| Date | Subject |
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28/7/2021
20:03 | tigerbythetail: Rhodium seems to be settling into a new range for now - let's call it roughly $18K - $19K. We've all been spoilt by the months when it was in the high $20Ks, but objectively this is a fantastic price for THS.
Hopefully, the gradual improvement in the "chips for cars" situation should reflect in higher world vehicle production and higher demand for rhodium over the next few months. 90% of rhodium goes to auto production, and the chip problem cut world vehicle production in the region of 20%. So it has had a sizeable effect on a very tight market.
Iridium also stable at $5,600/oz and Ruthenium at $750/oz.
Note also how chrome prices are improving.
I'm very confident in the long term value of THS, but I can't ignore how thin trading is currently. This stock needs something - some news or a well-followed tip or a new institutional investor buying in - to jolt it into life.
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27/7/2021
07:59 | coco2020: Excellent post from tones77777 this morning on the THS valuation.
''
I notice that SLP have had their quarterly update released today for quarter ending June 30th, 2021. A high level comparison between Tharisa's results for the same period 30th June 2021 shows the following
SLP (Taken from RNS dated 27/07)
PGM Production (4E basis) for the quarter - 16,289 koz
Conversion to 6E for comparison for Tharisa - 23,270 koz (based on a ratio ?of 10/7)
Revenue for the Quarter - $48.7 mil
EBITDA - $28.7 mil
Tharisa (Taken from RNS dated 09/07)
PGM Production (6E basis) - 39,000 koz
Average basket price $3,804
Revenue from PGM Production for the quarter - $148.35 mil
Chrome Production - 379.7 kT
Average Chrome price $160/T
Revenue from Chrome production for the quarter - $60.75 mil
Total Revenue for the quarter - $209 mil
EBITDA for Tharisa is not exactly easy to calculate as this is not published by the company however from memory and my previous calculation the 'All in Cost' for PGM is c$1380/oz and Chrome around $105/t. Assuming a 10% increase in these costs to counter for any adjustments thus using PGM cost of c$1520/oz and cost of producing Chrome concentrate of c$116/T, I get the following EBITDA figures,
EBITDA for PGM - $89 mil
EBITDA for Chrome - $16.7 mil
Total EBITDA for the quarter - $105.7 mil
Therefore to compare the headline figures for SLP and THS,
Total quarterly revenue of $48.7 mil for SLP vs $209 mil for THS, whilst the EBITDA for the quarter for SLP was $28.7 mil, the expected EBITDA for the same period for THS is c105.7 mil.
The market cap for SLP is £316m vs THS of £318mil. From what I gather THS is producing a lot more PGM ounces (more than double after factoring the 4E to 6E reporting consistencies), have a huge Chrome production line (whilst SLP has none) and THS also has a significantly higher life of mine of 54 years (including 14 years of open pit).
Make no mistake SLP is NOT overvalued, in fact it is under valued given their performance, margins and balance sheet. However my point is that if SLP is value at the same marketcap with those operational metrics and asset mine life, then THS deserves to be a whole lot, well substantially higher!!
Summary:
Just goes to show the sheer value to be had here in THS. If the opportunity arises I will add more this week as it is clear which PGM miner has more value and disconnect from the market cap. As I've said previously, whilst THS has had their best quarter and half year results to date over the last few weeks/months, the drop from the 160p to 110p was not a reflection of the company but wider market concerns. On the contrary the company has gone from strength to strength and now presents simply the best value mining share on LSE - simple as that.''
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26/7/2021
08:26 | coco2020: Martin, whilst I understand the frustration I disagree with your views. Make no mistake I'm here to make money too but there needs to be a sensible use of internal cash generated, not to just appease short term share holders. Tharisa are paying a good dividend and I certainly expect them to increase the payout as NPAT increases however they have some stellar projects including Salene Chrome, Karo Platinum etc. which can go to significantly add value to the company.
A stock as undervalued as this cannot remain under the radar too long, eventually the patient will be rewarded. The time will come when this would gloriously re-rate and whether that is just a normal market correction, buying frenzy from institutions and retail following alike or simply through Tharisa's own share buybacks. Eventually it will happen but for now its hard to lay blame on THS for the drop in price and lack of visibility.
The drop from 150-160p a couple of months ago to the current levels was not a reflection of the company as they've just posted their strongest financial/operational quarter and half year results to date in their history! Whilst the market knocked off c45% of its value, internally they've made more money than they ever have in the comparative period. Besides Phoevos has been doing several interviews and investor events to keep the PR going. His family owns over 42% of the company so they are fully vested too!
I have no doubts whatsoever that value will prevail. I've been invested long enough to know that some stocks is worth buyin/adding and holding for the eventually rerate to fair value.
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21/7/2021
12:55 | tigerbythetail: I think "do not think" is right on the money.
SLP is a well-known and heavily-traded stock. THS seems to be obscure. Just look at the difference in volumes.
I still make THS the better long term play - no disrespect to SLP, which is still a great company.
