SAYS PRODUCED A TOTAL OF 130,338 PGM OUNCES FOR THE YEAR
SAYS PRODUCED 34,000 PGM OUNCES FROM CROCODILE RIVER MINE IN THE QUARTER
((Bangalore Equities Newsroom; +91 80 4135 5800; within U.S. +1 646 223 8780))
(For more news, please click here)
COPYRIGHT
Copyright Thomson Reuters 2010. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
I was looking at ELR late 2009 before it was tipped in the times and rose 40%.
ELR has one producing mine and a number of developments of which Spitzkop is the most advanced although not at the stage of having any firm cost estimates.
Crocodile River is established at around Oz120 tpa and with a 2010 expansion phase this is targeted to increase up to 200tpa. Actually I know the history of this mine from my days in South Africa and a catastrophic investment I made in the then Barplats. The problems Smoky Hills are having are nothing compared to the past problems at Crocodile River that resulted in the mine being totally shut down for a number of years. The mine has been totally redeveloped and now less mechanised methods are being used and are proving to be successful. Problems out of the way ELR can finally see profits coming from the mine.
As regards the development projects, ELR do not provide as much information as PLAA so I cannot really say where we are, withought significant more reserach.
I would say that on balance I think prospects for ELR are good and Crocodile River should become a significant profit contributer once expansion to 200tpa is achieved. The sp has risen significantly over the last few months so I do have a concern that it has run ahead of itself.
Both have one mine ramping up to full production although Crocodile River has been years in development (actually since 1987). The links suggest Crocodile River alone supports a share price of 77p (which is about where ELR is trading at the moment, with upside from the expansion coming on top of this) while Smoky Hills supports a longer term price of A$ 2.30 compared to a current price of A$1.08. PLAA has a long way to go and this is where I see we have the most to gain.
ELR therefore looks to be much more fully valued than PLAA. Also with past disasters on Crocodile River I am more willing to support PLAA developing Kalplats well before ELR develops Spitskop.
Also the PLAA link mentions that there is a 20% pothole provision in the mining plan while results from actual drilling are 11%. It is clear that potholes are expected so the problem is really that we were not informed by PLAA management that pothole issues will be coming up over the ramp up.
Finally in conclusion my view;
ELR are more developed as Crocodile River is ahead of Smoky Hills, and it seems that past catastrophic mistakes are are now truly history. I agree that the company will now move to strong profitability, my concern however is that the share price has exploded lately and I may consider this again if we go below 60p. If PGM prices suddenly move signfiicantly up again then for sure everything changes and sp could well move up to test 100p range, but could possibly fall back just as rapidly.
I see PLAA as the tortoise and ELR as the hair. As I am looking for realising huge long term gains I stay fully with PLAA for solid long term revaluation and will forego maybe some good short term gains.
The shares fell over ten per cent last night on canadian exchange and this is reflected in the slide this morning .It has been on a good run so an inevitable retrace here-but given the more robust nature of plat price in last six months and yesterdays news would expect further consolidation from here.MN
Not in this share anymore but still watching it on the side. It's been a solid performer for me in retrospect. From my experience when it rises it rises quickly and strongly. It does periodically retrace but these retraces are relatively small in magnitude and short-lived. Look out for the occasional large buys and large sells. These large buys can really get the SP going. I suspect that there is an institutional investor who sells and buys back repeatedly. I found it to be a good share for trading.
The contents of the postings summarised here represents the opinions of the authors and not of Interactive Investor Trading Limited.
They have not been approved or issued by Interactive Investor Trading Limited.
