Excellent article. Agree. Very bullish on the commodity space with the greatest upside in the platinum group metals. The market cap of all platinum produced in a year along with recycling, only about 7 1/2 million ounces, is just $7.5 billion US. For palladium let’s call it 8,000,000 ounces of Supply with recycling and a market cap under $9 billion. The platinum group metals are not only industrial and precious but they are strategic. As you point out in your article, Supply is challenged and there are insignificant inventories other than perhaps what China has accumulated and what is held by Russia although the best thinking is Russia has significantly reduced its platinum group metal inventory . I fully agree with the generation mining analysis. The stream financing from Wheaton precious metals is very significant since Randy, Smallwood, CEO of WPM are the premier mine financing company that do intense, intense due diligence. I believe they have less than 30 projects that they currently are streaming, and it is a great testament to generation. Further, jamie, levy, CEO of generation is absolutely first class and of the highest integrity as is the entire team. at the end of the day whether generation proves to be a palladium project or a copper project is not yet clear but the upside is very significant. Thanks for the article.
Thank you for the comment FW Levin! I didn´t know WPM is so selective when purchasing royalty and streaming rights, I will take that into account too going forward.
Great article and very little interest in PGMs gerallaly. Have you not looked into Tharisa THS.lse? They are based in South Africa but have a new Karo mine due to come online in Zimbabwe. Karo capex has been delayed due to the current low prices for PGMs, although majority has been invested now. current market cap of £226m and PE of 3.
Thanks! Yeah I know of the company, unfortunately I did not at the time of the writing pf this report. I don’t want to be invested in South Africa nor Zimbabwe
Hi Alberto, great article. Thought I'd draw your attention to Southern Palladium (SPD.ASX, ADL.JSE). SPD have a shallow, high grade, large PGM project on the Eastern Limb of the Bushveld Complex in South Africa adjoining Modikwa. Their Bengwenyama PGM project has a JORC 2012 resource of 35.3Moz PGM, including 18.5Moz grading 9.8 g/t PGM (7E) in the UG2 reef, of which 2.3Moz @ 10g/t PGM (7E) is in the Measured category. A Scoping Study has been released, with a PFS due later this year. I think you'll find the metrics stack up favourably against the peers you have listed.
Kingsrose Mining ASX listed actually have the highest grade palladium dominant rich 6E to 8% PD with proven historical albeit pre Natura 2000 permitting requirements. If they can achieve those permits this year with no NGO pushback I'd be watching that company like a hawk. Oh and great article sir well done!!
Thank you! I want to do an update this summer on PGMs. It will probably be about PGM developers with no economic resource yet, so Kingrose will make the list
This was a surprise to me but the company Kingsrose Mining just received permits to drill Pennikat in Finland earlier than anticipated. Still a chance appeals in an appeals window but lessened by the quality and stewardship of KRMs permitting applications and responsible exploration throughout the permitting process. You should look into the historic drilling and results they already have.
Muy top Alberto. Enhorabuena y gracias por el trabajo. He visto a Rick Rule comentando que el prefiere platino a paladio por el hecho de ser mas barato. En principio estas mineras que comentas como Generation Minig o Sylvania obtienen los dos metales no? No deberia afectarnos si uno de los dos metales es mas usado que el otro en esta tesis
How do you think about the South African risk? How do the miners manage the risk of power disruptions and crime at mine sites? What is the worst case scenario from a jurisdiction perspective?
Thank you Whirly. I guess worst case scenario would be a civil war. Miners like SBSW I believe have a hired mercenary group that protects its mines. Power disruptions are almost impossible to avoid. As you can see in the link below SA relies mostly on coal which is controlled by the state. I was thinking of buying a stake in
Anglo American Platinum Ltd but I think buying a bunch of Canadian and Australian PGM developers is much wiser. Hope it helps.
Exactly what there option was to buy it at the time was basically a call option. I was shocked, disappointed when they didn’t exercise it. But that’s the junior mining space need thick skin as capital deployment decisions by most management groups buck traditional financial thinking, I.e., to actually make money.
