"Cash flow is what bond holders (i.e., the smart people) will focus on, and what will enable PAL to SUBSTANTIALLY reduce interest expenses"
Cash flow won't change the 15% rate from BAM. And PAL cannot pre-pay and roll over to lower rate because of the HUGE pre-payment penalties.
Next important event is the need to rollover the $60M LOC that expires early July.
"The fact that SWC (PAL's only competitor under the current market situation) is tied up in the exclusive supply contract with Johnson Metthey, is rather a good news for PAL because SWC's contract is binding within a preset sales price range for all of their Palladium production"
You are misinformed. Price is re-evaluated monthly. And no producer has the price to uni-laterally set the price. Pd is a fungible world commodity. Market determines the price.
"PAL's only competitor under the current market situation"
Russia (Norilsk) is till producing and just sent 10x their normal monthly shipment to Switzerland.
I read the scoping doc and also the approval doc. OMG - the number of hoops they have to jump through to drill (up to) 5x8 holes. Drove through Gallatin and Custer NF area many many years ago after visiting Yellowstone. Beautiful country. Clearly anything they find and define will be accessed underground via the TBM they have in place.
There is also (a dormant) technology that extracts Pd from nuclear waste. Seems once of the byproducts of fission is Pd. This would increase supply but never got off the ground as any Pd recovered is radioactive.
Any don't forget cold fusion!!! :-)
Found this in the May Investor presentation.
"Pricing linked to spot prices and sponge premiums on a monthly basis"
Key word is monthly!!! I think any worry about SWC not getting best price for their PMs is gone IMO.
Also in the same presentation there is a picture of the mine - note the large undeveloped piece (about 10 miles) between the two active areas. Haven't seen any explicit mention of it - wonder if it is ore or just rock. Will try and find something in drilling reports. Although the article makes it look like the (surface) drilling is in a eco-sensitive area - Custer Nat Forest- , I think any production would be accessed underground from East Boulder which is why they are allowing them to drill IMO.
Let's not get over-excited. From the article:
"At this moment, palladium is the only material that can be used to run the process. Iwamura expects the process can be scaled up within TEN YEARS, provided that a large enough budget will be available for the entire time period."
Remember Pd is not consumed in the process. It is just membrane used in as osmosis type process.
There there was the flurry with US Pd coins. One post predicted 10,000,000 oz demand. So far - 0.00 because the program never got off the ground.
In my original Oct post you will see that I mentioned PE expansion was the major reason for the big rise (less so from earnings) and that earnings had some catching up to do. If that's what you call overvalued (historically) I agree.
Although bullish on AMNF it seems to me that someone big is not so quietly getting out. We are still in a downtrend and about 15% off high. SInce AMNF not a well researched stock, a big seller must have reason or knowledge to sell. I start to be concerned about Q2 results.
That may be but has nothing to do with miners wages which you claimed.
SCo has more potential for growth than MCo IMO. MCo already supplies much of the interior already (seats, lighting, galleys, toilets, oxygen) and would have to fight to take market share. And new products can take years because of FAA needed certifiication.
SCo is a much bigger market and can be grown by M&A. In fact in the cc they expectged MCo to be organic growth oriented and SCo to grow mainly by M&A.
After the split takes place I would expect someone to take a run at SCo.
"strikers in south africa being paid much more which also means palladium going higher "
Higher wages do not mean higher Pd price. Miners cannot set the price. PD is a fungible world commodity market. What is does mean is that miner co's profits will be lower. In the extreme, higher costs might cause some shafts/mines to close but higher prices may forstall that.
The Northern Miner
South Africa teeters towards recession on labour dispute
Posted on June 15, 2014
The latest attempt to end South Africa’s 21-week platinum strike has failed, pushing the country towards a recession and increasing the odds the sector will be smaller and more mechanized when it eventually resumes operations.
From my post of OCt 24th (close was 1.79)
"If you look at a long term chart of AMNF you can see long periods of sideways motion. Price rise here has been mostly because of P/E expansion. IMO At least 6 months of sideways (1.75-1.90) until earnings catch up and maybe see new product successes. "
"in mining a LIfe of Mine of 5 years is NOTHING. That means unless they continue to spend large amount of capex to develop and MINE (not just drill and locate) they are out of business in 5 years. SInce development can takes years expect continuing high level of capex every year along with more financing.
Compare vs SWC :
"The Company estimates the mine life of the Stillwater Mine and
the East Boulder Mine to the year 2032 and 2080, respectively."
From annual report.
After listening to the conference call and reading the slide presentation I think the Services Co is (will be)a better investment than the Manufacturing Co. Reason: IMO will be easier to grow SCo than Mco. BEAV already supplies seats, galleys, lavatories, lighting and oxygen systems. That pretty much covers interiors except for entertainment systems. Results will be dependent on the health of the aircraft industry and less on mgt capabilities. SCo on the otherhand is a much larger market and much more fragmented and amenable to M&A growth. On the cc the implication was that MCo will be focused on organic growth and Sco on growth via M&A. AS to which is "core" I see little diff in sales, sales growth and profitability between the two. They will both be fine companies. The extra kicker is that SCo may be a takeover target. Several of the possible buyers of Mco have already said they have no interest. Annoying to have to wait until Q1/2015 to see how this plays out.
"With the new labor agreement,.... costs of PGM's, ...are headed north."
Why? The producers cannot raise their price - they are selling into fungible world market - they have no pricing power. All it will do is reduce their profit. Only way costs affect market price is if they cause mines or shafts to close thus reducing supply. But whether mines or shafts will be closing is unknown yet. Ironically the run-up in Pd may keep them open. In commodities, high prices are usually their own cure.
" We don’t want to fall into the trap of suddenly trying to increase our mined production."
And get into financial trouble like some other NA PD producer did.