SLV - Sylvania Resources - Platinum Group Metal producer

[macduffy]

I've been having a look at PGM companies.

Prices of these metals - platinum, palladium and rhodium - took hefty hits when the world economy tanked and although they have recovered steadily since, havn't come anywhere near their previous levels. Not surprising really given that a major chunk of their output ends up in auto calalytic converters. Now the internal combustion engine may have a doubtful long term future but in the short/medium term new emission control regulations are being mandated for the big new markets in China, India and Asia generally so a steady increase in the use of these metals looks likely.

SLV is a mid tier, South African producer of these metals, mostly from the tailings of chrome miners. They have three producing plants with two more under construction/commissioning. They also have plans for "near-surface mining" of their own tenements, most of which they acquired last year in the takeover of two small Australian companies. SLV itself is an Aussie company with listings on ASX and AIM. Exchange rates are a major issue given that the company operates in SA with expenses obviously in SA rand, sells its output in USD and accounts in AUD.

SP has been on an uptrend lately, reflecting firmer prices/outlook for PGM producers. I bought a few recently and may be tempted further.

Please DYOR. Does anyone else have a view or able to add/expand on my still sketchy knowledge of this company/sector?

[shasta]

I've been having a look at PGM companies.

Prices of these metals - platinum, palladium and rhodium - took hefty hits when the world economy tanked and although they have recovered steadily since, havn't come anywhere near their previous levels. Not surprising really given that a major chunk of their output ends up in auto calalytic converters. Now the internal combustion engine may have a doubtful long term future but in the short/medium term new emission control regulations are being mandated for the big new markets in China, India and Asia generally so a steady increase in the use of these metals looks likely.

SLV is a mid tier, South African producer of these metals, mostly from the tailings of chrome miners. They have three producing plants with two more under construction/commissioning. They also have plans for "near-surface mining" of their own tenements, most of which they acquired last year in the takeover of two small Australian companies. SLV itself is an Aussie company with listings on ASX and AIM. Exchange rates are a major issue given that the company operates in SA with expenses obviously in SA rand, sells its output in USD and accounts in AUD.

SP has been on an uptrend lately, reflecting firmer prices/outlook for PGM producers. I bought a few recently and may be tempted further.

Please DYOR. Does anyone else have a view or able to add/expand on my still sketchy knowledge of this company/sector?

Macduffy

Have a look at PLA & PGM, & to a lesser extent GBE & RDR (for PGM's & Rare Earths), you may be able to compare grades etc

[macduffy]

Macduffy

Have a look at PLA & PGM, & to a lesser extent GBE & RDR (for PGM's & Rare Earths), you may be able to compare grades etc

Thanks, shasta.

I don't know that SLV, PLA and PGM are directly comparable although reading about the three certainly adds to knowledge of the sector!

SLV is primarily a pgm producer, mainly from chrome mine tailings of which it appears to have a good contracted supply. Of course, any reduction in demand for chrome can be expected to have a resultant impact on the supply of material for SLV. The SLV "own" mining operation is further in the future.

PLA on the other hand is an emerging "mining" pgm producer.

PGM is still at the exploration/development stage. Their major project in Greenland isn't expected to reach Feasibility stage until 2011/12 and is primarily a gold project. Their Munni Munni pmg project may get the go ahead rather earlier but on a somewhat reduced scale.

All good grist for the mill, so to speak!

;)

Meanwhile, a nice rise in the SLV SP today.

[macduffy]

Here's Ross Norman's price predictions for pgm metals in 2010.

Oh, and he likes prospects for gold and silver too!

;)

http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=95532&sn=Detail

[macduffy]

Here's why I like platinum/palladium producers like SLV at present!

http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=95665&sn=Detail

;)

[Dr_Who]

Good work mate.

More reading for me tonight. so many companies to read, so little time.

[macduffy]

Keep reading, doc!

Here's a bit on the platinum group metals (PGM's).

:)

http://www.dailymarkets.com/stocks/2010/01/10/the-ultimate-guide-to-pplt-platinum-etf/

[macduffy]

Interesting interview here with Terry McConnachie, MD of SLV. About 7 minutes.

He describes the company's operations. Makes the point that SLV is really a low cost rhodium producer with by-products of platinum and palladium.

http://www.finnewsnetwork.com/archives/finance_news_network13121.html

[macduffy]

I must admit to having been a bit disappointed by SLV's December quarterly, announced yesterday.

Despite a 22% increase in production and better pgm prices - net revenue expressed in rand increased 60% - net operating cash flow excluding development costs barely managed to break even for the quarter. From receipts of around AUD6m, production costs of $2.9m and admin costs of $3.3mwere deducted. No explanation of why admin costs were so high but it appears that the previous quarter's were of a similar magnitude.

I still like the pgm story but may have to re-think whether SLV is the way to get exposure to these metals.

[macduffy]

OK, it's just a rumour from the Daily Mail - see last para.

http://www.dailymail.co.uk/money/article-1274091/MARKET-REPORT-Rockhoppers-election-day-hit.html#ixzz0nErXxDfr

I became disillusioned with SLV a couple of months ago and sold.