302 replies to this topic

[SLEEKONE]

Btw i strongly recommend a Buy rating on the stock,its actually among the few stocks that can double or even triple your money in the future.

[SLEEKONE]

Lonmin is a big player in the industry. After the restructuring is complete,this will result in cost cutting to the tune of R1bln thus improving its financial position substantially. Though a rights issue is imminent, i dont think the board would agree to the commencement of the rights issue when the share price is so low. Maybe when it is R6.7, then we should expect an announcement. I think it will be two weeks from now. Though the future may look gloomy for Lonmin, the worst it can achieve after all is said and done is a share price of R15 by April 2016.

[100ways]

Bit of reasoning for  your post above would be greatly appreciated.

Thanks in advance.

Would be interesting to know the reasoning behind this, rights issue will dilute shareholding, metal prices on the low and current climate in the workforce are major factors. I think Lonmin will be at these current prices for quite sometime. Of course we will see the odd spike in SP once in a while. But I believe a LT hold.

[soutie]

In at R6.80. Lonmin to reach R17 in April 2016. Holding on tight to this one

 

Bit of reasoning for  your post above would be greatly appreciated.

Thanks in advance.

[SLEEKONE]

In at R6.80. Lonmin to reach R17 in April 2016. Holding on tight to this one

[Ninja]

On the one side the R3 low could be taken out and this thing falls to zero, bankruptcy and asset sales... On the other side, someone sees the minjng assets worth more than R65 per share, sees long term value and cycle low, backs this horse and suddenly R5 seems like a give away

For now take comfort in the R3 low as support

[Magnet]

Get ready... Maybe a nice dip sub R5 coming up

 

Ninja you seem certain that the rights issue will be successful?  If not this is going all the way to Zero...

[Ninja]

Get ready... Maybe a nice dip sub R5 coming up

[Jakkals]

let us know when its that time...ninja

I agree!

[candle-stick-surfer]

let us know when its that time...ninja

[Ninja]

I had a good serving from R4 to R8.... Will get back in when time is right

[buylow]

This baby is not done yet!  Up 10% so far.

Bdlive has the following to say....

 

LONMIN, the world’s third-largest platinum producer, will raise $400m in a rights issue and put in place an amended debt facility for $370m before the end of the year.

Lonmin has existing debt facilities of $543m, which mature in May and June next year, and the amended debt facilities, which will mature in May 2020, will be conditional on the company raising the $400m in a rights issue.

Credit committee approval is also needed to secure the amended debt facilities.

"The board believes that the proposed rights issue and the amended debt facilities taken together will strengthen the business and provide the group with sufficient resources for working capital and capital expenditure to sustain the business in an ongoing low platinum group metal pricing environment," the company said in a statement on Wednesday.

The terms of the rights issue will be made known and underwritten on November 9. The board wants to conclude the rights issue before the end of the year and will hold a shareholder meeting on November 19 to vote on the proposal.

The Public Investment Corporation, which owned about 7% of Lonmin, had said it would take up its entitlement and contribute to underwriting the rights issue, Lonmin said.

In the year to end-September, Lonmin sold 751,560oz of platinum, which was above its guidance of 730,000oz.

Lonmin would set aside R800m to restructure its business in a process that would affect 6,000 jobs by September next year. So far, 1,550 people had left Lonmin through a voluntary separation process and early retirement.

Lonmin would generate sales of about 700,000oz of platinum in its 2016 financial year, falling to 650,000oz for the following two years as its restructuring, including the closure of high-cost shafts took effect.

 

[soutie]

The bulk of the last rights issue funds went to AMCU's returning strike/work force......They is already potential for AMCU to strike in the gold sector.....A rights issue for wages will be difficult to sell me thinks.....Unless they practically give them away.....Mentioned earlier on this thread is the exodus of Investec & Coronation fund managers.....Trade the swings but this is not one for the long term rather Northam or Amplats IMO.....That's if you must hold Plat stock.

[buylow]

Check out the following 2 articles…. Esp the JP Morgan comment at the end of the first.

 

http://www.bdlive.co...-torpedo-lonmin

 

Rights issue fears torpedo Lonmin

BY ANDRIES MAHLANGU, 20 AUGUST 2015, 07:49

 

LONMIN shares crashed as much as 22% to a record low of R5.31 on Wednesday amid growing talk that the platinum producer may again go cap in hand to shareholders for capital to meet its looming debt obligations.

