Tharisa Share Discussion Threads

[tigerbythetail] 20/9/2021 08:29

Hi Sotolo! For your CEY comparison, I think you have to allow for the fact that Centamin (CEY) has about 21p per share of cash and no debts. At 10p CEY would be buy of the millennium. Even at 30p I'd be piling in. But, then again, THS is net debt free right now and the cash is piling up quickly. So it does seem to be exceedingly cheap. Personally, I'm not buying anything(*) until I see that the Evergrande bankruptcy is on its way to being resolved in such a way that it doesn't set off market contagion (a la Lehman Brothers). Once that risk is cleared, I'll be adding at these levels. (*) Is it time to be thinking about shorting some of the more ridiculously overvalued US tech names?

[sotolo] 19/9/2021 19:10

Thanks Plat. Interestingly I read that Global vehicle sales are expected by McInsey to rise a bit more slowly in this decade than the last. About 2% a year. Obviously electric world share will grow more than that, which implies falling ice sales and a rhodium surplus. However the big question is how many vehicles are currently sold without cats in the third world that will need them legally, or better ones, and if this will more than obviate the overall ICE production worldwide? Any thoughts? This also perhaps weighs on THS price

[plat hunter] 19/9/2021 11:52

I also think the risk of ev's to pgm and hydro carbons for that matter, is over played.Just taking India for example, they're decades away from being able to even think of becoming an EV only country. Similar story over in Africa, then there's the middle east, without hydrocarbons there's no economy for them. This isn't a quick fix solution for rich western cities. It's a global problem, with global consequences of cause and effect. Hybrids with ever more efficient cat's will be in demand for decades yet imo.

[sotolo] 18/9/2021 21:57

To put it another way if Centamin was on the same PE as Tharisa it’s share price would be 10p, and I would certainly buy Centamin at 10p, even if I expected gold to fall. On rhodium prices, from today’s FT “it takes:only a small swing in the balance of supply and demand in commodity markets for prices to soar or sink”. So slightly lower car production or more electric can lead to the slump we are in, plus the excess supply will leave an overhang. But if ice production rises maybe 10% again next year then price should soar. Sadly the current slump is entirely explicable and has further to go. Happily Tharisa is still very cheap, though steel prices have halved so will cho I’m follow?

[tonytyke2] 18/9/2021 09:07

I see that the price for Rhodium was up by a further 250 dollars on Friday's last price update. So quite a bounce overall in the day.

[sotolo] 17/9/2021 20:57

Marin, Actually I did post on rhodium rising yesterday, I said this is a bounce in oversold rhodium, and then it will turn back down, as others have also said here as seems likely for all the reasons I have said before and which have led to the three fold fall. However there is no need for you to believe what I say if you don’t want to, you may be right that rhodium soars up now and me wrong, I hope so. As said I buy and hold because the company is still cheap with rh at $5000. Now stop being grumpy and if you appreciate Tharisa as I do, top up oh and have a lovely weekend

[tonytyke2] 17/9/2021 17:07

Have a good weekend Martin!

[martinfrench] 17/9/2021 16:36

its funny sotolo, you post endlessly about rhodium falls and then it rises 10% and you say nothing ? strange isnt it, and dont believe a word you say. people that are negative on things dont tend to buy / hold unless you are the worst investor in the world i can see a situation where the mkt will pay us to take rhodium off our hands, i mean its that pointless and worthless now isnt it ?

[tonytyke2] 17/9/2021 15:25

Thanks TBTT, will give it a read this weekend.Thanks for your ongoing comments, valued research and input. Really appreciated!Have a good weekend.TT

[tigerbythetail] 17/9/2021 10:39

The latest Heraeus report is well worth reading. Many of our questions answered! www.heraeus.com/media/media/hpm/doc_hpm/precious_metal_update/palladium_standard/HPM_-_The_Palladium_Standard_2021.pdf#msdynttrid=oCHhpb_riwx9TU0xuY67p-IpJMiZz3NJclsc8yuInxc

[tonytyke2] 17/9/2021 10:06

Ok, so Rhodium up around 10% this morning on Johnson Matthey base prices.

