The Lemon Fool

Interesting bit starts around 4:30

https://youtu.be/EGRsy9UTeM4

Ta for putting that up. By coincidence, the following article just popped up on Seeking Alpha:

"Is It Time to Buy Platinum?"
https://seekingalpha.com/article/408592 ... y-platinum

And FWIW, here's a quarterly presentation from the World Platinum Investment Council dated May 15.

https://www.platinuminvestment.com/file ... 202017.pdf

The interesting supply/demand stuff starts on page 14.

FredBloggs wrote:The downside, I think, is the rapidity with which the automobile industry is hurtling towards electrification. 10 to 15 years time, the cars parked in your street could be electric just as likely as infernal combustion engine powered. But............. electric propulsion does not require catalytic converters.

Apparently platinum is also used in fuel cells, so the move toward electric vehicles might turn out to be positive for the metal. From the demand drivers section of the World Platinum Investment Council's website:

World Platinum Investment Council wrote:Platinum’s superior catalytic and conductive properties in fuel cells turn hydrogen and air into water producing electricity to power electric cars with zero emissions ... Fuel cell electric vehicles (FCEV) use more than twice the amount of platinum in internal combustion engine vehicles.

The old dog is showing some life - Lonmin rose 14% today.

I have been seriously considering buying into this one, but have yet to pull the trigger. Assuming this is a blip rather than the start of a prolonged breakout, I will probably wait for the technical indicators to (hopefully) return to bargain-basement territory and then assess the prospects.

The chap in the video has 3 rough outcomes. 1. goes bankrupt 2. is taken over around 4-5x inside 2 years 3. 20x 30x 40x

Just eyeballing some pessimistic probablities makes this to me a small lottery ticket to be stashed away.

CommissarJones wrote:The old dog is showing some life - Lonmin rose 14% today.

I have been seriously considering buying into this one, but have yet to pull the trigger. Assuming this is a blip rather than the start of a prolonged breakout, I will probably wait for the technical indicators to (hopefully) return to bargain-basement territory and then assess the prospects.

A nice blip, I am up 32%.

I should really stop looking into this but am up 42 per cent. What a blip!

JMN2 wrote:
I should really stop looking into this but am up 42 per cent.

What a blip!

If I've learnt one single investment-lesson personally, it's that when I start wanting to tell people how well one of my stocks is doing, historically it has proven to have been almost the exact point where I should also have started to sell at least some of my holding in that particular stock....

Well done though! :O)

Itsallaguess

Here's a recent note from ETF Securities on platinum and palladium, for anyone who might be interested.

LMI was looking a bit soft but is awake today...up 15.2%. It's a lottery ticket, most I can lose is about my annual council tax bill (but I could cover that from my bitcoin profits!).

JMN2 wrote:LMI was looking a bit soft but is awake today...up 15.2%.

Something to do with this, I suspect.

https://www.investegate.co.uk/lonmin-pl ... 00038780S/

I bought a similar tiny amount for my SIPP too because it seems that there is a floor to the fluctuations, and should that floor break then it won't do much damage.

Lonmin is now back down to 62.25 pence, below the lowest close in June (63p), for anyone who is feeling lucky. In the interim, the stock closed as high as 106p (1 November).

CommissarJones wrote:Lonmin is now back down to 62.25 pence, below the lowest close in June (63p), for anyone who is feeling lucky. In the interim, the stock closed as high as 106p (1 November).

Apparently some strike problems in SA.

Agreed takeover bid for Lonmin from mining company Sibanye-Stillwater, which originated with a spinoff from Gold Fields Ltd. in 2013.

https://www.investegate.co.uk/lonmin-pl ... 00063332Z/

Sibanye-Stillwater website:

https://www.sibanyestillwater.com/

CommissarJones wrote:Agreed takeover bid for Lonmin from mining company Sibanye-Stillwater, which originated with a spinoff from Gold Fields Ltd. in 2013.

https://www.investegate.co.uk/lonmin-pl ... 00063332Z/

Sibanye-Stillwater website:

https://www.sibanyestillwater.com/

Hmm, wouldn't be too happy with a takeover at the proposed price, especially if the new shares were inelligible for my ISAs. Hope some bigger shareholders push for a better deal.


GS

Disappointing indeed. I am currently flattish across my ISA and SIPP. Looks like they just wanted to give up and are fed up with it. Not even a cash offer.

Nice Bloomberg story here from last month that IMV does an effective job of shedding some light on why Lonmin might indeed have been anxious to sell out when the opportunity presented itself.

Bloomberg wrote:Every day, Lonmin Plc sends thousands of miners hundreds of meters below ground, where they use drills, diggers and explosives to extract about 40,000 metric tons of rock laden with precious metals.

The ore is milled, crushed, concentrated, smelted and refined in a month-long process that eventually yields about 4,100 ounces of platinum-group metals each day. Yet for all its trouble, Lonmin’s revenue in the most recent quarter was barely $3 an ounce higher than its costs.

(My bolding.)

If this deal was unimpressive to begin with, it has really gone into the toilet in the last week.

Sibanye's annual results on Feb. 22 were poorly received, to say the least - the stock, the "currency" for this transaction, fell 16% that day and is now down 27% from the price before the takeover was announced (close of ZAR11.68 today versus ZAR16.11 on Dec. 13). That values Lonmin shares at about 62.5 pence each, against 100p at the time of the announcement, using the same GBP/ZAR exchange rate. The rand has strengthened against sterling since then, so the shares are worth 69p each at the current rate, which is slightly less gruesome.

The biggest Lonmin shareholder (with about 29%) is Public Investment Corp., which is owned by the South African government. However, PIC is also the second-largest Sibanye stockholder (owning about 11%), so it's not obvious to me that they have any particular motivation to push for a better deal here. One wonders what the likes of Majedie, Schroders, Legal & General and Ruffer (all on the Lonmin register) make of the situation.

Liberum speculated last week that Sibanye's takeover of Lonmin might fall through because of the effect on Lonmin's finances of low platinum prices and the stronger rand. But in yesterday's interim results, Lonmin said it still expects the deal to complete in the second half of 2018. And now the UK competition regulator has decided to stick its oar into the situation as well.

The price action of the two stocks is not pretty. Sibanye has dropped almost 20% in May, and Lonmin is down about 15%.