Tharisa Share Discussion Threads

[ukgeorge] 29/6/2023 14:39:56

Palladium fundamentals much better than platinum

[tigerbythetail] 29/6/2023 14:29:16

Epic bust in PGM prices now - platinum below $900, palladium below $1200, and rhodium at $2500 (all Kitco prices, so take the Rh bid with a pinch of salt).
Most price predictions I've read for PGMs this year has been flat-out wrong. I still wonder if Russia /Norilsk Nickel weren't holding a bigger strategic reserve of PGMs than the market thought, and if this isn't that reserve being liquidated en masse. Demand for these metals hasn't suddenly vanished, so the cause of this price crash is a bit of a mystery.
At some point the South African deep miners are going to start cutting back production. (And they are more reliant on Eskom than THS as well). So the market will eventually balance again.

[husbod] 22/6/2023 13:35:00

This share has been on my watchlist for some time and I keep reading very positive reviews of the company. But as a substantial holder in JLP and SLP already (and seen their values sink) I will not be increasing my exposure to South African miners until and unless there is some indication that the government is getting a grip on the endemic corruption and incompetence that is ruining a great country. Whether that will happen in the short term must be highly unlikely so THS will just have to stay on my watchlist for the time being.

[tigerbythetail] 22/6/2023 09:54:52

Hi Sotolo!
There's a couple of good posts on LSE about the (very low) valuation of THS, so I won't bother to repeat here.
I'd add that IMO the biggest risk here is not anything connected to Tharisa or PGMs, as such, but geo-political. The SA government is behaving / has behaved with incredible (almost mind-boggling) stupidity, and the consequences for SA may be dire. As the 33rd biggest economy in the world, with huge structural problems (e.g. Eskom, but not only), SA simply can not afford to get sanctioned. And yet...
(FWIW, this is why I'm holding back for now on all SA shares).

THURSDAY JUNE 22 2023

South Africa’s perceived ‘friendship217; with Russia is already severely hurting the southern African country economically – with potentially full-blown United States sanctions not yet ruled out.

The Americans are still considering what to do about South Africa allowing a specifically sanctioned Russian cargo vessel, the Lady R, to dock at the Simonstown naval command near Cape Town, there allegedly loading weapons, or weapons-related cargo, early last December.

Last month, the US ambassador made an extraordinary public allegation that the South Africans had not only allowed a sanctioned vessel to dock but had further violated international sanctions imposed on Russia for its invasion of Ukraine by supplying Russia with unspecified military equipment, believed likely to include electronic components for high-tech weapons systems.

The subsequent diplomatic row triggered a crisis in US-SA relations, that rift still not having been resolved, despite several missions to Washington by various South African delegations, one sent by President Cyril Ramaphosa, another by the opposition Democratic Alliance.

Even without further direct sanctions from Washington over the Lady R saga, the impact of South Africa’s perceived leaning towards Russia put severe negative pressure on the South African currency, which plunged to its lowest-ever value against a basket of currencies including the dollar and the euro.

hxxps://www.theeastafrican.co.ke/tea/news/rest-of-africa/sa-economic-crisis-deepens-as-friendship-with-russia-spurs-4279382

[sotolo] 21/6/2023 08:15:02

Gosh nobody has posted on this board for a month now! It is getting a little scary as the PGM price continues to fall week by week as it has for a couple of years, with no sign of an end, but now chromium that has been our saviour has turned down too, along with the Chinese economy. Now pgm basket around $1600 and a fair bit less for Karo and chromium down over 3% this week or around 290. Does anyone have any idea of our rough aisc at here prices for Tharis and Karo PGM’s and for the Tharisa chromium. I understand it is not easy as the mix has changed with PGM halving and chromium doubling, I presume that more (almost all) profit now comes from chromium.
And the biggest question for Last, will we have enough cash flow to fund Karo, or will we have to borrow more at penal rates

[ukgeorge] 24/5/2023 09:31:59

for inventories, I think it can mean a couple of things, so you would have spare parts, diesel and other consumables, that are bought as stock gets lower then used so the costs of them might be in one or a couple of hits but then they only count as operating costs as they are consumed.

Then there is the end product the metals. These wouldn't be shipped out on a daily basis, so again I would think the $14.9M is just simply how much metal and say spare parts they have.