[sotolo] 17/9/2021 07:59

Great conversations. I am not glum always,I just thought PGM’s were overpriced and would fall, and more so recently as slip from deficit to surplus with chip shortage, which surplus as Tiger says may take a while to work itself out. I continue to hold, as Tiger and other point out, for this being worth its value on chromium alone, so PGM’s are cream. I see no inconsistency in holding as I consider very undervalued while expecting this PGM rise to just be a bounce in PGM prices before the fall continues. Our share price will probably go lower, that is not gloom just rational expectation, but as I consider fundamentally undervalued and I am not a trader, I shall continue to hold because of my OPTIMISM, that fundamentals will out in the end plus this year we should make a third of our valuation alone!

[tonytyke2] 16/9/2021 22:34

Thanks Wimbled.

[tonytyke2] 16/9/2021 22:33

Thanks TigerByTheTail, I have been reading more recently due to all the logistics issues, that some car manufacturers are now moving from a 'just in time' build model to a 'stockpiling' approach. This could start having a positive effect on the Rhodium price itself, the chip issue should also start resolving itself from Q4-21 onwards. Thanks for your help, I am looking to add more around this price, but need to raid my wife's piggy bank first....Ha Ha!

[tigerbythetail] 16/9/2021 20:56

Hi Tony! IMO, it's better to use the JMAT (Johnson Matthey) price tables for rhodium, which change 4 times every day. They represent the price JMAT are asking for rhodium sponge, which is what the car industry uses in cats (c. 87% of total Rh demand). I believe (?) the Kitco price reflects the tiny market in rhodium coins and bullion, and it bounces around with incredible volatility. In particular, when rhodium drops Kitco lets the bottom fall out of their price - I think because they don't want to buy any rhodium coins in a falling market. (Kitco prices for platinum and palladium are good, though - they reflect the spot market in these two metals, which are freely traded). But, yes, rhodium does seem to have stopped falling, and even bounced a bit. Hopefully, automotive buyers are coming in at this "bargain" price.

[wimbled] 16/9/2021 19:26

I've shares in PAF and their BB header has displays PM prices including Rh. Link below. https://uk.advfn.com/cmn/fbb/thread.php3?id=11167530 https://www.kitconet.com/images/quotes_7a.gif

[tonytyke2] 16/9/2021 19:00

So is that around a 15 % increase in the Rhodium price this afternoon on Kitco.....Mmmmmmm.

[redtrend] 16/9/2021 16:14

The future Chrome profits can be forecast from the last Interims. With a Chrome AISC of under $100tn and so as not to "superglue your crystal ball", you have to apply 2MT of Chrome. So at Chrome $175tn, margin of $75tn x 2MT = $150m, before SA Corp Tax and BEE Interest. And that's being conservative considering the 2MT Chrome increase through Vulcan Project adds little cost and will push down cost per tonne through economies of scale. Being extremely bearish short-term and bearish long-term on the main commodities THS mines is a bizarre combo to stay invested in. I happen to disagree with the prognosis ICE cars will be in decline as a total produced any time soon and any incremental decrease will be outweighed by the increase in PGM loadings per car. In 2008 a group of "experts" predicted there would be no ICE cars by 2020... Quite. The same on these 2030/2035 targets will come to pass. The UK is already way out on their target and will be compounded over the years. EU auto makers have already started their lobbying to push any deadline from 2035 to 2040. There is a complete lack of infrastructure, step change in technology (batteries, charging times etc.) no plan on how lithium/ cobalt mining will be ramped up (clue - it can't, unless Cornwall is the Saudi Arabia of Lithium!) and I have no idea when this pie in the sky new battery tech Canetoad mentions on LSE board with no lithium will be ready to actually roll out. Rather than us arm-chair experts try and 2nd guess PGM demand, JM is far better placed: hxxps://matthey.com/-/media/files/pgm-market-report/jm-pgm-market-report-may-2021.pdf

[tigerbythetail] 16/9/2021 14:49

Hi Sotolo! By the way, just to point out the bad result from FY 2019 was caused by the investment required to switch to owner mining from contractor mining, which has since paid off handsomely. You can see that when those FY 2019 results came out, there was a lurch down in share price from 106p to 81p. (The crash down to the low of 45p in March 2020 was down the wider market crash). Well, isn't Tharisa in a far stronger position now than it was then? Net cash positive instead of debts, own fleet mining, Vulcan plant, much higher PGM basket price (even now), decent dividends, etc. In short, the current share price is a bit perplexing, and IMO manically depressively overdone.

