Tharisa Share Discussion Threads

[andydaf] 15/2/2024 19:46:36

Time will tell here but i do not see how anyone can predict what pgm prices will be in 2025.I hope they recover and karo is a success but i can not be sure and no one can.At the end of the day Tharisa will keep financing it and thats the gamble.PGM prices improve and Tharisa is worth multiples of what it is today.Karo fails and at least we are left with a circa 2million ton chrome producer paying 15%npat dividend.Remenber management have plenty of skin in the game here.GLA

[stemis] 15/2/2024 08:44:20

Investors wonder why companies are reluctant to interact with PI's.

I'm not a great fan of LSE. In my (albeit fairly limited interaction - mainly DX., SQZ and THS) I've found it the source of some absolutely woeful analysis, which is then swallowed wholesale by gullible readers.

[nigelpm] 14/2/2024 20:09:17

Legal team have been notified also. Ouch.

[tigerbythetail] 14/2/2024 18:19:19

I've been reading the posts on LSE again. They are well worth studying carefully.
However you dice and slice it, it seems to me that the very substantial Karo investment has been horrendously misjudged.
I don't believe that a sudden boom in PGM prices will come to the rescue of the project. In particular, I believe that palladium prices will now stay down for years to come. And I don't believe that Tharisa will be able to attract external money to the project either; the economics simply aren't there.
So (IMO) it comes down to this:
a. Tharisa come to their senses, cut their losses, and freeze investment in Karo. (Which possibly leads to it being seized back by the Zimbabwean government, as happened to the project's previous owner).
b. Tharisa throw more and more good money after bad and end up funding the entire project. That would eat up the entire profits from South Africa for several years and depends on chrome prices staying high, which is uncertain.
All in all, it's a terrible position to be in.
In normal circumstances I'd say the CEO should walk the plank for an error of this magnitude, but that's not going to happen here. So most likely Tharisa will just go on stubbornly funding Karo and shareholders will go on suffering.
It's a pity, but IMO that's how it is.

[nigelpm] 08/2/2024 09:57:17

Thanks Tiger - much appreciated.

I'm sure if the outlook changes there will be plenty of time to re-invest - with something like Tharisa the upside isn't really going anywhere and I doubt it would jump on anything other than a bid approach and I'd see that as highly unlikely.

[tigerbythetail] 08/2/2024 09:22:17

I found this by chance on the JLP LSE board. I don't think this interview with the CEO at the mining Indaba been posted here before:

hxxps://youtu.be/qtPxqXQ0MRg?si=xDk-D4kg305jl5T1

I also note that palladium and platinum prices have crossed over this morning in the $880s - palladium reverting to its long term historical norm of being cheaper than platinum.

Anyway, good luck to all here. I hope I was wrong to sell and it works out for you!

[nakedmolerat] 08/2/2024 07:26:31

guy called affran whos' always pumping oilers and metals has chucked in the towel, seems his crew has followed him

[nigelpm] 07/2/2024 20:43:16

My sense also from here, LSE and Twitter is a load of PI's have given up the game at the very bottom of the cycle. May be some downside still but we'll see.

[nigelpm] 07/2/2024 19:07:53

Fwiw. Having spent sometime looking at this earlier I'm in complete agreement with stemis...

[stemis] 07/2/2024 17:42:53

Platinum’s consecutive market deficits could deepen as lower PGM prices increase mine supply risks

https*://platinuminvestment.com/files/855484/WPIC_Platinum_Essentials_December_2023.pdf

(without the *)

[nigelpm] 07/2/2024 16:00:59

Stemis - thanks - ever the logical one.

[stemis] 07/2/2024 15:43:40

A bit more for those who don't follow LSE:-

Because THS own the majority of Karo Holdings (KH), it doesn't much matter what valuation they place on the shares.

Suppose KH was valued at $325m pre fund raise. THS owns 70% so it's stake is worth £227.5m. THS injects £65m for another 5% so KH is now worth $390m. THS now owns 75% so it's stake is worth $292.5m (amazingly $65m more; the amount it injected).

However let's suppose KH was only worth $125m pre fund raise. THS owns 70% so it's stake is worth £87.5m. THS injects £65m for 5% so KH is now worth $190m. THS now owns 75% so it's stake is worth $142.5m ($55m more; but only $10m less than it injected).

