Surf Report 5: Party Waves in PGM Miners
While we’re having some fun riding some initial waves at Gold and Silver beach let us not forget about another break we need to scope out that appears to be setting up for some nice sets as well. What is a “party wave”? In surfing its defined as a nice rideable wave that a group of surfers can enjoy together…
Looks fun doesn’t it! Like Silver and Gold, many precious metal (PM) enthusiasts will likely enjoy the waves building up in Platinum Group Metals (PGM) Miners during the next swell higher. By the end of the PM bull run of the early 2000s, Silver was certainly crowned the king of precious metals in terms of performance but some investors may not have noticed or have forgotten how well Platinum performed at the earlier stages of the bull market.
Could Platinum shine brighter again? Nobody knows for sure but Platinum itself has a very bullish long term wave structure as we saw in Part 10 of the Upcoming 21st Century Stagflationary Depression with a Primary degree wave 5 target approaching as high as the $3000 level. Perhaps we can ride some of those PGM waves and leverage any energy we gain there for the final “Nazare” level Intermediate wave (5) in silver! Sort of like a tow-in so to speak! Now we must remember that Platinum is still considered a much more industrial metal than silver but according to the World Platinum Investment Council, a 556 koz Platinum deficit is forecasted for 2023 as demand is expected to grow by 24%, while supplies will increase by just 3% due to severe constraints.1 Sounds like the makings of a PGM Party Wave to me!
Since there is no ETF that I found for purer play platinum miners, for this Surf Report I’m going to look at a handful of popular PGM Miners as well as a couple developers and explorers.
Anglo American Platinum
Anglo American is British listed multinational mining company with headquarters in London, England. It is the world's largest producer of platinum, with around 40% of world output, which has operations in Africa, Asia, Australia, Europe, North America and South America. Here we see a very large Primary 1-2 setup. The verdict is still out whether Primary 2 has completed. Provided there are 5 impulsive waves up off the low recent low, the risk of going lower from here becomes reduced.
Impala Platinum
Impala Platinum is a South African holding company that owns several companies which operate mines that produce platinum and platinum group metals, as well as nickel, copper and cobalt. Their operations are located on the Bushveld Complex in South Africa, the Great Dyke in Zimbabwe. Impala has a bit of a different structure with what I view as a large ABC diagonal for Primary 1. Just like Anglo American it remains to be seen whether the Primary wave 2 low is complete. The rally from the September 2022 lows has not been impulsive and has had a very deep retrace. My primary count is a completion of what’s called a WXYXZ triple combo correction perhaps down to the 38.2% Fib level.
Sibanye-Stillwater
Sibanye-Stillwater has established itself as one of the world’s largest primary producers of platinum, palladium, and rhodium and is also a top-tier gold producer. SBSW has a diverse portfolio of mining and processing operations and projects and investments across five continents. The Group is also one of the foremost global PGM auto catalytic recyclers and has interests in leading mine tailings retreatment operations. More recently they secured entry into the battery metals sector through a partnership with and investment into Keliber, a leading European lithium project. Like Anglo American and Impala, I see a fairly large Primary 1-2 structure forming. We must again be patient while Primary 2 makes its last few squiggles before we can expect a sizable rally in Primary 3.
Northam Platinum
Northam Holdings is an independent integrated PGM producer whose primary operations are centered on their three wholly owned mines, Zondereinde, Booysendal and Eland, and the additional metallurgical operations at Zondereinde including a smelter and base metals removal plant. Northam’s three main mined metals are platinum, palladium and rhodium. I’m counting a clean 5 waves up off the 2020 low to complete Intermediate (1) followed by a long ABC correction that is nearing completion. Again we’re looking for 5 waves up to verify that (2) is complete. This stock is listed on the Johannesburg Stock Exchange by the way.
