The LONMIN share price thread

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Toothless

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An important read on Lonmin:

Why Shares Should Keep On Collapsing At Lonmin Plc & Jubilee Platinum PLC

Shares in platinum producer Lonmin (LSE: LMI) have endured further turmoil during the course of midweek trading. The South Africa-focussed digger erased recent gains with a 6% decline on Wednesday, and a further 12% decline today has pushed values to fresh record lows around 1.1p.

Lonmin's decline has been breathtaking -- the company's shares were trading above £19.50 five years ago, and were still trading as high as 175p in January. On top of this, a humiliating $407m rights issue last month, a move designed just to keep the lights on at the embattled firm, added an unwanted cherry on the cake.

Stock price performance over at Jubilee Platinum (LSE: JLP) has been more promising by comparison, the company spiking to multi-year peaks during the summer above 4.6p. The selling of assets to fund Jubilee's revolutionary 'surface processing projects' was responsible for sending share prices through the roof.

Platinum keeps on tanking

Still, giddy investor appetite at Jubilee has settled back since then as platinum prices have resumed their downtrend. Following a solid break back above $1,000 per ounce in late summer, prices have collapsed once again, and the metal struck seven-year troughs below $825 just today.

Platinum has conceded a third of its value since the start of the year, and plenty of problems persist that could send prices still lower.
The metal's main industrial usage is in the production of autocatalysts, particularly for those deployed in diesel vehicles. But thanks to the ongoing Volkswagen emissions scandal, regulators are re-examining the carbon footprint of diesel technology, a situation that could have massive repercussions for platinum demand.

Moreover, the possibility of slowing Chinese car and jewellery demand could throw another spanner in the works. Auto sales in the country flipped 11.3% higher in October, to 1.85m vehicles, as tax cuts on small vehicles kicked in. But these efforts could have little long-term value on aggregate platinum demand should Chinese macroeconomic cooling intensify.

Indeed, the boffins over at Morgan Stanley expect things to get worse before they get better -- an average price of $1,079 per ounce for 2015 is anticipated to fall to $1,032 next year, a terrifying omen for both Lonmin and Jubilee.

Lonmin's production issues set to reign

In response to these worrying demand factors, Lonmin elected back in August to shutter its Hossy and Newman shafts at its Marikana complex, a decision that will remove 100,000 ounces of production by 2017.

While a positive step in addressing the market imbalance, the prospect of falling volumes puts even more burden on Lonmin's top-line prospects as platinum prices steadily erode.

And in spite of recent capex reduction and cost-cutting schemes, the financial considerations of mining in South Africa is likely to keep the pressure on Lonmin's balance sheet as electricity, labour and general operational costs canter higher. Against this backcloth I believe the prospect of further capital raising cannot be ruled out.

So if you are looking for stocks with better investment prospects than Lonmin or Jubilee Platinum, I strongly urge you to check out this totally exclusive report that reveals the essential steps you need to take to become a stock market millionaire.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
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https://uk.finance.yahoo.com/news/why-shares-keep-collapsing-lonmin-140717560.html
 
T

Toothless

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Wilma

If you buy now, today:

R100k @23c = 434 782 shares.

After consolidation you will have 4347 shares, which is expected to be valued at R21 a share.

Your R100k will be worth R91 287

Now you need to pray Lonmin turns around, because you are already almost 10k down in value. Because, if they don't and their shares fall down to a more realistic R14 a share, you will be out of a s**t load of money - not even to mention the fact that Lonmin still stands a huge chance to fail too. Then you are out of 100k.
 
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SauRoNZA

SauRoNZA

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Toothless said:
Wilma

If you buy now, today:

R100k @23c = 434 782 shares.

After consolidation you will have 4347 shares, which is expected to be valued at R21 a share.

Your R100k will be worth R91 287

Now you need to pray Lonmin turns around, because you are already almost 10k down in value. Because, if they don't and their shares fall down to a more realistic R14 a share, you will be out of a s**t load of money - not even to mention the fact that Lonmin still stands a huge chance to fail too. Then you are out of 100k.
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At the same time though having a 100k in the mix also means a lot more money to be made off a smaller movement, while the rest of us R1k'ers need like a massive recovery to really see a profit.

Personally my plan is to sell half my shares if it reaches a point where I get my money back. Then I'll leave the rest in there for the 3+ years longer term.
 
akescpt

akescpt

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Toothless said:
No, I took my own gamble too late, but I know a few people who did, not here on MyBB, but outside. I am selling off at a 1c loss to mitigate my own losses.
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so you could have made almost 5 times what you would have made had you sold. you must be a bit pissed and bitter about that.
 
akescpt

akescpt

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WilmaG said:
I didn't know one could see volumes traded.
Does this show how much shares were bought for that day?
Or sold, or bought and sold?
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its seems that you need to get some more advice around this purchase. or you could just give me the money since you seem intent on pissing it down the drain.
 
T

Toothless

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akescpt said:
so you could have made almost 5 times what you would have made had you sold. you must be a bit pissed and bitter about that.
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Not really. Initially I did not have the stomach for the gamble. I spent my money elsewhere instead.
 
Thor

Thor

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ToxicBunny said:
No, you are taking a gamble... not educated if you think the level of their reserves is something to pay attention to.
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If the platinum price goes up which it will in 2016 and in 2018 it will be right up there and then lonmin will be very very very rich since the reserves are gained at a very low price currently.


Platinum prices will average $1 500/oz in 2016
http://www.miningweekly.com/article/platinum-prices-to-average-1-500oz-in-2016-natixis-2015-04-14

http://www.recyclinginternational.c...bal/platinum-market-expected-be-balanced-2016
 
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