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Hi Jammer!
Thanks for the informative and insightful reply - it is much appreciated.
I think your analysis may be right.
As a JLP shareholder I appreciate that they are proceeding with caution through this regulatory minefield. But why on earth did LC and CB ever agree to such a deal in the first place? It's been two years since they massively diluted their shareholders to pay for Kabwe, and there is nothing to show for it so far, and it's not certain there ever will be anything to show for it.
If I were a BMR shareholder, I'd just be feeling frustrated that time is passing, and very little progress is being made.
TBTT. In my opinion this is what is going on. The small scale licence which enables the recovery of metals from the Kabwe tailings is held by Enviro Processing Ltd, a Zambian registered company (EPL). Jubilee holds an option, at its sole election, to acquire 100% of the issued shares of Enviro Mining Limited (“EML”), a subsidiary of BMR and the company that owns BMR’s Enviro Processing Limited (“EPL”). I believe the large scale licence is also held by EPL. Jubilee do not want anything to do with the large scale licence as it carries requirements to meet the environment regulations, particularly when it comes to the decommissioning of the site at the end of the licence, which I believe is 2033. In BMRs accounts at end of 2018 there was a provision for decommissioning of over £300,000. Whether that was adequate enough is a complete unknown, but the environmental regulations are likely to become tougher so it would be no surprise if it was an underestimate. Jubilee will not want such a growing provision liability in their own accounts. The only way Jubilee can definitely avoid this to ensure Galileo have taken it on before they exercise their option.
Jubilee will not want to overcommit to the tailings project before the conditions of the small scale licence renewal from October have been determined and it can be put under their control (through the exercise their option). Jubilee will not want to be effectively having to keep BMR afloat any longer, which they have in effect done through the liquidity of their 30% investment to maintain the small scale licence in existence. Once again the environmental requirements for decommissioning and returning the tailings land to alternate use of a renewed small scale licence are probably still under negotiation. It appears Jubilee has minimised risk should they need to pull out of the tailings project. So far they appear to have only 100% committed to the zinc processing facility which will be within the Sable refinery and available for 3rd party ore processing. They appear to be leaving the development of the facility to enhance the metal grade in the tailings before transporting the material to Sable as late as possible. This facility will be a turn key building which probably can easily be taken down and reassembled on another site should the worst happen. They have probably already started work on the tailings to improve safety and reduce environment hazard when they start to move the tailings. Costs associated with this could be lost. So my expectation is that by June Jubilee will be in a position to start commissioning the zinc circuit with the tailings and able to say to the Zambian authorities they have met their side of the deal, but now over to them regarding the renewal of the small scale licence on acceptable commercial terms if they really want the toxic Kabwe tailings dump sorted.
Can't be from Kabwe tailings cos Bozzerelli insisted when he took over the reins that the whole copper thing had been an Alikhani lie.
That's when zinc and lead came to the fore.
TBTT
You are probably right. It says that the copper comes from tailing rather than "the" TAILINGS.
Hi Jammer!
I agree with the facts that you've laid out.
I'm just not so sure about your conclusion. Surely the best thing JLP could do to secure the small licence extension is actually process some tailings?!? We know the Zambian authorities are looking to take away unused mining licences - and indeed have done so in several instances.
And why should Galileo's applications for a small scale licence for Star Zinc and the renewal of the large scale licence have any bearing on Jubilee and the tailings.
I wonder if the hold up isn't that any company applying to hold a small scale licence must have 50% Zambian shareholders. Just a speculation.
I understand the hurt and anger of BMR shareholders. But the fact is if JLP had not invested in BMR the company would probably already gone bust.by now. JLP hold all the cards and without them BMR shareholders would have no hope of getting anything. Being angry and insulting to JLPs directors is not too clever.
JLP,s majority stake in the Kabwe JV company, and their right to exercise a purchase of the subsidiary company that holds the small scale licence, ensures they have in effect full control of the Kabwe tailings project. In effect BMR now has no real say in it. And this project is the only source of potential revenue for BMR. Not a good position to be in.
On top of that JLP also owns 30% of BMR, which although a minority shareholding , in practice it provides JLP with the power to influence what ultimately happens to BMR.
I have a small BMR shareholding, which I speculatively picked up after JLP invested in BMR and obtained adjust under a 30% stake. I post mainly on the JLP board and have previously set out the number of regulatory hurdles that JLP need to go through before they can eventually get the small scale licence fully under their own control. JLPs aim is
1. To secure the small scale licence without the large scale licence, which Galileo want to secure and
2. Ensure the small scale licence can be renewed for at least 10 years from this Autumn when the current small scale licence runs out.
