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anonymousPlatinum Group Metals Ltd.
Progress continues to be made; mining a bit
behind but concentrator outperforming
PTM hosted a site visit to the Maseve platinum mine located on the
Western Limb of the Bushveld in South Africa. While mining is running
around one to two months behind plan, an encouraging ramp up
performance from the plant has seen the first concentrate trucked to
Anglo American Platinum. We expect the mine to continue to encounter
teething problems as it ramps up to full capacity of 250koz (4E), but take
encouraging signs from progress made to date.
Mining running a touch behind: Management noted that in its ramp
up of mining Maseve, it has faced challenges in the dip of the reef and
with minor faults which require some additional development. Mining
will use a variety of methods, including longhole stoping, conventional,
hybrid and bord and pillar, and is currently around one to two months
behind plan. Focus is on reaching Block 11, which is expected to use a bord
and pillar method. Management appear confident they can make up lost
time with production flexibility through a 140koz stockpile of lower grade
ore. Current production guidance is 116koz (4E) for 2016 and any further
challenges to mining progress could place this target under pressure.
Concentrator running well: The ramp up of the concentrator has
progressed well, with recent mine shut downs (in particular Eland)
enabling PTM to secure experienced staff for the ramp up phase. The
concentrator is currently running at ~125ktpm, ahead of its 100ktpm
nameplate, and management believe the concentrator’s outperformance
Opex in line: Despite capex coming in above plan due to additional
expenditure on the tailings facility liner, procurement freeze and
escalation, opex is in line or below forecasts for the operational stage.
However, as we note above, the delays in production of concentrate have
resulted in a delay to revenues and any further slippages could be a
Talking up Waterberg: Drilling continues on Waterberg in the Northern
Limb with encouraging results the Super T and Super F zones, which
are over 10m thick at grades of ~6g/t and ~3g/t respectively, with
opportunities to improve early cash flow generation. Worley Parsons is
evaluating Sub-Level Open Stoping for the F Zone and Step Room and Pillar
for the T Zone. Next steps include a resource update in March, a PFS by July
and a Mining Right application in August. Followed by the commencement
of a DFS in September 2016 as well as power/water studies. $PTM update $RBC
@Vaughan@90bigpicture it would seem to me that many of the more traditional investment methodologies and tools are not made for the Juniors. Example: averaging down. When you take a hit on your investment in $RBC or $SU, bringing the average cost down would normally be a prudent decision, but these juniors can go from Hero to Zero - and vice versa - quickly, making averaging down simply throwing good money after bad.
@Vaughan@kjm, that is the hope but not always the case. Sometimes these options expire and without any warning. Futhermore, observable trends would require sufficient historic data to deduce creat a trend to be observed. When we're dealing with a Large-Cap, such as a $G or $RBC, one can conceive that there exist years if not decades of data. But when the likes of $LIX can go from a sleepy shell trading at .10c - and I use the word trading carefully here - to +$2.00, trends are none existant. Similarly, for those in the community holding $NRN, it is not thanks to vast amounts of observable data.
@Goldfinger$RBC sees Trump as a $gold positive. I'm not totally clear on that, although, I do believe he would be a long term gold positive. Short term I could see a shakeout to the downside in the event of a Trump win.
@GoldfingerVia $RBC on $lithium:
"We believe lithium is still in the early innings based on: 1) 9-10% demand CAGR expectations over the next decade; 2) finite supply;
3) limited commercial producers and barriers to entry; and 4) lithium makes up ~1% of total Electric Vehicle (EV) cost structure."
@Goldfinger$RBC on $lithium: "The majority of growth should be driven
by demand for lithium-ion batteries, most notably Electric Vehicles (EVs), which we anticipate to grow at a 20-30% CAGR over the next 10 years."
@GoldfingerFollowing an earnings report which disappointed the street $RBC hiked its $TSLA price target from US$245 to US$314. Primary basis for target increase is increased confidence in Model 3 ramp up to limited production during the summer and better gross margin visibility. Model 3 production will ramp to >5,000/week "at some point" in 4Q17 and 10,000/week "at some point" in 2018. $lithium
@Goldfinger$RBC on $uranium:
"In the term market, two transactions involving deliveries over the 2020-2027 period are reported this
A non-US utility has issued an RFP for 300 tU as UF6 for delivery in January 2018; offers are due to the
utility on April 11.
A US utility continues to evaluate offers for delivery of approximately 1,800 tU of conversion contained
in UF6 over the 2023-2030 time frame, although the utility has indicated it could accept up to 3,100 tU
of conversion over the period.
