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Morning all. We are pretty much guaranteed production of 50k tonnes per year in that timescale, between Roan Sable and the IRH deal. This is pretty spectacular in itself and will lead to many multiples of the current share price! Even allowing for only 42% of the IRH deal. However is it likely to stop there? I dont think so! With so many small scale licences targeted, there is very likely to be additional production there. The IRH deal is likely to have at least another 4 modules established. Plus any additional projects. So my base case in 50kt in 18 months, but the reality is likely to be much more. Pick a share price based on your chosen PE, but its going to be many multiples of ghe current price.
How long has it taken to build the Chrome business to 1.5 million tonnes? We don't know what that figure of $6k is for.... I have challenged Neal and Leon to clarify it already. We don't need to process tailings to get to 100Kt/an. Its what value an acquirer would ascribe to getting that production and then all of the future growth which a single mine would NOT give them .... That is where the value lies.
I was thinking more like 4 years for that figure Gray.
Gotreal
4k a year copper to 100k a year in 18 months to 2 years is a big leap of faith. We have been waiting 6 months for an electronic component. Plus the gross margins will be different for the different processes. It's not a case of £15k/ton revenue. $6k costs. $9k/ton gross profit.
For example IRH modules 30% to JLP after costs. The artisan miners costs is around $6k/ton. Just because Goldman say $15k/ton copper doesn't mean it has happened (doesn't mean it won't either). We don't even know the margins on tailings.
How you can forecast that kind of production and profit now is beyond me way too many variables before we get anywhere near that.
We aren't even producing anything from modules yet so what the actual margin turns out to be we don't know. We aren't producing anywhere near nameplate capacity with any artisan mining product at Roan or Sable yet so what that actual margin will be we don't know.
That's why I don't think it will be worth £3.5 billion in 18months to 2 years.
Nelson, I agree the market is awaiting the module to be in and functioning at Roan.
Not sure investors will need further evidence from Munkoyo (albeit that will be August so not long to wait).
I say this because the modular approach is working in SA on chrome with different materials being processed and will soon be up to 10+ modules.
Further catalysts for me will be in the tailings processing which becomes much more interesting at the higher copper prices as well as the Mopani dump, OB1, further small scale operators...
Not one for SP predictions but can see substantial growth from here off the back of a successful implementation at Roan.
ATB
Northern
Once we reach Chambishi Metals capacity we are good to go. We might be late to the party, but better late than never.
Once the modules are up and and running JLP can push out the process as far as they are able to with current resources. Setting up in new jurisdictions should not be a problem either and doubling capacity every year at least for the immediate future will see huge rises in profits. THAT is why I don't want to see a takeover any time soon. I'd actually quite like it if I would be getting a decent divi in a couple of years. I can't see Slater agreeing to an imminent takeover either unless he is at the very least going to get 50p or more.
I am saying that the investment needed from a standing start to be in a position in 10 - 15 years time to be able to produce what JLP will be able to produce in 18 months to 2 years is an estimated £3.5 billion. If you were going to invest, which would you put your money into given that it would start to pay back immediately in JLP. Therefore why wouldn't it be worth £3.5 billion in that time? Maybe you can explain?
Gotreal
Yes RBC.
My forecast was for next year anything after that it is really hard to say.
How long do you think it will take JLP to be a £3.5 billion company? Are you saying 18 months really?
I still think we are a couple of years early for takeover. People will want to see proof of the pudding - we have barely started the module model and we have Roan to showcase yet, if not another refining capacity after that.
The case for takeover, if copper remains on course for the supercycle being anticipated is strong - what would supercharge any appetite for takeovers once JLP is proven is whether finance or access to resource is a limiting factor to future expansion for JLP - if the answer to that is yes, then its easy to make a case from inside a cash loaded entity as to how you would accelerate the profits to be made.
Cmon Roan
Have to agree with you gotreal. All a bit mealy mouthed on here when it comes to estimating future earnings and sp. Too many hangups about past performance of a company that it no longer bears any resemblance to I think.
I'm sorry.... where have Berenberg sprung from?? It was RBC that was appointed recently.
As was pointed out on the other board recently it is estimated that it would require an investment of £3.5 billion to open a mine with a capacity of 100kt/an of copper. In 18 months JLP could be ready to produce 100kt/an of Copper plus Chrome plus PGMS.... not in the 10 - 15 years it would take to open a new mine. £3.5 billion would value us at over £1 per share and the acquirer would be getting production NOW not in 10 years time. As has recently been quoted, Goldman too are now forecasting $15,000 Copper, as I said..... people need to wake up to the REAL potential here and start investing accordingly.
Good morning everyone,
Hi Edzi,
What you have written all sounds very plausible to me so the berenberg angle you highlight could have legs.
You are spot on with the green credentials and cannot be underestimated. The big boys will take note of this.
JLP's operations are pretty much a "clean up as you go" which is extremely attractive not only to bigger companies but the governments and locals that have been affected. Get the Zambia operation running like the chrome operation and that will give JLP the financial ability to look at Congo and IRH may want to be involved in that.
Didn't know about Zimbabwe and any potential there so that is a new one for me.