I guess it can be negative if a large amount of a consumable has been delivered but not paid for. I'm not an account so could be wrong.

[mjneish] 19/5/2023 11:41:25

If you look in note 7, the cost of sales is broken down there. The main one is change in inventories, which has swung from USD -12.9 million to USD +14.9 million. All other factors more or less cancel out.

I don't know what "change in inventories" means in this context, so could someone maybe explain? Thanks.

[whitehunter] 19/5/2023 09:57:54

“White hunter, ye if dividend was maintained but it won’t be“

Wrong again Sotolo

[moneyman50] 19/5/2023 09:09:04

Sorry post below should read costs of sales up $30 million!

[tigerbythetail] 19/5/2023 09:08:14

I agree it would be good to know how much of the increased cost of sales is down to one-off factors (i.e. flooding), how much of it is down to increased fuel and power costs (which may come down again), how much is down to currency movements (which again may reverse), and how much is effectively permanent.
Also, you're right to wonder how well Vulcan is working.
All that said, the results are as I expected, the dividend is welcome, and I'm optimistic for the future. The only reason I'm not buying more this morning is that I worry about South Africa in general, and I want to keep my exposure to it within limits.

[moneyman50] 19/5/2023 07:47:20

The interim results are slightly disappointing -turnover is virtually the same but cost of sales are up $40 million.Why have production costs increased so much and where are the supposed Vulcan efficiencies

[arlington chetwynd talbott] 18/5/2023 11:31:40

Is South Africa becoming uninvestable?

[andydaf] 18/5/2023 06:42:36

Bought a few more yesterday,lots of political risk but i take the view its everywhere including the west.Rand has suffered but this should help Tharisa.Crucial thing is where pgms go from here.Tharisa aside from being in south africa and zimbabwe is stupid cheap imho but like anything its a gamble.GLA

[tigerbythetail] 17/5/2023 08:52:20

The 3pm RNS caught me out yesterday, so I'm coming to this late...
Market over-reacting. Happy to buy at 84p. Not really expecting a quick return from this (except dividends), but looked at in the medium term, this has to be a great price to buy in at.
My chief worry is South Africa completely falling apart. So I'm buying within limits.

[lennonsalive] 17/5/2023 07:12:16

Why sneak it out at 3pm thinking nobody would nice

[sotolo] 16/5/2023 22:53:01

I think a bid is highly unlikely as the family are very unlikely to sell at this low value.

[moneyman50] 16/5/2023 19:10:15

A pe of 4 is very low and whatever the company does its shareprice gets hammered.
Some shortsighted investors appear to have sold today because of the fall in the EPS which is only due to the Karo fair value adjustment!
The chromium price at its current level will go a long way to compensating for the lower Pgm prices -it is still hovering around $300 level and Pgm and chrome production levels suffered due to bad weather in the first halve.The actual EPS from operations has increased and therefore the dividend should not be cut unless the directors wish to crash the shareprice further -.perhaps someone will put us out of our misery and make an offer for the company.PGM prices are cyclical and may well increase

[stemis] 16/5/2023 16:32:59

Nothing in trading statement that should change markets view of PGM price

[sotolo] 16/5/2023 15:50:03

Rear view mirror, PGM price considerably lower now than ave for first half and chromium doesn’t make up for it, so PE more like 4 and if PGM stays lower then 5, and only so low because share price so down.

[stemis] 16/5/2023 15:24:04

H1 profits 17-18c/share (= 13.6p-14.4p) so currently on an annualised P/E of 3.3-3.1...and the price falls

[tigerbythetail] 12/5/2023 18:32:25

More on the previous subject - including on possible / probable US sanctions actions...
www.themoscowtimes.com/2023/05/12/southafrica-a81125
For sheer wrongness and boneheaded stupidity this story takes some beating. It's self-harm.
It won't affect Tharisa much directly - they sell mostly to China. But I can see South Africa getting a country rating downgrade on the back of this.

[tigerbythetail] 11/5/2023 21:50:36

This will act as a deadweight on the rand and all South African stocks:
www.theguardian.com/world/2023/may/11/us-accuses-south-africa-of-providing-arms-to-russia-reports
It's frustrating that the S.A. government could be so stupid and wrong-headed. I imagine economic sanctions of some kind or another will follow in due course.
It's not like South Africa didn't have enough problems already, without adding to them, is it?