Good job. I was heavy in the weeds on this name 2020-22, Palladium >$2500 and the project looked like a no brainer. Had a significant exposure of my tradeable capifal into at much higher price than today's ~$60B. What struck me at the time and still today is why didn't Sibanye exercise their option to buy it? There is much more of the property unexplored and much more copper potential as well. BUT when market doesn't care after all this time what is a catalyst to move this? The Jr mining industry is tough even when you get a good project with good jurisdiction and support market still don't care. Value gets trapped and then fades. Maybe someone buys them down the road and they build it as such longer term shareholders won't see any big pay day due to the cap ex requirements imo. Good project for 🇨🇦 and the world. GLTA I will watch closely with small exposure.
Unfortunately, Sibanye has been busy investing in nickel and lithium assets, something I don’t yet understand. Their Lonmin acquisition was brilliant, right at the start of the previous bull market. Therefore, I can’t comprehend why they aren’t deploying capital into PGM development assets, especially if those are outside South Africa. My guess is that their shareholders are worried about the future of PGMs and are enforcing management into buying "battery metals". Time will tell, but I think big PGM miners are playing this cycle badly. They ought to be closing producing mines and purchasing good PGM projects.
Excellent article. Agree. Very bullish on the commodity space with the greatest upside in the platinum group metals. The market cap of all platinum produced in a year along with recycling, only about 7 1/2 million ounces, is just $7.5 billion US. For palladium let’s call it 8,000,000 ounces of Supply with recycling and a market cap under $9 billion. The platinum group metals are not only industrial and precious but they are strategic. As you point out in your article, Supply is challenged and there are insignificant inventories other than perhaps what China has accumulated and what is held by Russia although the best thinking is Russia has significantly reduced its platinum group metal inventory . I fully agree with the generation mining analysis. The stream financing from Wheaton precious metals is very significant since Randy, Smallwood, CEO of WPM are the premier mine financing company that do intense, intense due diligence. I believe they have less than 30 projects that they currently are streaming, and it is a great testament to generation. Further, jamie, levy, CEO of generation is absolutely first class and of the highest integrity as is the entire team. at the end of the day whether generation proves to be a palladium project or a copper project is not yet clear but the upside is very significant. Thanks for the article.
Thank you for the question FlowState Investing. Platreef will bring 100k oz of PGMs per year for the first 5 years, and then 500k oz per year thereafter. This is nowhere near enough metal to solve the 1M oz deficit per year in the PGM market. Therefore, to answer your question, the market will not struggle to absorb the new supply. Would you like a more elaborate answer? I could make a Twitter post with graphs to show this. Thank you for the support.
IVN IP's are not very clear. Ive done some more digging and see that Phase 1 comes online this year with 113k oz 3PE+Au and phase two will ramp up to circa 590k oz PGMs. This is the figure I thought was coming online this year but it looks to be in 2027.
Of those numbers you mention, 100Koz will be PGMs and 500koz PGMs, the rest of ounces will be gold as Ivanhoe points in its website. Bear in mind that massive mines like Impala´s Rustenburg and Canada operations will close in between 2029 and 2035, that is 1.5Moz getting off the market per year. Deficits will take decades to solve. Hope it helps
Im pretty sure Kuppy knew it before I did. I will cover AMRK in the next report. Its taking me some time due to the sheer size of the gold market. Thank you for the support
Thank you, and I look forward to reading your report on AMRK. I have not taken a position yet, and am *hoping* for a pullback in the gold price before doing so; but it's a funny old market, gold, shrouded in secrecy . . .
It will also include small gold producers and gold developers, hence the time its taking, i´ve analyzed already 100s of companies and I have a lot more to go
Very interesting. Don't you think that sylvania can be a bet, it would be profitable and with less risk, because there are not the usual problems of miners
Excellent article. Agree. Very bullish on the commodity space with the greatest upside in the platinum group metals. The market cap of all platinum produced in a year along with recycling, only about 7 1/2 million ounces, is just $7.5 billion US. For palladium let’s call it 8,000,000 ounces of Supply with recycling and a market cap under $9 billion. The platinum group metals are not only industrial and precious but they are strategic. As you point out in your article, Supply is challenged and there are insignificant inventories other than perhaps what China has accumulated and what is held by Russia although the best thinking is Russia has significantly reduced its platinum group metal inventory . I fully agree with the generation mining analysis. The stream financing from Wheaton precious metals is very significant since Randy, Smallwood, CEO of WPM are the premier mine financing company that do intense, intense due diligence. I believe they have less than 30 projects that they currently are streaming, and it is a great testament to generation. Further, jamie, levy, CEO of generation is absolutely first class and of the highest integrity as is the entire team. at the end of the day whether generation proves to be a palladium project or a copper project is not yet clear but the upside is very significant. Thanks for the article.