A non-US utility continues to evaluate offers for up to 3,000 tU of conversion for delivery in the
@Goldfinger$RBC on $TSLA valuation model (RBC has $314 price target on TSLA): "We assume a 15% WACC and an 8x exit EBITDA multiple for our DCF valuation. Our valuation is sensitive to our assumptions. Every 100bps to our discount rate assumption and every turn on the terminal EBITDA multiple is worth about $20/share to our valuation."
RBC gets to $7.575 billion in free cash flow for TSLA by 2025 based upon ~1.5 million vehicle deliveries that year:
http://cdn.ceo.ca/1ccjtcr-TSLA_DCF.png+ And RBC admits "Our model is a work in progress...."
@Goldfinger$RBC note on $ABX: "We believe the market is pricing in expectations that Barrick pursues internal development projects that meet its internal return hurdles, rather than seek external M&A opportunities to acquire producing mines or reserves." $gold
@Goldfinger$RBC on $ABX valuation:
"Our 1.2x NAV is at a 7% discount rate and is equivalent to ~1.0x
NAV using a 5% discount rate. Our 18.0x EV/3-year average
forward Adj.CF multiple is equivalent to an 11x forward P/CF
Our upside valuation of $32.00 is based on our upside flat
gold price scenario of $1,500/oz, all other operating/financial
assumptions and valuation multiples held constant.
Our downside valuation of $14.00 is based on our downside
flat gold price scenario of $1,100/oz, all other operating/
financial assumptions and valuation multiples held constant."
@Goldfinger$RBC on $NG: Progressing toward receipt of the final EIS for the Donlin Gold project in Alaska (50% NG/50% $ABX) in early 2018. NG has responded to more than 100 requests for additional information and The US Army Corps of Engineers expects the final EIS to be published in early 2018, consistent with the commentary previously provided in NovaGold's year-end 2016 report. NovaGold continues to advance the processes for other key permits and approvals. Company ended Q1 with $98 million in cash and short term deposits, expects $23 million cash burn during 2017. $gold
@Goldfinger"The key bright spot in the complex continues to be US crude exports. Shipments have averaged some 350 kb/d higher over the past three months compared to the same period last year. Since December, almost 17 mb have been removed from the US storage system in the form of exports. Put another way, exports have almost completely offset the incremental stock builds attributed to the increase in imports." $RBC on $oil
@Goldfinger$RBC on $DPM: "We view Q1/17 production results as positive, with production at Chelopech of 46.4Koz Au and 8.2MMlbs Cu coming in well ahead of our estimate of 39Koz Au and 7.7MMlbs Cu. Near term production is expected to be higher than expected as a result of mining sequence. Concentrate production at the Tsumeb smelter of 42kt was above our estimate of 38kt and is expected to rise going forward following a maintenance shutdown in the quarter. Construction at Krumovgrad is also on track, with first concrete scheduled to be poured in April."
@Goldfinger$RBC on $BTO:
"We view the strong production results as positive for the shares. B2Gold reported consolidated gold production for Q1 of 132,736 oz, above our estimate of 129,018 oz. Consolidated gold revenue in the period was $146.3 million on sales of 119,937 oz at an average price of $1,219/oz. B2Gold reported that the Fekola Project remains 3 months ahead of schedule and on budget with an expected start date of October 1, 2017.
Strong Q1 production results were due to higher than expected production from the Company’s Masbate, Otijikoto and La Libertad mines. B2Gold reiterated its production guidance of 545,000-595,00 oz for the year, including pre-commercial production from Fekola of between 45,000-55,000 oz."
@Goldfinger$RBC on Freeport strike situation:
1. The strike is not expected to have a significant impact on near-term $copper/ $gold production and our understanding is that Grasberg has not been completely shut down.
2. We do not expect an immediate impact on Q2/17 sales as FCX is shipping Cu-Au concentrate inventories that were built up in Q1/17. $FCX has also been ramping up Q2/17 production well before the strike started, after receipt of their 6-month export permit.
3. FCX is currently in talks with the union to get employees to return to work. We note that only 12,000 workers out of a total of 30,000 workers are unionized, with the balance employed by various contractors.
@Goldfinger$RBC with a note this morning making the case for a higher political risk premium in crude $oil due to $Saudi and $Iran tensions:
"The rise of MBS will also likely mean even more hawkish foreign policy moves from Saudi Arabia and more intensified efforts to confront Iran. Under MBS’s watch the Kingdom has launched a costly war in Yemen and spearheaded a surprise blockade of fellow GCC member Qatar. The key question is what comes next in this quest to counter Iranian influence? Is the Qatar blockade simply the opening act in a broader anti-Iranian offensive? Having President Trump in the White House probably means that MBS will encounter minimal push-back from Washington and a far freer hand to police his neighborhood. Hence we contend that region could witness more near-term volatility and heightened risk of military confrontation. The political risk premium may therefore be set to stage a comeback."