[tigerbythetail] 16/9/2021 14:28

I think you need to separate short-term effects (i.e. no chips for ICE cars but lots of demand) from medium-long term ones (i.e. end of cats as ICE engines die out). Right now, we're trying to judge how much speculation there was in rhodium and palladium which has now washed out of the market, releasing ounces, and how much and how quickly automotive demand will recover. If the car industry were working normally, both rhodium and palladium should be in deficit, but take out c. 25% of demand (30% less cars x approx 85% automotive use of both metals), and the two metals must currently be in surplus. When does that reverse again? I'm not sure we'll get back to $30K rhodium again, (because the car makers (esp. Ford) were caught with their pants down the first time around). But (IMO) Rh and Pd prices should strengthen (or at least hold) through 2022-2024. Famous last words, but I don't see the doom scenario of palladium returning to $1K/oz and rhodium to say $3K per ounce for now. After say 2025, we're looking at medium term factors coming into play, and I certainly don't expect Pd to be trading at $2K an ounce by 2030. More like $1K on a best case basis. And rhodium will also get hit hard by the end of ICEs. Hopefully, the possibly coming hydrogen economy (platinum, iridium, ruthenium) can save the overall PGM basket price, but it's an open question. It's up to Tharisa to ride the change here. And hope that their estimate of 5% CAGR in chrome through the 2020s is correct. Don't forget that Vulcan will add about 400,000t per year of ultra-low cost chrome ($10/t? opex). So that should help chrome profits very nicely in the future. All told, Vulcan is looking like a clever investment right now.

[jon4567] 16/9/2021 14:21

Hi Sotolo why so glumy all the time? Do you ever look at the positives in life?

[sotolo] 16/9/2021 13:45

Tiger I don’t mean to be Cassandra but if you superglue your crystal ball you will see it says this is just a bounce in very oversold rhodium, so more fall to come; and if you read Canetoad and others over on the other board you will see mid term concern on the rise of electric cars. This is not only in Europe and US but also China which has mandated 40% of cars sold must be electric by 2030 which is not that long, and a small world change in total ice affects the supply demand ratio for rh etc and so the price radically as we have seen with chips. So if PGM profits become smaller my question is how much profit do we make from chrome now and what are the prospects? Interesting to see in 2019 made overall roughly £5m and in 2020 £40m, so our profit swings hugely but if was to settle around £25m would be a PE of 10 which is respectable - tho 2019 dividend was only just over a ha’penny which would be half a per cent at this share price! However this was before extra SA tax

[tigerbythetail] 16/9/2021 12:42

80p? Maybe. Maybe not. My crystal ball is broken. But, rhodium and palladium have stopped falling for now - palladium has bounced back to $2,000 / oz (spot price) and rhodium seems to be holding at about $11,250 / oz (JMAT). It's worth opening THS's chart out to a five year view and comparing it against the basket price for PGMs (and chrome) over that period. It's trading way under its historical norms. And yet business has never been better for THS. The company is net cash positive, (with a huge trade receivables - trade payables balance as well), has gone from contractor mining to its own fleet, and has built (presumably all but complete now) the Vulcan plant, which will supply an extra 400,000t of ultra-cheap chrome per year. Barring unexpected bad news, it doesn't make sense for THS to be trading even at today's price, let alone 80p. It's taking far longer than we all hoped, but the automotive chip supply chain will sort itself out eventually, and actual demand for vehicles is reported to be very strong.

[tenpercent] 16/9/2021 12:02

No support on the chart now. Next stop 80p

[scooper72] 16/9/2021 11:11

I'm down about 30% but am thinking with the dividend at over 7% and the div cover being 4x it probably makes sense at this point to hold.