SUF.t,...the diamonds projects in the short term (next year or two) will add nothing to very little to profits,...the market is very short term oriented right now. PGM price declines from US$1000 plus per oz to threatening the $US400 level have snookered SUF shareprice. The worldwide economic slowdown is hurting the demand for PGM's for catalytic convertors and electronics,...Platinum demand for jewelery is down as well. New catalytic convertor technology looks to reduce the need for Palladium and PGMs, especially over the next few years.
On the supply side, more mines in North America and SAf are should boost the supply of PGM metals. If the Russians turn off the taps, it may not cause the big spikes in prices that occurred in the last 18 months or so.
SUF might announce an agreement to increase production with a cash rich major mining company,...how much would that add to shareprice,...depends on rate of production? They might finally announce they have finalized a supply contract with a major auto manufacturer,...the price rise associated with that will depend on the details,...floor price especially and quantities contracted for. Too bad they didn't finalize that deal 6 months ago when Palladium was above $1000, might be closer to US$300 in a few months with current trends, unless the $US buck really tumbles, but European interest rates are predicted to move down over the next few quarters because European economies are starting to slow down,...that could lessen the oft predicted drop of the mighty US buck. They could also announce they have secured mining rights from the SAf government for the adjacent PGM properties to the Messina mine development,...don't know when that might occur, but they likely have to prove the Messina mining plan makes money before Mr. Market gets excited about that much,...the best time to secure that may be at a cyclic low in PGM prices, which may occur soon, but then Mr. Market will probably not even care.
Finally they might get lucky and find some diamondiferous pipes somewhere, but with money tight for exploration, and most results so far looking skimpy,...and I hear De Bums inventory of diamonds is rising again, prices for rough are dropping, demand for finished dropping,...will the market take much notice??
So short term trends look down, unless some bit of news about contracts, major partner or Russian supply shortage comes out to shake up the market. Should be good for a short term buy and sell on such appreciation from news to allow the squished hamster to inflate a paw or two (gggggggggggg), but catching falling knives(AKA averaging down) is against my rules now. |