The above is complicated by Galileo’s involvement. And I suspect this may be where the stumbling block is., and where regulatory delays are arising. Galileo needs a small scale mining licence for the Star Zinc project, and until that is secured along with the zinc ore deal with JLP, Galileo has no obvious means of near term funds for the exploration of Kis Hitu within the long term licence,. I would imagine such funding certainty would be a condition of the long term licence being transferred to Galileo. I hope from JLPs and BMRs perspective this is the case, and nothing more sinister is going on.
Hi Rosewall!
The copper produced at Sable comes from a different source - apparently from some material stored on the refinery site and forgotten about by Glencore.
Not an ounce of the Kabwe mine tailings (i.e. the zinc, lead, vanadium rich material covered by the small licence) has been processed; even though it is now more than 2 years since the original deal. I don't have firm proof, but my intuition says that there is some major legal or administrative problem which is not being disclosed to its shareholders by JLP.
Do JLP/BMR still have the small licence? Have ZEMA interfered? Is there legal action pending?
Fellowship,
Jubilee came after the BMR BoD drove the company into the ground.
BMR was already a basket case, with no hope of survival, long before Jubilee arrive. You have a very selective memory.
TBTT
What do you mean by "not an ounce of tailings have been processed"?
https://www.thisismoney.co.uk/money/investing/article-8066181/SMALL-CAP-SHARE-IDEAS-Jubilee-Metals-cashflow-opportunities-multiply.html dated 2nd March 2020.
It appears that 110 tonnes of copper has been produced.
Hi Bring!
I think you may be missing the obvious here.
It is now 2 years since the first deal between JLP and BMR. Not an ounce of tailings from Kabwe has yet been processed.
Why is this?
I think it's fair now to ask if the Kabwe tailings will ever be processed and monetised. (In their communications, Jubilee are constantly downplaying the Kabwe tailings, speaking of refining copper and cobalt at Sable, and buying in zinc ore from 3rd parties, and putting off the construction of the lead and vanadium circuits, etc.)
Reading between the lines, I make it that there must be serious, perhaps insuperable, undisclosed legal / administrative problems with processing the Kabwe dumps material. Perhaps ZEMA, perhaps something else.
Perhaps we have it all back to front? Rather than Jubilee "preying" on BMR, perhaps Alex Borelli sold Colin Bird a worthless pup?
Exactly, aim-sickness – what price? This is one of the reasons why shareholders were reluctant to vote for the listing and share dilution. Colin Bird was also on the phone making proposals of dividends for BMR shareholders. It turned out to be a load of rubbish. JLP hadn’t even triggered the Royalty, so why should we vote blindly not knowing the true outcome?
Now according to some, BMR Watch is to blame for BMR not having a listing. Borrelli told me he wouldn’t be able to list the Company until JLP had finalised certain details, and BMR had to amend its accounting period – so how exactly was he planning to list us last year then? I believe the situation at the AGM with CB on the phone was staged, and they were hoping we would ask for the GM to be adjourned. Now they are just waiting patiently for BMR to go bust so they can pick up what they need on the cheap… How else do you explain a 7 month period of absolute silence from BMR? JLP are dragging this out, even to the point where they are purposefully withholding money from the Company they own 29.01% of - this is immoral at best.
Disclaimer: All of the above is in my opinion, of course.
Borrelli said to bmrwatch that your group rejected the proposals and jubilee rejected thereafter therefore the meeting was adjourned. Clearly one of you is incorrect. I will make it clear once again. Jubilee and borrelli are guilty of where we are. My point is you played into there hands by going down the route of an egm to remove borrelli. Bmr need to relist however i fear bmrwatch have miscalculated your actions on our future.
What's the point in BMR Watch getting updates anyway? According to you I was lied to by the board. Are you some how suggesting our actions are the root cause of the problems we face? It's BMR and JLP that are causing the problems, they don't need us to intervene, although they might use it as an excuse for nothing happening.
By the way, shareholders didn't vote down the proposals of a listing. The GM was adjourned by AB when everyone in the room was in agreement to. So we didn't get chance to vote.
According to Borrelli we were supposed to list by end of March, can't see that happening now. Maybe some time this year?
Bringmyreward
The BMRWatch played right into Borrellis and Jubilee hand by going for an EGM and to removing borrelli. Borrelli now refuses to communicate with your Group this has allowed him to go into a deeper secrecy with colin bird. Bird can smell the weakness into borrellis position now and imo will crush bmr furthur. Bmr need to relist asap as this is only going one way.
