Tharisa Share Discussion Threads

[loganair] 04/2/2024 11:01

The upcoming earnings season for miners such as Implats and Amplats is likely to hold a few nasty surprises — but longer term, some analysts are still bullish:

Earnings from platinum miners in February will tell the story of last year’s wipeout in share prices. According to RMB Morgan Stanley, earnings before interest, tax, depreciation and amortisation (ebitda) for the largest players, including Anglo American Platinum (Amplats) and Impala Platinum (Implats), will be 50%-100% lower. Dividends will be cut to “minimal levels” and capital expenditure will be slashed, it said.

The year 2023 was not a good time to be a platinum group metals (PGM) miner. Amplats, Implats and Sibanye-Stillwater shed between 64% and 36% in value as prices for palladium and rhodium cratered. After a hopeful ripple in the palladium price during the first two weeks of January — likely driven by traders covering short positions — another price correction followed. Share prices so far this year have been a continuation of last year’s form, slipping by between 12% and 14%...


The rest of the article is behind a pay wall....

[soilderboy] 04/2/2024 10:05

Palladium is down 38% so far this year and touched $1,083 last week, its five-year low, amid rapid rise of palladium-free electric vehicles and platinum for palladium substitution."Until there is a narrowing of the price differential between the two metals, there is little incentive for manufacturers to return to using palladium at the levels they once were," said David Russell at GoldCore.I have been reading the forecast for 2024, I was under the impression we had bottomed here, but now I'm not so sure. Even though we look incredible undervalued, you can't help thinking we have a long way to fall.

[loganair] 02/2/2024 19:58

Nicky Shiels Head of Metals Strategy at MKS - Platinum 50% of mining supply under water, loss making = reduction in supply which is going to exacerbate the already on going supply deficit.

Low price of EGMs shows the West is already in a recession.

[tigerbythetail] 11/1/2024 20:29

Solid production update from Tharisa Mine today - in a quarter which has been problematic in the past. So that's good.
I note that Tharisa are also floating the idea of raising "ring-fenced" debt funding for Karo. This would be excellent, but I doubt it is achievable. The combined risks of funding Zimbabwe and funding a new medium-cost PGM mine build against the background of a PGM price slump are simply too high.
Personally, I think building Karo is simply a mistake - and not a small one. The assumptions behind it were way too optimistic, and the whole shebang reflects badly on Tharisa's BoD. Where were the checks and balances? The skeptical voices?
IMO, the share price here would rise substantially if the money spent on Karo so far was simply written off and the whole project cancelled.

[sotolo] 04/1/2024 20:12

Which way? Down through 1000 sadly, palladium worse

[riddlerone] 28/12/2023 08:05

Platinum through $1,000 , chart improving

[essential] 22/12/2023 12:37

Been watching these for a while and night today as chart looks to be breaking out

[tigerbythetail] 22/12/2023 10:30

Platinum price also improving - $980 now, well off the lows of $830 or so. This is more or less the top of the recent channel, so it will be interesting to see if it can break-out over $1,000. Let's hope so.
Rhodium and iridium, which together are highly significant for Tharisa's overall basket price, both stable.
In short, things are looking up for PGMs. THS share price hasn't really moved to reflect this yet.

[sotolo] 19/12/2023 12:37

Palladium is only 14% of PGM profit at Tharisa even at this 30% risen price so the basket is still not that healthy, but at Karo it is 40%, Karo is essentially a palladium and platinum mine with 14% rh and the nice bonus of 14% gold. Centamin and Hochschild perking up. Wish this would, bu then their metal is rising. Happy Xmas.

[tigerbythetail] 18/12/2023 15:18

Palladium now back over $1200 and up 30% in a few days. This steep rise happened just before quad witching (options expiry) on Friday and has continued since. Most likely the metal had been shorted half to death, and the shorters have been hurriedly buying back in.
Anyhow, overall PGM basket price looking considerably healthier now.

[whitehunter] 17/12/2023 18:13

It might be better for us in the long run if management admitted they made a bad call and limit the damage any further. But what do I know other than investing in this company has made me poorer rather than richer.

[rjmahan] 17/12/2023 17:14

Downside is they are priced at below book, but instead of buying back stock or returning capital they insist on investing in Karo - the economics of which look worse by the day.

Its common, but this sort of action is why I need to severely limit my stake.

[binghall] 15/12/2023 11:43

There was a very positive piece about undervalued junior miners in MoneyWeek magazine 3 weeks ago. Tharisa was one of those discussed and the writer used the words 'ludicrously cheap' and pricing Karo as a 'liability, not an asset'. It has obvious risks but, on balance, I tend to agree. It also states Tharisa supplies China with 10% of its annual chrome requirements, which I did not realise. It might be tested in the short term but if the energy transition keeps apace this should do very well.

[stemis] 15/12/2023 11:28

I believe there's around $330m left to spend on Karo. THS has $116m net cash & generated (pre capex) $105m in 2023 so should be able to avoid significant net debt.

So even if you ignore it's cash, still valued <2 x 2023 ebida. That's with zero value for Karo.

Any recovery in PGM prices & this will fly

[nigelpm] 15/12/2023 10:37

Too cheap as per excellent posts above.

[lennonsalive] 15/12/2023 10:28

Wondered why the price shot up

[stemis] 14/12/2023 17:13

You think this is tumblewood you should see some of the other boards I follow.

On pretty much every metric this looks ridiculously cheap

0.9 x 2023 ebitda
P/E of around 1.5
35% of NAV (or 24% if you want to strip out cash)

Downsides are that quite a bit of cash is going into Karo which market obviously considers worthless. Then there is the volatility of prices (ok, PGM prices are already depressed, but there's potential downside to chrome prices). You'd have though that would be more than in the price even at 100p but this is the market we are in.

[tigerbythetail] 14/12/2023 16:28

Commentator's curse! Having dissed palladium above, it's now rallying hard. It's up about 10 per cent today, and the PGM miners are following...

[tigerbythetail] 14/12/2023 14:43

Tumbleweed here.
For my money, Tharisa offers amazing value at this level. If you adjust for cash, then the P/E is only a little over 1.
I'm not sure if the Karo investment will turn out to be wise in the medium term, but THS is still a well-run and profitable enterprise. And though it's really a growth stock, it even pays a reasonable dividend.
So I'm buying at these levels when all is quiet. I'm also thinking of buying a platinum ETF as well (but not palladium!), because I'm confident that at some point prices will turn.

[stemis] 14/12/2023 11:13

Also ridiculous that they will take 3 months to pay it !!

[basem1] 14/12/2023 08:03

Large dividend cut too inspite of the earnings figures

[nigelpm] 06/12/2023 20:00

Lack of trust in management but as Stemis notes it's priced at a ridiculously low level.

[stemis] 06/12/2023 11:16

EPS of 21p compared to share price of 59p and that's without accounting for the fact that the company has 33.5p of cash. So a cash adjusted P/E of 1.2 assuming Karo is worthless...

Clearly overvalued

[nigelpm] 06/12/2023 08:51

Yes - but market cap has gone so low that you'd probably consider it irrelevant to the current price.