And just for Ardbeggar
Cmon Roan:)
hi gray
i am not trying to fire off wild theories or start rapid posts regarding my initial views about berenberg, but other than wanting to try and get a wider market for the shares, why go there?
there is a reason for doing this because of the timing of everything ? i have said many times i worked in the arena of pr and marketing at a very high level and i think that this has been driven by ollie or even neal for a very good reason.
my thoughts are that because irh have been buying up very big assets in zambia, they need a quality management and research team to sweat the assets and if jlp can not only process rocks but also the more difficult **** heaps then they alone would be making about 150-200 million$ per year in the next 3 years, putting a bid in makes sense even if they claim back the 42% that jlp are going to make on the initial deal. there is also going to be consolidation in the mining sector and although jlp are a minnow, they are a very important one especially because of the green issues, if they can take them into other countries especially in the congo or even zimbabwe they would get a brilliant return on their investment in 5 or so years. it makes so much sense, even to take a 20% stake in jlp as that will make sure others don;t bid just my thoughts but i could be way off
It would be a shame Shuvlin we would all like to see full value we have waited long enough. The bigger fish will circle though if JLP becomes more attractive. Edzi does make an interesting couple of points. I am not saying it will happen you just never know even chrome is looking tasty.
A bit of speculation whilst it is quiet and we wait for Roan.
That would be a shame. 1 billion is just the start.
Edzi,
You are moving at a tangent with some of these. My speculative opinion to answer your questions for what they are worth:)
Had a conversation with Mikie the other day I don't think they need Chambisi with the chinese being short on concentrate at the moment and the price they can get for it.
Energy costs would have to be a big consideration even if they got it cheap. I would imagine it may need money spending on it to bring it into operation. You never know with Leon though:)
I think they would need to get the valuation of the company higher than what it is now if they were going for a full listing but that shouldn't be a problem if copper does the business not hard to see sp double from here with what is expected to be produced next financial year.
As for a takeover who knows. If someone was though they would be better off getting in now whilst it is cheap. I think Leon wants to grow it into a billion dollar company which would be around your 30p a share predators maybe lurking then. Copper will be attractive to them.
Hi Gray1
I would welcome your thoughts on the following:
Jlp have now appointed Berenden which is a great move but you do wonder with everything going on why!
If they wanted to buy Chambisi, would they need them, to me the answer is no as the money coming in on chrome
and copper for the next 2 years if you accept the Goldman theory about Copper prices, they to me are not needed.
Are they going for a full listing, or are they trying to get a good price for a take over. What are your thoughts Regards
Edzi,
Yes gone a bit quiet with Droslovka but Roan and the modules with IRH are taking preference it would seem. However it would be good to get improvements in the tailings processing.
Agree being conservative. I am always conservative and I would be disappointed if we don't hit $100 mill gross next year as a minimum.
The margin on chrome could be pivotal as well. I have it down as $30-$35/ton gross margin others have suggested it could be higher. I will be looking at the second half of this year chrome margin to see what it comes in at.
Gray1
Hi, I'm trying my best to be quite conservative with my numbers to tell you the truth.
Of course everything stands on the price of metals but if you believe what is being written, not only on Copper but on PGM's then the figures could be better. I am also trusting that the Chrome price will be roughly where it is now, however next year JLP should be producing much more chrome that will produce a better bottom line. It is interesting to hear that the Copper Oxide get's a premium price and I have no idea how much sulphide can be produced. I am also keen to hear what is going on with JLP and Gronovska, as that will not only create a new revenue stream but it will show the market that we can produce in an area that others struggle with. Keep the posts going it's always interesting to have a good conversation Regards
I agree with your numbers for next year Edzi. I have pgms and chrome on their own coming in at between $65 mill and $78 mill gross. Add in 12k of copper only at $3k gross margin and you have $100 mill gross profit minimum.
JLP have put everything in place just need to deliver on copper the other two are pretty much established and chrome still growing.
heroric
i don't know what your stressing about, although our copper production is very low, we are producing. so saying we're not producing is going to get you some flak as your statement is not true. we also are at the tipping point of producing and copper if you believe goldman and others is going to go from strength to strength. it is apparently over 10k now and going higher so we or rather jlp through loads of **** ups have timed it perfectly. if in the next f/y we produce 10k of oxide copper on our own and 6k of copper with irh on top of chrome and pgm's together with sulphide copper.
you are talking about a gross profit well over $100m. then the following year you could double that. if you look at that scenario then jlp would be worth over 30p per share if it was sold. is this the reason why they have got a new broker ?
or is it because of chambisi? why would they need a new broker for chambisi? or is it a full float which should or would be very sensible.
I don't think copper price is anywhere near "bubble like" Heroric. We are nowhere near the top and that might well not come until 2025 so plenty of time to take advantage of the rise.
I think the Roast boys seemed to confuse/conflate a couple of the JLP projects during their brief discussions on the Sunday episode. Certainly sounds like they went to the s**g project at Mufulira which is good as we should be expecting some news on the development plan shortly!
Looking forward to the Zambia special as well as should give some broader context to the region and mining activities.
ATB
Northern
I agree Heroric the benefit of higher price of copper producing 1k tonnes per month is far better than 300 tonnes per month for JLP to take advantage of but that isn't how your original post came across stating producing no copper and that triggered some of the more robust responses to you.
Anyway just for Ardbeggar
Cmon Roan.