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There is a significant delayed cash flow from the PGM production. Final pricing is not determined until 4 months after the month of production and cash is paid shortly after that is my understanding. Shortly after the end of January Jubilee will receive the revenue for the September production of PGMs, the start of the production from Windsor. The huge ramp up in production at Windsor and now at Inyoni, is requiring a large amount of working capital and to my mind is a significant contributory for the placing last November. However the timing of receiving the cash from Windsor though could not be better as it will benefit from the huge increase in PGM prices this month.
Jubilee as usual has produced an RNS with more questions than answers. Why the hell they cannot be more straightforward is beyond me. Anyway for what it is worth, I believe that December was a very poor PGM production month at both Inyoni and Windsor for the following reasons 1. The winding down to Xmas and the Xmas break itself would knock about a third off a months production 2. Although not mentioned there were probably issues with power outages. 3 . A new improved feed system was being installed at Inyoni which must have disrupted production unless all done in the Xmas break 4. A bottleneck issue was resolved for the huge increased feed rate at Windsor PGMs which presumably disrupted production. With the operational issues for the higher level feed rates now resolved, we can probably look forward to a bumper half year of PGM earnings provided there s not a collapse in PGM basket prices and there are no significant power outages. Maintenance of the current PGM prices could lead to PGM earnings of more than £16m over the next six months, double that reported for the first half.
Billy, I'm pretty sure there's a substantial time lag between production and sales/ revenue recognition. We really need a CFO with a bit of industry credibility appointed here, we're all pi****g in the wind when it comes to trying to understand the numbers.
and considering we have a current mkt cap of 86 M - I would be ecstatic if we could reach 5p. God alone knows where fantastical predictions of 40p come from (over on advfn previously). It seems the tailings business is capital intensive and growth is slow and painful whilst vulnerable to commodity cycles.
I’m quite comfortable here. 2020 looks like 2x£8m for PGM, £16m allowing for the basket price increase (30%+) meaning £21m+less central costs £8m means £13m+Copper (Unknown). Using P/E 9 from last year means a MC of £100m+! The market just needs to wake up!
Edzi, If you're comparing 2019 results to H1 2020 then you also need to take into account the operating expenses (overheads and depreciation) of £8m. So, assuming another £8m for this year then the comparison is £10m last year (7m less £5m exceptionals + £8m ohds/depn) v £8m for H1 this year. Or £2m last year v £4m H1 this year.
Am I right in thinking that JLP cannot state profits unless the PGM's or Chrome are actually sold, I think that there is a time lag with this so maybe this is why the figures although they are good are not what people are expecting. You also have to remember that last year's figures included a £5million exceptional so really the Company made £2 million last year and £8 million in the following 6 months. The deal with Eland in 80/20%
One would assume that Eland's cut is reflected in our earnings £, and not the production quantity.
It would be so easy for them to produce a monthly table of production, revenue, costs and earnings for both the operations. That way we wouldn't be wasting our time trying to work things out for ourselves the whole time
Looking at the RNS it does state quite clearly that Windsor produced 5,337 ounces in September, which, as you say, doesn't stack up to the 21k total for the period.
The below is an extract from the ye RNS "This jump in earnings reflects only one full month of production at the Windsor PGM Operations, which commenced operations in late August 2019 and exceeded expectations by delivering 5 337 PGM ounces for the month of September 2019 alone, which is more than double that of the PGM ounces produced from the Inyoni Operations"
Assuming 2,250 per month for Inyoni, that gives an assumed 13,500 for six months.
21,082 less 13,500 gives 7,582 for Windsor for Sept, Oct, Nov, Dec combined.
Bearing in mind the comments regarding Sept PGM in RNS 14th Nov and Nov PGM in today's RNS, something does not add up??????? If Inyoni is producing 2,250 per month then Windsor cannot be producing the sort of figures that seem to be suggested for Sept and Nov unless Windsor only produces a total of 2,082 for combined Oct and Dec production.
To be perfectly honest, I am disappointed with the PGM ounces delivered. For the period 1st July to 31st Dec, 21,082 PGM ounces were "delivered" which I assume means produced.
Working on Inyoni producing 2,250 oz per month (I was actually expecting an increase for Dec to reflect we were now in full control of the processing from the RNS in Nov), that would give 13,500 oz for the six month period without allowing for any Dec increase.
I have obviously misunderstood the wording of the 14th Nov RNS and thinking Windsor had produced 5,000 PGM oz in September alone. Having reread this RNS it is apparent the TOTAL COMBINED PGM from Inyoni AND Windsor must have been 5,000 oz in September. So by deduction, it would appear that Windsor must have accounted for approx. 2,750 oz in Sept.
We are told in today's RNS that...... Windsor PGM Operations, came into operation during August 2019 reaching stable production exceeding 5 000 PGM ounces produced for the month of November 2019 alone....... again, I read this to mean that Windsor had itself produced 5,000 PGM oz. However, I assume that this means that TOTAL COMBINED PGM from Inyoni AND Windsor was 5,000 oz.
Taking a total 21,082 and an expected 13,500 from Inyoni that leaves 7,582 from Windsor for the period. The above Sept and Nov figures indicate Windsor to be approx. 5,500 oz which only leaves a total balance of 2,082 oz for Windsor for combined Oct and Dec which obviously seems very strange when compared to Sept and Nov.
Alternatively, PGM production at Inyoni has been well below the anticipated 2,250 per month????????
Again, today's RNS states....Combined PGM processing capacity expanded 3 fold to 170 000 tonnes per month targeting 6,000 PGM ounces per month. So if Inyoni is targeting approx. 2,500 to 2,750 oz per month from Dec then Windsor must be targeting approx. 3,500 to 3,250 oz per month going forward.
So basically, I am struggling to understand the make up of the 21,082 PGM ox for the six month ended 31st Dec.