Thank you for the comment FW Levin! I didn´t know WPM is so selective when purchasing royalty and streaming rights, I will take that into account too going forward.
Great article and very little interest in PGMs gerallaly. Have you not looked into Tharisa THS.lse? They are based in South Africa but have a new Karo mine due to come online in Zimbabwe. Karo capex has been delayed due to the current low prices for PGMs, although majority has been invested now. current market cap of £226m and PE of 3.
Thanks! Yeah I know of the company, unfortunately I did not at the time of the writing pf this report. I don’t want to be invested in South Africa nor Zimbabwe
Understood but then most of the companies listed here that is where their mines are. SSBW have mines outside but their AISC are higher
Hi Alberto, great article. Thought I'd draw your attention to Southern Palladium (SPD.ASX, ADL.JSE). SPD have a shallow, high grade, large PGM project on the Eastern Limb of the Bushveld Complex in South Africa adjoining Modikwa. Their Bengwenyama PGM project has a JORC 2012 resource of 35.3Moz PGM, including 18.5Moz grading 9.8 g/t PGM (7E) in the UG2 reef, of which 2.3Moz @ 10g/t PGM (7E) is in the Measured category. A Scoping Study has been released, with a PFS due later this year. I think you'll find the metrics stack up favourably against the peers you have listed.
Thank you Kurt! I will check them out
Hello Alberto, can't see any news about FME. Jumped 42% on the ASX. Did they found something?
Nothing really. Its a small firm, so if anyone buys in its gonna make the stock rise. Link for more information below:
https://www.investi.com.au/api/announcements/fme/65742d3c-ee3.pdf
Thank you, yes, I saw it today
Kingsrose Mining ASX listed actually have the highest grade palladium dominant rich 6E to 8% PD with proven historical albeit pre Natura 2000 permitting requirements. If they can achieve those permits this year with no NGO pushback I'd be watching that company like a hawk. Oh and great article sir well done!!
Thank you! I want to do an update this summer on PGMs. It will probably be about PGM developers with no economic resource yet, so Kingrose will make the list
This was a surprise to me but the company Kingsrose Mining just received permits to drill Pennikat in Finland earlier than anticipated. Still a chance appeals in an appeals window but lessened by the quality and stewardship of KRMs permitting applications and responsible exploration throughout the permitting process. You should look into the historic drilling and results they already have.
Muy top Alberto. Enhorabuena y gracias por el trabajo. He visto a Rick Rule comentando que el prefiere platino a paladio por el hecho de ser mas barato. En principio estas mineras que comentas como Generation Minig o Sylvania obtienen los dos metales no? No deberia afectarnos si uno de los dos metales es mas usado que el otro en esta tesis
Hola! Generation Mining es más de paladio que de platino
Excellent, thank you.
How do you think about the South African risk? How do the miners manage the risk of power disruptions and crime at mine sites? What is the worst case scenario from a jurisdiction perspective?
Thank you Whirly. I guess worst case scenario would be a civil war. Miners like SBSW I believe have a hired mercenary group that protects its mines. Power disruptions are almost impossible to avoid. As you can see in the link below SA relies mostly on coal which is controlled by the state. I was thinking of buying a stake in
Anglo American Platinum Ltd but I think buying a bunch of Canadian and Australian PGM developers is much wiser. Hope it helps.
https://www.statista.com/statistics/1237610/south-africa-distribution-of-electricity-production-by-source/
Superb report, for which, many thanks indeed.
Thank you Hariod
Exactly what there option was to buy it at the time was basically a call option. I was shocked, disappointed when they didn’t exercise it. But that’s the junior mining space need thick skin as capital deployment decisions by most management groups buck traditional financial thinking, I.e., to actually make money.
