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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: seventh_son who wrote (30912)9/21/2004 8:20:05 PM
From: choyhoy  Read Replies (1) | Respond to of 39344
 
A very helpful post seventh son, but two observations:

1.) SPC has the ability to renegotiate the take-off arrangement with the auto manufacturer under certain circumstances. My understanding is that the company is exploring this possibility, which could lead to higher prices for SPC's platinum output in the near term;

2.) SPC's production is not "hedged". SPC has entered into an arrangement requiring that SPC sell, and the auto manufacturer purchase, SPC's platinum and palladium output on the terms set out in the agreement. IF SPC doesn't produce, there is no requirement that it buy in the market.

Regards,

Choyhoy



To: seventh_son who wrote (30912)11/4/2004 7:05:32 AM
From: russwinter  Read Replies (2) | Respond to of 39344
 
Post 30912 is quite a enterprise value analysis of SPC. What do figure cash flow will be in 2005 accounting for the hedges? Is $30 million US about right, or is it even more? Hedges come off and it's 45 million at today's PGM prices? 4 times cash flow (or 3 wo hedges) for a completed long life mine with large reserves and resources seems more than absurd. Why haven't these guys been raided?


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