Sorry Bring, silly me, I was thinking of the real royalty, the one intended for the business rather than the BoD's salaries.
Bring - whatever the reason, if we had a CEO who was remotely interested in protecting his loyal shareholder base, he would have been asking searching questions of JLP and updating us. But then .........
One might be tempted to ask the question "What's in it for him to sit on his 'arris seemingly doing diddly squat. What bigger incentive to get things sorted, than all those millions of share options he's awarded himself.
Then again how many times have we seen with other companies where directors scrap previous options in favour of better ones. Sorry, do I sound bitter???
"But not for some time to come. There is the question of recouping JLP's capital costs."
Actually, BMR are supposed to get an initial 5% Royalty from the earnings before JLP recovers its costs. This deal isn't in place yet, because JLP still hasn't acquired EML from BMR to trigger the Royalty. I'm assuming at this rate they are just waiting for BMR to go bust or coming up with new plans to further weaken our position. How ethical of them.
" Important questions because this will determine how much we are owed in Royalties."
But not for some time to come. There is the question of recouping JLP's capital costs. I reckon that the bill has gone up markedly not least of all because of, in the absence of any technical expertise at BMR, "consultancy costs".
It sounds like JLP are getting ready to treat tailings from Kabwe to produce Zinc, they will also mix ore to this from third party providers. This certainly complicates the situation for BMR shareholders. How much ore goes in from Kabwe and how much Zinc is produced? Important questions because this will determine how much we are owed in Royalties.
It’s going to be very easy for them to mislead us on this. I have a feeling the same will happen with the Vanadium and Lead. They will start mixing in ore from all over Africa to produce 4 or 5 types of metals. The easiest way around this would be to pay us a fixed Royalty sum on everything that comes out of Sable. I can’t see that happening though, so perhaps shareholder action is appropriate.
Go back a couple of years and look at the forst deal with jubilee. Fast forward and look where we are now. This is not just borrellis making this is mainly down to bird/coetzer the untrustworthy sly foxes who smell weakness like a hyena and start changing the deal. No borrelli and hawke are culpible but bird and coetzer are that smelly stuff sometimes you step in
Re " I loathe borreli but i hate bird/coatzer even more."
On the contrary, they are actually doing a good job, but for their own shareholders (of whom I am one). I am also a hugely out of pocket BMR shareholder but I certainly don't blame B and C for our demise. They don't work for us. The blame lies full square at the feet of the useless and conniving Borrelli. If his record is his idea of how to protect BMR shareholders, then we need to rewrite the OED definition of protect.
Kabwe is cursed. There have always been third parties that do not want to see Kabwe processing Zinc and Lead. Even after 2 years Jubilee are not processing and zinc or lead. Bear in mind Bmr lost there license through inactivity. It would appear Jubilee are following suit. Bmr have been screwed over by Jubilee bord/coetzer . I do not believe however you get properly screwed over without a willing party. This gives me great cause for concern from a bmr shareholder view. Yes there was a deal last year on the table which was voted down. My fear now is that jubilee will finish bmr off now with a long drawn out process which we have witnessed recently. The Royalty imo is worth nothing at this point of time. The value was in the licenses plant and area. This however has been given away with ease. Bird/coetzer are cunning greedy bad people. It so happens borrelli is in the same mould . Time is moving on and this increasingly looks like the final phase of bmrs demise. I have always said jubilee will not allow bmr to get any value out of the royalty. Jubilee would much prefer we were long gone and they can take that royalty for peanuts. This will be the final nail in the coffin and im sure every bmr shareholder will think that this has been the plan all the time. I loathe borreli but i hate bird/coatzer even more.
Hi Rosewall!
Let's assume that what BMR has written is true, and that JLP owe BMR money and have done so for a long time.
The question I then ask is, why?
JLP have cash and they could pay BMR if they wanted to, of course. So it's not that they're skint.
Rather, I infer that JLP are withholding the money because something is wrong with the Kabwe deal. That chimes with the increased emphasis they are placing in processing "outside" 3rd party material at Sable. And it would explain their total news blackout about Kabwe recently.
I'd suggest that either the Kabwe licence is in question again, or there is some legal challenge to the whole deal, or an injunction, or something like that.
I'm not sure yet, but I have an inkling this whole Kabwe business is turning into an unholy mess - for both companies.
Certainly, if JLP can't process the Kabwe tailings then the royalty is worth nothing.
"Apparently JLP owes BMR money"
Apparently? Please expand.