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Lonmin To Unveil Record Losses As It Fights For Survival

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http://www.telegraph.co.uk/finance/newsbysector/industry/mining/11980874/Lonmin-to-unveil-record-losses-as-it-fights-for-survival.html

World's third largest platinum miner will unveil yawning losses in annual results as it struggles with tumbling prices and the rising cost of labour

Lonmin, the world’s third-largest platinum miner, is expected to unveil record losses as it discloses support for a $400m (£266m) rescue rights issue.

Alongside annual results, due tomorrow , the 106-year-old miner is to publish a prospectus for the lifeline rights issue, detailing investor support.

The group has been hammered as platinum prices have plunged to six-and-a-half-year lows, due to oversupply and slowing demand from China, as well as rising South African labour costs.

The company will write down the value of its mines by as much as $2bn, with operating losses reaching $207m, in results for the year to September 30.

It is the third time in six years that Lonmin has gone cap in hand to shareholders. Investors paid $457m in 2009, at £9 per share, and $777m at a deeply discounted 140p per share in 2012.

The measures, including thousands of job losses, are necessary for banks to agree to refinance $563m in debt.

So it's the cost of labour that's the issue and nothing to do with the debt.

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I should add: it is possibly advisable to wait for the German (or global) car industry to crater first (catalysts...). We are not quite there yet, telling from the amount of freight trains full of shiny cars that I see on a daily basis.

Edited by Silverfinger

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World's third largest platinum miner will unveil yawning losses in annual results as it struggles with tumbling prices and the rising cost of labour

How are the others platinum miners doing?

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I should add: it is possibly advisable to wait for the German (or global) car industry to crater first (catalysts...). We are not quite there yet, telling from the amount of freight trains full of shiny cars that I see on a daily basis.

i don't think it will crater....but given the shenanigins with the data-meddling, volkswagen might end up with the same street cred-status as skoda used to be, and priced accordingly.

available, certainly..and very,very cheap.

They will not be able to command the quality premium they once had, for sure.

Edited by oracle

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i don't think it will crater....but given the shenanigins with the data-meddling, volkswagen might end up with the same street cred-status as skoda used to be, and priced accordingly.

available, certainly..and very,very cheap.

They will not be able to command the quality premium they once had, for sure.

To the extent that the emissions are an aspect of quality consumers actually care about. I'm not sure that they do. Fuel consumption is a different matter.

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1.png

16p

So this is what a "bottom" feels like. However, the decline could be terminal, and that would be the end of your shares! Will they see £40 a share ever again?

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How are the others platinum miners doing?

The world's 4th largest, after LMI, is AQP at 12p. It's shareprice has been a little stronger, but the whole sector is down in the dumps. £200,000 on these shares or a studio flat..... hmmm what would the "investor" do?

5.png

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Difficult call for shareholders to throw more equity at this.Anglo-American is the biggest and has just sold one of its deep mines (heavy labour).They have another called "Union" also heavy labour they will probably sell.Their huge open pit mines are much lover cost and i would think they can up production in those once they lose ounces from the high cost mines they are selling.

Lonmin doesnt have that luxury.It can close the highest cost shafts but is probably cash negative at spot.They have cut capex for a long time so id expect the mines are close to the point of no return and they are in a corner.

Even if they could slow cash burn a lot of the new equity would probably go on stand still capex.

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Falling.... Lonmin is going to be 1p a share.

elvisrocks
24 Nov'15 - 13:11 - 6617 of 6620 0 0

Just a friendly word to all you out there on the current trading price of these rights, 0.05p around lunchtime today.

As you will be aware, the share price pre rights actually held up rather well, 10p roughly day before ex-rights and 12p roughly on Record Date, so 10:1 ratio or 12:1 ratio.

Today's rights price you see now of 0.05p is equivalent to the 10p we saw at the end of last week, now collapsing to about 3.5p equivalent, a price never remotely seen even in the madness of the 46:1 being announced and the sell off that began then on the 9th/10th/11th.

So, it's either the bargain of the century if you can get them or the biggest p.ss take ever if you are sucked into selling them! DYOR etc.

Source: Registration is required http://uk.advfn.com/cmn/fbb/thread.php3?id=12397493&from=6609

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pt92-pres.gif

Platinum is at about $1000 right now, and not that far away from the 2008 low.

You could also call that 2008 value a 'high' compared to 12 of the previous 16 years.

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Lonmin is the most shorted company in Europe as its shares fall 99 per cent

It is not a prize many companies want to win: Lonmin is the most ‘shorted’ businesses in Europe in 2015 according to Markit data. The embattled miner has seen its share price drop 99 per cent this year, as it struggles with a mounting debt pile, and falling platinum prices, and in April, 9.6 per cent of its shares were out on loan.

Reflecting the high exposure to mining and energy stocks, the UK market accounted for a quarter of the most successful short-selling activity in Europe.

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The share price is now at 56p but I believe there has been some share consolidation! I'll need to wait a few days for the charts to update, so we can see what it's worth in "old" money.

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