Glimmer of hope
Lonmin reported a decent trading update that saw the stock surge some 35% for the week. The costs are now actually below the miner’s cost guidance, but unfortunately the price it is receiving is still below its cost of production. The company needs a weaker rand or higher platinum price, which are both beyond its control and unlikely to happen in the short term. Importantly, its net cash improved markedly but it remains on the edge. The bottom line is that this is a better-than-expected update that offers a glimmer of hope. But I still do not like the sector in general and this stock in particular.