Excellent writeup! Since you project prolonged supply deficits for Platinum (as opposed to palladium) then a pure-play platinum ETF like PPLT may make more sense than the Sprott vehicle that holds both platinum and palladium.
You have put a lot of work into this report and the level of detail is commendable. In the resources sector, it is extremely difficult to forecast demand / supply / price trends over such a long period of time and a lot of it is path dependent, whereby changes in any one variable can result in a non-linear change in other variables.
For me, as my investing career advances and the capital under management grows, my models become far more "back of the envelope". In this case
(a) An incorrect and widely held narrative that EV's will crush ICE / PHEV
(b) Supply < Demand deficit with inventories making up the imbalance
(c) Highly concentrated supply in only a few unstable jurisdictions
(d) China Inc. holds 80% of above ground inventory
(e) Current spot price is below c. 30% of producer's AIC
(f) High speculator short positioning in the commodity, possibly due to (a)
The combination of these factors means that at some point price discovery will occur. That inflection point will not be linear especially as / when Soros's Reflexivity kicks in.
Obviously the spike over the last few days means this is probably not the time to buy, (although I am happy holding my SLP.L
I am interested in both Generational Mining and Bravo Mining. You mentioned these were high grade, shallow depth, but they seem to be about 0.7 -> 0.9 g/t.
Your article mentioned "Average grade worldwide is now at 2.85 g/t PGM"
ie is their advantage shallow, low cost, rather. than grade?
Very intriguing report. Do you have an expectation in mind for when the high-quality firms will become significantly positive in cash or earnings and what they will do with capital returns-stock buybacks, dividends, or M&A?
SA is a terrible place. SLP SBSW and others are not worth investing in.
Quote from my report: "The grade represents the combined physical grade of all PGMs (Pt + Pd + Rh + Ru + Ir + Os) in the ore, weighted by the production volumes of each region or mine."
Bravo is at least 2 g/t while $GENM is closer to 1 g/t. But this is PdEq so difficult to compare with global average from my report. The graph I built was purely to show the fall in average grades.
Also remember the definition of average: 50% is lower, 50% is higher.
Exceptional and insightful report Alberto. Thank you. I believe that Pt. has the most upside potential from the PGM group. While hydrogen is a great story and may have a turbo effect on the price at one point, I think investment (and investment jewelry) demand growth might be underestimated. I consider Pt. a third monetary metal besides Au and Ag. In Canada all 3 are sales tax exempt on that account when in bullion form. Platinum is a very popular investment product in China. I expect people re-discovering pt. as a store of value fuelled by high price of gold. It offers compact size at relatively low price in comparison to gold. Aside from physical I own some Sprott, but had difficult time selecting miners. I have a decent position in Magna Mining which has close to 30 million oz. in PT/Pd as well as small position in Nickel Creek Platinum. Any thoughts on that deposit/company? It has been a disappointment for me so far. Premium Resources which I own has some PGM, but not a lot from a big picture. Cheers!
Great read Alberto, love the analysis! I was thinking about investing in Valterra Platinum (formerly Angelo owned), especially with the spinoff and listing in LSE, but you don’t seem to be bullish on South Africa/Zimbabwe. I was wondering why that is the case and whether you’d still prefer a company like Bravo instead?
Is it regarding the electricity problems there or something else because don’t these regions concentrate most PGM supply? If it is electricity, they did mention they’re working w/ independent renewable power producers in the area to supply them by 2026.
Much respect for your diligence Alberto, seriously.
I wonder whether the demand prediction is fully factoring in what seems to be a full-fledged automotive capacity bubble in China. We should see automotive PGM demand correct downwards pretty sharply, I think, at least for a year or two. I submit to your consideration the following:
There are large inventories in Chinese makers and dealers.
Chinese dealers are collapsing in droves and the cars are going on fire sales.
Some makers are still building factories into the glut.
Chinese makers are highly indebted and many are losing money.
