This report gives a detailed introduction to Span I Company. Baiyin Nonferrous indirectly holds a 20.06% stake in Span-1, becoming its largest shareholder.
Spanyi is one of the largest rare and precious metals companies in the world. It is the world's largest platinum mining company, the second largest palladium mining company, the second largest rhodium producer in the world, and the second largest gold miner in South Africa. It is also one of the top ten gold companies in the world. It is listed on the Johannesburg Stock Exchange and New York Stock Exchange of South Africa under the name of Sibanye-Stillwater (stock code SBGL). The company is a mature foreign mining listed company with scattered shareholders and no actual controller. The largest shareholder is first Gold (a wholly owned subsidiary of Silver Nonferrous), while the other shareholders are mainly large international investment institutions, such as EXOR Group, American Vanguard Group, Blackrock Group and so on.
In 2012, Spanyi was spun off from its parent company, Jintian, and listed on the stock market. Since its establishment, Spanyi has continuously acquired precious metal assets such as gold and platinum at low precious metal prices, and has grown into a global precious metals giant.
Three acquisitions in 2013, one in 2015 and one in 2016. Spanyi acquired still Water in May 2017 ($2.2 billion) and completed the Lonmin acquisition in May 2019 (about $380 million). When the goal of M & An is completed in stages, the company will begin internal integration, improve profitability and reduce the company's debt ratio.
The precious metal resources are 14574 tons and the reserves are 2919 tons, which may be the first in the world. The amount of resources far exceeds that of Barrick and Newmont, the world's gold leaders. Precious metal assets can be divided into four parts: (1) the PGM (Platinum Group elements) mine in the United States, with a resource capacity of 2595 metal tons, with an average grade of 16.4g / ton (the domestic gold mining grade is generally about 2g / ton), and reserves of 796t with a grade of 17.2g / ton. (2) South Africa has PGM resources of 3748 tons (average grade 4.5g / ton) and reserves of 634t (average grade 3.2g / ton); (3) South Africa has gold resources of 3038 tons (average grade 2.9g / ton) and reserves of 516t (average grade 2.7g / ton) (4) 2019 completed acquisition of Lonmin, resources (PGM+ gold) resources 5000 tons (grade 4.4g / ton), reserves 970t (grade 3.9g / ton). The company also has 35000 tons of uranium resources and 8.46 million tons of copper. The company has the idea of developing uranium mines.
The company produced 92 tons of precious metals (PGM+ gold) in 2018, including about 130 tons of Lonmin.
Due to strikes and mining accidents, the company produced 36.6 tons of gold ore in 2018 (normal gold production is between 40 and 50 tons), PGM production in South Africa is 36.6 tons, PGM production in the United States is 18.4 tons, and a total of 92 tons of precious metals were produced in 2018. Lonmin produced 38.2 tons of PGM in 2018. If Lonmin is included, the company's output of gold and gold equivalents is about 130T, ranking third in the world.
The bliz project of the company's US PGM business is expected to be put into production in 2021, which will increase the production of platinum group elements (mainly palladium) by 9.3t. The ore grade of the bliz project will reach nearly 24g / ton, with a partial capacity of 30g / ton.
Due to the company's large output of precious metals, the company's performance is very flexible. A 10% increase in the price of precious metals could theoretically increase the company's profits by about $300 million. A 10% rise in the price of gold could theoretically increase net profit by about $100 million.
The company lost $170 million in 2018 due to a mining accident (resolved in 2018) and a strike. Overseas institutions forecast the company's net profit of $2.38, $8 and $930 million from 2019 to 2021. The company currently has a market capitalization of $2.82 billion, corresponding to price-to-earnings ratios of 12, 4 and 3 times. Because the problem of strike was only resolved in April this year, it is expected that there will still be losses in the first half of this year, and profits will improve significantly in the second half of this year.
According to the valuation methods commonly used abroad, the valuation advantages of EV/EBITDA and EV/EBIT, Spanyi are also relatively obvious. EV/EBITDA is about 1/2 of the industry average (excluding domestic), and EV/EBIT is 4.9, which is 1/3 of the industry average. In vertical comparison, the company's EV/EBITDA, EV/EBIT and Pram B are all near the historical average. The company's annual report values NAV at $6 billion, twice its current market capitalization.
The valuation is more flexible. In terms of resource / market value ratio, reserves / market value ratio and output / market value ratio, the company greatly exceeds the industry by an order of magnitude.
Risk tips: lead, zinc, copper, gold, silver and other main products and Span main products gold and platinum series metal price fluctuation risk; industry policy risk; exchange rate risk; construction and production schedule of projects under construction is not as expected; stable operation risk; M & A project progress is not as expected mine production safety risk