Will another bidder emerge?

11th Oct '08 by Murakami

4 comments 2653 reads

Anyone care to speculate on what the future holds for Lonmin now that Xstrata has withdrawn its bid? The fall in Lonmin's share price when the bid fell through should send a strong message to the board.

Is the decline in value from Xstrata's bid for £33 a share all down to the platinum price? The platinum price has halved in the past three months, although one would assume - as Sir John Craven has argued - that the long-term demand fundamentals for platinum remain positive.

Does anyone have a view on the calibre of the new CEO, Ian Farmer? Was it time for Brad Mills to go or was that driven by the bid?

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About the Author

Murakami

Premium Member

4 comments

Murakami

11th Oct '08

One factor seems to have been the series of reductions of production targets because of problems at its South African mines (strikes, safety stoppages and equipment shutdowns).

http://allafrica.com/stories/200809300566.html

Stocktaculous

30th Oct '08

Latest news is that September quarter and year-end production numbers from Lonmin show the group managed to hit its latest, albeit twice-revised, production target for the year. It started out with a forecast production of 900,000 ounces of platinum for the year to end-September. That was revised to 775,000oz in April and then to 725,000 in early August. The group has now reported final sales for financial 2008 of 726,918oz of platinum mined from 12.4 million tonnes of ore - down 10.9% on financial 2007.

http://www.miningmx.com/platinum/881692.htm

MrT

24th Apr '09

Good news from Lonmin today after it unveiled a $575m refinancing package alongside a 30% rise in second quarter sales and maintained its sales guidance for the full year at 700,000 platinum ounces, despite the current economic slowdown.

According to the Guardian, analyst John Meyer at Fairfax said:

"We hope Lonmin's new leadership will continue to make good progress and position the company well for a global economic recovery. Platinum group metal prices are likely to continue to be highly volatile due to weak auto markets and ETF [exchange traded fund] buying/selling activity, but long term, platinum in particular should be strong and ensure healthy revenues."

http://www.stockopedia.com/news/announcement/LMI/090423lmi000506.htm

MrT

11th May '09

Hmmm... Less encouragingly, it today announced a 1st half loss of $196m pre-tax in the six months to the end of March, against profits of $396m in same period last year, and a 2-for-9 rights issue to raise $457m (£303m). Stock down 10% and a pretty glum outlook, itnow seems. Seems I misread the latest statement!!!

Whilst the long term fundamentals of PGMs remain strong, we anticipate no near
term relief to the current challenging market conditions. For Platinum in
particular, despite the moderate rise in price during the latter part of the
period, an anticipated short term improvement in jewellery demand coupled with
investment interest is not enough to compensate for the ongoing weakness in
automotive demand. This continuing market downturn had a major impact on pricing
during the period, with our average PGM basket price during the first half of
2009 declining significantly to $699 per ounce, from $1,558 per ounce in the
prior year period, a 55% reduction. As a result, our cash flows and
profitability remain under pressure.

http://development.stockopedia.co.uk/news/announcement/LMI/090511lmi000497.htm

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Will another bidder emerge?

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Murakami

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