Racing: Two (White) Metals – thomcalandra.com

Platinum Chases Palladium

And Vice-Versa

Russia Sanctions Look To Benefit Both Metals

Frank Hallam of South 
Africa developer Platinum 
Group Metals PTM PLG 
weighs in re: platinum 
vs. palladium characteristics.

Plus: Ivanhoe Mines IVN IVPAF.  
See latest quarter financials.

Palladium’s burst higher comes in the wake of possible G7 group sanctions on Russia.

[TCRs, platinum this week thus far is outgaining palladium percentage wise. SEE FUTURES PRICE AND CHART.]

I own sister metal platinum via Aberdeen‘s PPLT and via Ivanhoe Mines’ Platreef project. Platreef contains large economic reserves of palladium, platinum, gold, rhodium, copper, nickel, osmium and other metals.

SEE BELOW: Ivanhoe and Platinum Group Metals (both South Africa) tags.

It was palladium that made moves last week, sparked by Russia sanctions reports.

Palladium trust vs. platinum one (both Aberdeen) across 3 months. Platinum in blue.

The Aberdeen Palladium Trust is PALL. Those shares are benefiting from the sanctions talk. The PPLT platinum trust is still holding its outsized gains of the past two months.

I believe platinum will benefit from tighter palladium supplies. Both are used in different ways in vehicles’ catalytic converters for clean (or cleaner) exhausts.

Frank Hallam at Platinum Group Metals, which is developing a mine in the same South Africa region as Ivanhoe’s Platreef, in part fortified my belief.

Here he is verbatim. [I have owned PLG PTM on and off since 2003 (really). I sold a small stake last year for an equally small profit. Platinum Group Metals shares, worth $207 million USD, rose 10% the other day (Friday) and trade at their richest level since March 2022.]

“Pt and Pd are generally interchangeable in auto catalytic converters. That said, it isn’t a perfect switch and the amount of each metal required for the same emissions control result varies. Pt is better for diesel and Pd is better for gasoline (not diesel).” — Frank Hallam, Platinum Group Metals

He continues, “They also have slightly different ‘best’ operating temperatures. The optimum mix is generally a three-way catalyst with Pd, Pt and rhodium. Depending on the application, economics, and emissions requirements, you can vary the mix ratio for best performance and cost.

“As for the possibility of sanctions on Russian PGMs, we have speculated on when that might occur. It remains to be seen if it will happen. For those end-users who are complying with sanctions and reporting their usage, I believe sanctions would tighten available supply.”

The caveat, TCRs: “Knowing the source of your PGMs is not always easy; some metal would likely find its way to market through countries such as China or India. It may be that the Russians simply focus on sales to those countries, who will buy their PGMs despite sanctions,” Frank Hallam says.

“The rest of the world buys from everyone else. In the long run, sanctions will have a tightening effect on markets, and palladium prices will be somewhat higher, but it also seems unlikely that Russian metal will be absent from the marketplace.”

PLG PTM is worth a look; it’s a fraction of the market cap of Ivanhoe Mines yet with a Saudi Arabia smelter pact proceeding. I do not own it.

Kamoa’s ore conveyor (from underground t surface) — Ivanhoe Mines

I like the idea of a multi-metals platinum-palladium group metals producer (Platreef by 2025) in Ivanhoe Mines — a mine that founder Robert Friedland just reminded me will produce the platinum group metals, including nickel … and copper, gold, rhodium, osmium. See description.

Robert says the Platreef Project is on track to become one of the world’s largest, lowest-cost producers of palladium, platinum, rhodium, nickel, copper and gold. See latest quarter financials out this week.

IVN IVPAF is our largest natural resources stake and owned since 2003 (as a private company). Ivanhoe Mines also has the vast, producing Kamoa-Kakula copper mine and the Kipushi zinc mine, both in DRC Congo.

Xtra-Gold Resources XTG XTGRF is our other large and lengthy-hold stake; it is also in Africa — Ghana. SEE LATEST QUARTER, net income USD $1.46 million.

— Thom Calandra [TCRs, this is likely the only report for this week. I am starting to add weight to my Halloween skeleton frame.]

Thom Calandra is a writer and an investor. Research and material are meant as editorial opinion. He is not a professional investment adviser. Please do not consider his reporting as a recommendation to buy or sell securities.

thomcalandra.com