Lonmin has said it is looking at options for securing long-term capital, raising fears of a deeply discounted rights issue. It has a credit facility of $400m maturing in June next year.

"Cash flow is the concern. They are burning through cash and have debt facilities due soon," MyWealth Investments CEO Devin Schutte said. "If they cannot raise additional debt they might have no choice but to go to equity markets and raise capital at deeply discounted levels."

The third-largest platinum producer is reeling from a metal price slump that has forced it to slash output by 100,000oz, halt five mines and cut 6,000 jobs.

While its peers are also suffering from a platinum price that is below $1,000/oz for the first time since 2009, Lonmin has a weak balance sheet as well.

Palladium and rhodium prices too have fallen amid worries over excess capacity and sluggish demand.

Imara SP Reid analyst Sibonginkosi Nyanga said it would take a while for Lonmin to recover even if platinum group metal prices were to improve because it ha d cut down significantly on capital projects.

Lonmin has lost 82% of its market capitalisation this year‚ making it one of the worst performers on the JSE. The platinum min ing index is off 37% in the same period.

Lonmin closed 19.56% lower at R5.47 on Wednesday, giving it a market cap of R3.19bn.

The company last month maintained its platinum output and sales targets for the financial year to November at 750‚000oz and 730‚000oz, respectively.

It said it would shut its high-cost Hossy and Newman shafts and three contractor-run older mines. It immediately shut its K4 shaft‚ which is in development, as part of the cost savings.

"Any platinum price below $1‚000 is never going to be good for any cost increases‚ including labour cost‚" CEO Ben Magara said on July 27.

JPMorgan said: "We expect low platinum group metals prices to hamper its ability to refinance debt facilities that mature next year and we believe a rights issue is on the cards — Lonmin’s third visit to shareholders in seven years.

 

 

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The following is from Bloomberg...

 

http://www.bloomberg...-platinum-deals

 

 

A flurry of deals in the platinum industry is giving Lonmin Plc confidence that it can complete a share sale to help the world’s No. 3 producer of the metal raise cash, according to two people close to the process.

Lonmin has seen its stock slide 80 percent this year and has been considering various funding options. The company is encouraged by investor optimism after larger rival Impala Platinum Holdings Ltd. completed a $297 million share sale and Sibanye Gold Ltd. bought two mines over the last month, said the people, who asked not to be identified because the plans are private. 

The producer is burning through cash to sustain operations and needs to refinance about $548 million of debt by the middle of next year. The company operates at a loss as prices of platinum, used to clean vehicle emissions and for jewelry, trade near a six-year low.

The shares dropped as much as 13 percent Thursday and traded 0.7 percent lower at 34.50 pence by 9:37 a.m. in London, paring the previous day’s gain of 34 percent. While the stock doubled in the past week as confidence returned to the mining industry, prices are only the highest in a month.

Market Speculation

“We are unable to comment on market speculation, but as we have said previously the company is working very hard on strategic, operational and financial plans which will protect shareholder and stakeholder value and stabilize the environment going forward,” James Clark, a spokesman for the company at Cardew Group in London, said by e-mail in response to questions. “Lonmin will have more to say about this at the appropriate time.”

Lonmin is in talks with key advisers to evaluate its funding options, the two people said. The company is due to announce how it will restructure its balance sheet in November, when it releases annual earnings, according to a statement from July.

The platinum producer has already drawn down a $400 million facility amid talks with bankers to restructure debt, two people familiar with the matter said last month. Lonmin may cut as many as 6,000 jobs and annual output by 100,000 ounces, the company said in July.

 

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Just two articles I found helpful ..... but please be reminded that we all have to do our own homework, make our own decisions and calculate the level of risk we are prepared to take.

 

 

 

 

 

[candle-stick-surfer]

Full year results to be release in the next few weeks... What do you guys think? Any speculations? Please share.

[buylow]

Indeed, I was on the ride too. Still catching my breath! My opinion is that this baby is not done yet, but simply taking a breather. They need cash and so a rights issue might be in the pipeline. Just my guess.

[Ninja]

Yoh... Out of Lonmin at R8.... What a ride!!!

[soutie]

Well done on buying down there I'm still not a buyer....

[Ninja]

The silence is killing me... Now back at R7.00

Edited by Ninja, 07 October 2015 - 12:44 PM.

[SB45]

Its not a punt at this stage in my opinion, too many hanging issues still not resolved for my risk appetite.