Platinum Group Metals
Platinum Group Metals is the operator and majority owner of the Waterberg Project, a bulk underground palladium and platinum deposit located in South Africa. They also founded Lion Battery Technologies Inc. in partnership with Anglo American Platinum Limited to support the use of palladium and platinum in lithium battery applications. I have to be honest here these waves are not the best right now. The rally from the 2018 low was not impulsive. In fact we might be seeing the beginnings of a much larger Intermediate (5) wave down structure here. Five impulsive waves up from the current level would lower the uncertainty in this chart but even that move could be interpreted as a C wave in a much larger Intermediate (4). A breakdown at any time here would signal the red count is in play to perhaps much lower lows. I think we need to be careful riding this one since it seems awful close to some jagged cliffs!
Stillwater Critical Minerals
Formerly known as Group 10 Metals, Stillwater Critical Minerals is a Canadian mineral exploration company focused on its flagship Stillwater West Nickel/PGE/Copper/Cobalt and Gold project in the famous Stillwater mining district of Montana, USA. According to a recent resource estimate, the Stillwater West project has up to 1.6B lbs Ni, Cu, and Co, plus 3.8Moz Pd, Pt, Rh and Au.2 If we count the impulsive move off the 2015 lows as a Primary 1-2, PGE.V is in the very heart of Primary 3 which so far has been muted but can certainly accelerate if it can break through the Fibonacci resistance pivot between the 61.8% and 78.6% levels. As always timing is notional. There remains a lot of overlap in (3) so far so patience is again necessary since it break down and make a much wider flat for a deeper Primary 2. Nice ride here if she breaks up through resistance here.
Clean Air Metals
Clean Air Metals is a Canadian based platinum and palladium exploration company. The firm is focused on its Thunder Bay North and Escape Lake projects located in the Thunder Bay region of Ontario. Investors were a bit shocked when the company announced that its resource reserves may have been overestimated3 As we can see in the chart many were quick to "sell the news" as they say. Was that the bottom? We need 5 impulsive waves up to be sure but it is making a try here. Its way too early to tell if this will be a good ride as we need more time to see the structure unfold. Very speculative but sometimes the best waves are the ones that have yet to form and other surfers have disregarded.
Summary and Observations
Patience will pay for those that are willing to wait for the PGM party waves to begin. As we’ve seen, the major producers look to be making major primary bottoms. Some of these do look a bit uncertain though so caution is needed in some of the developers/explorers. Our Surf Report table below summarizes what we saw in the charts. Fib extension targets assume Primary degree lows have been seen (but that remains to be seen).
As always thank you for reading this Hypersonic Surf Report! I hope you are all enjoying the waves at the Silver and Gold beaches! Don’t forget about Platinum/PGM beach; the waves aren’t perfect yet but I suspect it won’t be long until we can share a few party waves there. Next we’ll do a deep dive into the Energy sector. As we saw in Part 8 of the U21CSD, the energy sector looked primed for another leg higher. Like Platinum it has also been in a long consolidation which may be nearing its end. A few surf reports are certainly warranted for the Oil, Gas, and the Uranium Sectors.
Until then..
Cheers and #EndTheFed
-Hypersonic78
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Disclaimer: None of this is financial advice. Please do your own diligence. The views expressed here and other Surf Reports are my own. Only risk what you can afford to lose in these crazy markets. Know your timeframes, parameters, and risk tolerance.
Position Disclosure: At the time of publication, I hold a decent sized position in SBSW (less than a 5% portfolio allocation), a much smaller position in Anglo American, and a very tiny speculative position in Clean Air Metals. I may initiate positions in others depending on what the waves do of course.
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These reports take a lot of time / effort. If you enjoy them, coffee or Kinesis KAG are greatly appreciated if you wish…
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https://platinuminvestment.com/news
https://criticalminerals.com/site/assets/files/3631/2023-03-01_stillwater_presentation_final.pdf
https://www.cleanairmetals.ca/news-media/news-releases/clean-air-metals-withdraws-mineral-resource-estima-122564/