"“This points to a bloodbath later this year,” he said. “This could be the first domino that would finally put pressure on weaker players -- startups like Neta and Polestar -- that have been teetering.”"
"Now, Evergrande in the automobile industry already exists, but it has not collapsed," said Wei Jianjun, chairman of Great Wall Motors.
Read the whole thing if you haven't. It's worth your time. Here's a video on the same subject with some visuals:
and my personal take-away is: before you go long a niche product, check for evidence of upstream over-consumption, temporarily elevated by unsustainable growth. With China being the world's main commodity consumer, and over-building being so prevalent in Chinese economics, this rule seems like it should be valuable to keep.
No, I won't short BYD, I don't have an opinion on it either way. In fact I delegate single stock analysis to other people so I never take a position that hasn't been underwritten by a stock picker I highly respect. My "job" is to allocate across markets and sectors, and I leave stock picking (which is essential, I'm not an index investor) to other people.
Excellent writeup! Since you project prolonged supply deficits for Platinum (as opposed to palladium) then a pure-play platinum ETF like PPLT may make more sense than the Sprott vehicle that holds both platinum and palladium.
Thank you Kyle
That is because of my assumptions. I am bullish both metals though
Hi Alberto.
You have put a lot of work into this report and the level of detail is commendable. In the resources sector, it is extremely difficult to forecast demand / supply / price trends over such a long period of time and a lot of it is path dependent, whereby changes in any one variable can result in a non-linear change in other variables.
For me, as my investing career advances and the capital under management grows, my models become far more "back of the envelope". In this case
(a) An incorrect and widely held narrative that EV's will crush ICE / PHEV
(b) Supply < Demand deficit with inventories making up the imbalance
(c) Highly concentrated supply in only a few unstable jurisdictions
(d) China Inc. holds 80% of above ground inventory
(e) Current spot price is below c. 30% of producer's AIC
(f) High speculator short positioning in the commodity, possibly due to (a)
The combination of these factors means that at some point price discovery will occur. That inflection point will not be linear especially as / when Soros's Reflexivity kicks in.
Cheers
John
Hi John.
Thanks for the comment. Let me comment on your observations:
a) I think EVs will be deployed slower than thought. But I much rather be safe than sorry. Stronger ICE/hybrid demand will be great for PGMs
b) Inventories are non existent relative to demand
c) Agreed, that makes this a great geopolitical play
d) South Africa has the most inventory
e) Yes
f) I already pointed that out on previous posts, I think that is mostly due to trend traders
Cheers.
Thanks for the report - Lots of detail to digest
Obviously the spike over the last few days means this is probably not the time to buy, (although I am happy holding my SLP.L
I am interested in both Generational Mining and Bravo Mining. You mentioned these were high grade, shallow depth, but they seem to be about 0.7 -> 0.9 g/t.
Your article mentioned "Average grade worldwide is now at 2.85 g/t PGM"
ie is their advantage shallow, low cost, rather. than grade?
Very intriguing report. Do you have an expectation in mind for when the high-quality firms will become significantly positive in cash or earnings and what they will do with capital returns-stock buybacks, dividends, or M&A?
I dont really care for that since most of them are South African and that jurisdiction is the worst
SA is a terrible place. SLP SBSW and others are not worth investing in.
Quote from my report: "The grade represents the combined physical grade of all PGMs (Pt + Pd + Rh + Ru + Ir + Os) in the ore, weighted by the production volumes of each region or mine."
Bravo is at least 2 g/t while $GENM is closer to 1 g/t. But this is PdEq so difficult to compare with global average from my report. The graph I built was purely to show the fall in average grades.
Also remember the definition of average: 50% is lower, 50% is higher.