Good job. I was heavy in the weeds on this name 2020-22, Palladium >$2500 and the project looked like a no brainer. Had a significant exposure of my tradeable capifal into at much higher price than today's ~$60B. What struck me at the time and still today is why didn't Sibanye exercise their option to buy it? There is much more of the property unexplored and much more copper potential as well. BUT when market doesn't care after all this time what is a catalyst to move this? The Jr mining industry is tough even when you get a good project with good jurisdiction and support market still don't care. Value gets trapped and then fades. Maybe someone buys them down the road and they build it as such longer term shareholders won't see any big pay day due to the cap ex requirements imo. Good project for 🇨🇦 and the world. GLTA I will watch closely with small exposure.
Unfortunately, Sibanye has been busy investing in nickel and lithium assets, something I don’t yet understand. Their Lonmin acquisition was brilliant, right at the start of the previous bull market. Therefore, I can’t comprehend why they aren’t deploying capital into PGM development assets, especially if those are outside South Africa. My guess is that their shareholders are worried about the future of PGMs and are enforcing management into buying "battery metals". Time will tell, but I think big PGM miners are playing this cycle badly. They ought to be closing producing mines and purchasing good PGM projects.
Excellent article. Agree. Very bullish on the commodity space with the greatest upside in the platinum group metals. The market cap of all platinum produced in a year along with recycling, only about 7 1/2 million ounces, is just $7.5 billion US. For palladium let’s call it 8,000,000 ounces of Supply with recycling and a market cap under $9 billion. The platinum group metals are not only industrial and precious but they are strategic. As you point out in your article, Supply is challenged and there are insignificant inventories other than perhaps what China has accumulated and what is held by Russia although the best thinking is Russia has significantly reduced its platinum group metal inventory . I fully agree with the generation mining analysis. The stream financing from Wheaton precious metals is very significant since Randy, Smallwood, CEO of WPM are the premier mine financing company that do intense, intense due diligence. I believe they have less than 30 projects that they currently are streaming, and it is a great testament to generation. Further, jamie, levy, CEO of generation is absolutely first class and of the highest integrity as is the entire team. at the end of the day whether generation proves to be a palladium project or a copper project is not yet clear but the upside is very significant. Thanks for the article.
How much supply will Platreef be bringing on, i think the market will struggle to absorb the big supply from here for a couple of years?
Thank you for the question FlowState Investing. Platreef will bring 100k oz of PGMs per year for the first 5 years, and then 500k oz per year thereafter. This is nowhere near enough metal to solve the 1M oz deficit per year in the PGM market. Therefore, to answer your question, the market will not struggle to absorb the new supply. Would you like a more elaborate answer? I could make a Twitter post with graphs to show this. Thank you for the support.
IVN IP's are not very clear. Ive done some more digging and see that Phase 1 comes online this year with 113k oz 3PE+Au and phase two will ramp up to circa 590k oz PGMs. This is the figure I thought was coming online this year but it looks to be in 2027.
https://www.ivanhoemines.com/news-stories/news-release/ivanhoe-mines-announces-completion-of-platreefs-production-shaft-1-at-the-tier-one-palladium-rhodium-nickel-platinum-copper-and-gold-project-in-south-africa/
I also noticed IVN have made an agreement with SBSW for 8 years but that looks to be for phase 2.
Of those numbers you mention, 100Koz will be PGMs and 500koz PGMs, the rest of ounces will be gold as Ivanhoe points in its website. Bear in mind that massive mines like Impala´s Rustenburg and Canada operations will close in between 2029 and 2035, that is 1.5Moz getting off the market per year. Deficits will take decades to solve. Hope it helps
Muy buen trabajo Alberto!. Sigue así. Un fuerte abrazo.
Gracias Juan!
Great article. You did a fine job.
Thank you Jeff! Im glad you found it interesting
Best one so far! Very thorough!
Thank you Jimmy! It took me around 200 hours to put this article together so I appreciate the support
It's appreciated, Alberto. By the way, was it you who turned Kuppy onto AMRK?
Im pretty sure Kuppy knew it before I did. I will cover AMRK in the next report. Its taking me some time due to the sheer size of the gold market. Thank you for the support
Thank you, and I look forward to reading your report on AMRK. I have not taken a position yet, and am *hoping* for a pullback in the gold price before doing so; but it's a funny old market, gold, shrouded in secrecy . . .
It will also include small gold producers and gold developers, hence the time its taking, i´ve analyzed already 100s of companies and I have a lot more to go
Hi Alberto
Very interesting. Don't you think that sylvania can be a bet, it would be profitable and with less risk, because there are not the usual problems of miners