[gunner_ni] 07/2/2024 12:23:17

Thanks Tiger

[gunner_ni] 07/2/2024 10:52:59

I am unable to find the LSE board. Could somebody please post a link?

[stemis] 07/2/2024 10:16:51

and then burying that fact from investors deep in the footnotes of the annual report

Actually was mentioned in the CFO's review

[stemis] 07/2/2024 10:07:46

The subscription for shares is effectively part of the capital expenditure in Karo.

If you don't understand my explanation then think of it this way. Suppose you owned 100% of a company with one share which had £1 in it. You decided to subscribe for another share for £1m. So you now still own 100% of the company but with £1,000,001 in it. The second share valued the company at £1m even though it had only £1 in it. Were you ripped off? Of course not, you own all the company!!

[tigerbythetail] 07/2/2024 09:56:39

Hi Stemis!
I don't see things in the way you do.
Any road, you must see that spending large amounts of company money to buy shares in a risky and all-but-worthless enterprise (Karo), and then burying that fact from investors deep in the footnotes of the annual report, is alarming.
How on earth can Tharisa justify putting a $1.4 bn valuation on a half-built mine in Zimbabwe which requires high platinum and palladium prices to even break even and which is smaller than Tharisa mine itself?!? Just compare the two valuations. It's insane.

[tigerbythetail] 07/2/2024 09:24:03

London South East (LSE) - just search "Tharisa share chat" and it will come up.

[stemis] 07/2/2024 09:23:50

Tiger,

I've now had chance to look at the posts on LSE. Although what is said is strictly correct, I think they are getting confused by the accounting.

The gist of the argument, if I'm not mistaken, is that THS have paid $65m for 5% of the shares in Karo Holdings, valuing Karo Holdings at an incredible $1.3bn. Whilst this is true, what they haven't taken account of is that THS didn't buy the shares off the minority holder (Leto settlement) but subscribed for new shares in Karo Holding. The result is that 75% of the $65m still effectively 'belongs' (in the sense of being part of their beneficial holding) to THS. Only 25% i.e. $16m of value has been provided to Leto to reduce their holding from 30% to 25% (so from their point of view, it's valued their holding in Karo Holdings at $320m). Indeed if THS do increase their holding to 80%, that $16m 'effectively' becomes $13m.

Now one can argue that the $16m should be lower, but there may be strategic (or indeed contractual) reasons why they might have agreed that figure (I don't know). However, in the scheme of things, the difference really isn't that material.

[lennonsalive] 07/2/2024 09:19:50

Tiger, what is this other board you speak of?How do you mean the money is being siphoned off?

[tigerbythetail] 07/2/2024 09:17:06

Hi Sotolo!
FWIW, I didn't sell because of the dire state of the PGM market. It will turn back up, sooner or later. As always with commodities, the cure for low prices is low prices. Nor did I sell because I expect the chrome market to crack imminently.
I didn't even sell because the investment into Karo (predicated on a currently unrealistic PGM basket price) is a horrendous mistake - though it clearly is.
I sold because money is being siphoned out of Tharisa, as per the posts on the other board. (Grateful thanks to Mike and Hxol for alerting me to this, which I had previously missed).
Previously, I thought Tharisa was extraordinarily cheap. Even suspiciously so. And I couldn't understand why the BoD didn't simply dump Karo. Now (I think) I understand things a little better, and I don't hold out much hope for this company.
I'd be interested to read a defence of their actions from Tharisa's directors, but unless I've wholly misunderstood the state of affairs, I won't be putting money into this company again.
I'm sorry for once pointing out this company to you. AIM strikes again! IMO, AIM in particular, and perhaps the LSE as a whole, are becoming uninvestable. Stock markets simply don't function without rules and swift and severe punishment for those who bend them out of shape or break them.

[leopoldalcox] 06/2/2024 22:01:35

Interesting reading Tiger. Thank you for flagging. It doesn't read well

[loganair] 06/2/2024 19:45:56

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.

Tharisa share price is down 42.5% from it's 1 year high and 63.7% down from its 3 year high I'm starting to think maybe it's a good time to make an initial small investment.