Implats just bid for North American Palladium underscoring Sibanye Stillwater CEO Neal Froneman’s bold, brilliant vision when purchasing Stillwater, the world’s palladium “crown jewel,” a few years ago.
Implats is bullish on palladium even with the prospect of additional world production and the inevitable platinum substitution, while also seeking to diversify away from South African risk.
The remarkable story of palladium, ($1640) along with rhodium ($5200) and iridium ($1485) is that these platinum group metals (PGMs) have increased primarily as a function of industrial demand.
Investor demand has begun to stir in the gold market and when this truly takes hold the buying in the PGMs will dwarf the recent platinum inflows taking prices of all of the precious and platinum group metals to multiples of today’s levels.
Premised on the inevitable continued debasement of fiat currencies, and the ongoing and increasing precious, investor, industrial and strategic bid, owners of SBGL have massive in ground stocks of all of the PGMs and of gold. Even with SBGL’s recent strong rally to $6.30 as the stock is beginning to be re-rated, investors own all these rare metals at substantial discounts given the company’s market cap.
The Implats move is a huge positive signal, that leaves North American Palladium riders dismounted at the early stages of this bull market, with only Sibanye Stillwater and Russia’s Nornickel as horses on the trail. Given Brookfield’s 81% ownership, the deal, at a 15% discount to the closing market price for Brookfield’s stake, and flat to the closing price for the remaining minority public shareholders, will close unless a competing bid emerges.