend this year, although you could easily see 30p+ returned to shareholders over the next two years if PGM pricing remains at current levels and they don't have a better use for the cash. They will obviously want to hold some cash as a reserve, but any large capex would depend on Sunamcor building new Chromium mines and the current Chromium price doesn't really support that IMO. I would definitely push management to return any extra cash as a special dividend rather than holding it in the hope that Sunamcor build more mines or other corporate deals become available.

[iamgreat1] 23/1/2020 14:07

30p coming soon boys

[jampot7us] 23/1/2020 04:10

Mentioned in todays shares mag ref inc of palladium price...