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14/7/2021
12:40 | brucie5: All a bit unnerving, particularly when one holds THS + SLP. But there again, the share price does does not equate to value, which is function of earnings, and for me, sustainable cash dividends. So I would say, watch, but don't panic. The metrics appear to be outstanding.
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02/7/2021
08:20 | tigerbythetail: Hi Sotolo!
I'd agree that THS isn't "cool" right now. Trading volumes have always been low, and now they've dropped even from that level. I don't know what Tharisa needs to kick it into life - maybe some surprising piece of good news (completion of Vulcan plant? Karo update?); maybe the share being tipped somewhere; maybe a confirmation that the institutional selling has stopped; maybe (finally) the annual results due in November and the next dividend.
I suppose it all comes down to that old adage "price is what you pay, and value is what you get". And you do get a lot of value for your money here - a highly profitable, growing, well-managed, net debt free, dividend-paying company at a very low price (considering its metrics). There are good reasons why Tharisa is rated 99/99 on Stockopedia and shows up on so many stock screeners. I'm not expecting fireworks here in the short term, but I'm very happy to hold, and to add on weakness, too.
All in all, after the excitement of last year, when I did make a crazy return, I'm finding that in 2021 I want to be much more cautious. I want value, I want dividends, and I want to keep a large balance in cash as well. I'm not buying this narrative that everything is hunky-dory out there in moneyland.
(And I should add, I think it's too early to be buying gold / gold miners as well; though there time will perhaps come again).
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24/6/2021
04:27 | redtrend: AimSurfer - to try and answer your question what PGM price do they break-even, it's best to use the most recent 2021 Interims Ending March 2021:
PGMS
PGM Cost of Sales: $96.812m (based on Forex 15.3)
With PGM Oz of 75,100 Oz, the all-in cost per oz for PGMs is $1,289oz
With ZAR strengthening to 14.3, the all-in cost is likely now $1,379oz, however production should increase in 2nd half (85k to counter ZAR strength and increased diesel prices).
I call it "all-in cost" rather than AISC (All-in including for Stay in Business Capex), because using the cost of sales metric from interims includes for D&A and impairments (non-cash costs). Simplistically this broadly mirrors the SIB Capex.
Based on the current 6E PGM basket ($3,225oz) and minus refiners fee of circa 13-15%, the THS PGM sale price is circa $2,800oz.
So there is still a very large margin of $1,400oz x 160k oz (annualised, not taking into account planned increase to 200k oz over 2yrs or so) = $224m.
CHROME
You can do the same number crunching on Chrome using Interims. But to summarize, using $155tn Chrome, all-in cost of $105tn, I calculate margin of $63m for Chrome based on 1.5m tonnes.
Post Sept 2021 for FYE Sept 2022, THS should have annualized 2MT chrome thanks to Vulcan project. AS the operating cost of Vulcan is very low (it was stated in one of the investor calls but can't remember off top of my head), pro-rata basis with 2MT chrome, this should significantly lower all-in cost per tonne and increase margin to $95-100m based on $155tn Chrome.
So not including the Marketing and Agency arms which bring in small profits of circa $2m nor future growth prospects in Zimbabwe expansions, SA THS vertical expansions/ refining initiatives, we're looking at margin of $287m - $324m, albeit once you take into account SA Tax and the THS Non-controlling interest (BEE), you're looking at post-tax margin of $172-192m (albeit depends how accountants crunch numbers on D&A etc.), when THS current market cap £338m ($473m).
So THS still on a paltry PE of 2.5 - 2.75 even with softening of PGM basket, when it has a 50+yrs life of mine (14yrs open pit + 40yrs underground)!
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18/6/2021
10:59 | sipps: today at 11am - SLP up 6%+ - THS Down -2.8% - wheres the logic... cant help but think that the now seemingly ended previous selling from Fidelity etc has affected confidence as to whether the share price will rise to reflect THS true value - or at least closer to it .. on every comparison THS is way better value than SLP with tons more upside, mine life, basket price average etc...
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17/6/2021
15:21 | sipps: spread greater than dividend .. also price drop today greater than dividend. I think most mining stocks affected by FED and gains over last 6 months - risk / reward not so good ... but THS still way to low...
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12/1/2021
09:34 | redtrend: Not sure why you think this is uninspiring - they've had a $26m increase in net free cashflow in 1 single quarter, moving from $21m Net Debt to $5m Net Cash.
That equates to $100m+ free cashflow per year based on market cap of only £345m.
However since this update, THS 6E PGM basket has increased by $600 per Oz to $2,995oz and Chrome increased by $10tn to $145tn. If those prices were maintained, free cashflow would be in $200m p.a. region.
I don't base my investment in THS on PGM basket staying at such elevated levels, but even on $100m free cashflow p.a. this is significantly undervalued.
Whilst the dividend investors will all receive in Feb is now only 2% (they still need to announce ex-div date), if these PGM prices continue I would hope THS think about a special interim dividend in the 7% region when they provide interims in April/May time.
Once Vulcan Fine Chrome Project is complete ($50m Capex), FY 2022 starting 1-Oct-2021, I would expect 10% dividend yields with the cash THS are throwing off.
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