Exceptional and insightful report Alberto. Thank you. I believe that Pt. has the most upside potential from the PGM group. While hydrogen is a great story and may have a turbo effect on the price at one point, I think investment (and investment jewelry) demand growth might be underestimated. I consider Pt. a third monetary metal besides Au and Ag. In Canada all 3 are sales tax exempt on that account when in bullion form. Platinum is a very popular investment product in China. I expect people re-discovering pt. as a store of value fuelled by high price of gold. It offers compact size at relatively low price in comparison to gold. Aside from physical I own some Sprott, but had difficult time selecting miners. I have a decent position in Magna Mining which has close to 30 million oz. in PT/Pd as well as small position in Nickel Creek Platinum. Any thoughts on that deposit/company? It has been a disappointment for me so far. Premium Resources which I own has some PGM, but not a lot from a big picture. Cheers!
$NICU is mostly a copper nickel play. They do not have 30M ozs of PGMs Sebastian. Nickel Creek has an uneconomic project, not investable
You are correct on NICU, it is just a tad over 3 million oz., I miscalculated.
Great writing on PGM. Great pick of stocks too. Bravo and generation mining. Have you looked into Chalice Mining (asx listed)?
Yeah, great company too
Well done, Generation minding has also Sprot and Lundin as shareholders.
Great read Alberto, love the analysis! I was thinking about investing in Valterra Platinum (formerly Angelo owned), especially with the spinoff and listing in LSE, but you don’t seem to be bullish on South Africa/Zimbabwe. I was wondering why that is the case and whether you’d still prefer a company like Bravo instead?
Because SA & Zimbabwe are a ticking bomb
Is it regarding the electricity problems there or something else because don’t these regions concentrate most PGM supply? If it is electricity, they did mention they’re working w/ independent renewable power producers in the area to supply them by 2026.
Its a mess. Those countries are a failed state
Really good job Alberto. To be honest...a few good players for this sector.
Much respect for your diligence Alberto, seriously.
I wonder whether the demand prediction is fully factoring in what seems to be a full-fledged automotive capacity bubble in China. We should see automotive PGM demand correct downwards pretty sharply, I think, at least for a year or two. I submit to your consideration the following:
There are large inventories in Chinese makers and dealers.
Chinese dealers are collapsing in droves and the cars are going on fire sales.
Some makers are still building factories into the glut.
Chinese makers are highly indebted and many are losing money.
https://www.reuters.com/business/autos-transportation/china-auto-market-price-war-stokes-fears-industry-shake-out-2025-05-27/
"“This points to a bloodbath later this year,” he said. “This could be the first domino that would finally put pressure on weaker players -- startups like Neta and Polestar -- that have been teetering.”"
"Now, Evergrande in the automobile industry already exists, but it has not collapsed," said Wei Jianjun, chairman of Great Wall Motors.
Read the whole thing if you haven't. It's worth your time. Here's a video on the same subject with some visuals:
https://www.youtube.com/watch?v=b_L9s27CMow
and my personal take-away is: before you go long a niche product, check for evidence of upstream over-consumption, temporarily elevated by unsustainable growth. With China being the world's main commodity consumer, and over-building being so prevalent in Chinese economics, this rule seems like it should be valuable to keep.
Amazing input Xi. Are you considering shorting BYD? Thanks
Wow you are too kind.
No, I won't short BYD, I don't have an opinion on it either way. In fact I delegate single stock analysis to other people so I never take a position that hasn't been underwritten by a stock picker I highly respect. My "job" is to allocate across markets and sectors, and I leave stock picking (which is essential, I'm not an index investor) to other people.
Gracias por el informe, Alberto. Grande!
He visto, sin embargo, que en la lista de productores no has incluído Umicore como reciclador de PGM's. Por alguna razón en concreto?
Saludos
Hola. La razón es esta:
Umicore’s annual reports and sources do not provide specific PGM recycling tonnages.
Gracias
Really really good Alberto! Nice to read your incredible analysis!
Thanks Javier
5 Stars
Thank you Monjapino
Muchas gracias Alberto, que opinas de Sylvania?
No invierto en SA
Thanks a lot for your report 🙏 !
What are you thinking about Zimplats Holdings?
In dont invest in SA or Zimbabwe