appreciative, as always, from one platinum bull to another.
one of your readers asked about a platinum stock. i have a substantial equity position in sibanye-stillwater, SBGL, a company based in south africa, led by the visionary, disciplined and caring Neal Froneman. SBGL is now the world’s largest platinum producer; 2nd largest palladium miner behind norilsk in russia, and 3rd largest gold miner. total market cap about 3 billion+. lots of debt from prescient stillwater mine acquisition, - buying the us palladium miner when palladium was 600 and substantially diversifying into non south african assets - with a stated goal of paying down debt and resuming dividends, likely to be 5%, in 2020. sbgl recently bought lonmin, making it the largest platinum producer, at what i believe will be, as with palladium, near a market bottom before massive platinum price increases.
although i have bought this stock in the 3s, i continue to buy, even on friday last week.
it remains dramatically mispriced, in part a function of south african risk, in part a function of the long gold strike now ended, in part a function of ongoing negotiations with the union re the platinum mines, and in part importantly, of the market’s lack of perspective on the platinum group metals, and even gold.
i am NOT a metals bug, but see gold at $5000 simply based on its small annual production (including recycling) of $225 billion - small in the context of world currency flows -, the inability for production to increase faster than world currencies depreciate in value, and that gold has the most certainty of maintaing purchasing power over history. while low interest rates are a catalyst, this view is not premised on rates or chaos.
further, it extends to platinum where world production and recycling is only 8 million ounces (vs golds 150 million), worth less than 7 billion. yes, i see platinum, an essential industrial, strategic and precious metal, in the multiple thousands; rhodium at $20,000, palladium at $4900.
fyi i do write a free blog platinumisrare.com, and was a former general partner of lazard freres.