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Yep, missed that Billy. 10kt it is.
What is the expectations around admin costs?
Morning Seis,
Thanks for you continued input, appreciated.
As regards the chrome and copper offsetting....
They are clearly using the chrome revenue credit to offset production costs for PGM. I can understand this as chrome has always been considered a "facilitator" to the PGM.
However, I am surprised the cobalt has been offset against copper. Surely that is not going to be the position going forward. I was expecting a "significant" cobalt revenue (and earnings) in its own right rather than this stated "offsetting".
I am using today's RNS to begin my list of questions to raise at the AGM. This offsetting (especially cobalt) is question number one...
BB2,
Thanks DRB83, yes I’ll take a good look through the latest numbers and come up with revised numbers later. It’s slightly confusing that they are choosing to use chrome and cobalt to offset PGM and copper production costs but I will adjust my sheet to show the same thing.
Yes slightly disappointing that the Roan ramp up is still ongoing but this is the first time they have done this and it’s obviously taking longer than anticipated. They were at 65% in mid July, 80% by first week of August, so I would anticipate the ramp up should be close to design capacity by mid September. Leon says copper production is expected to accelerate in H2 so for the time being I will stick with his forecast of 10,000 tonnes for the year (down from 12,000 due to late start up).
As Leon says, they plan the cobalt start up once they have fully ramped up copper, to ensure a stable feed. I’m not expecting a huge amount of cobalt production in this half if that’s the case. I wasn’t assuming zero production costs on cobalt, just waiting on confirmation on what they are. Again will need to peruse the numbers more fully.
DRB,
The RNS states...
The Southern Copper Refining Strategy targets to produce 3 700 tonnes of copper within the first half of FY2023 ramping up to target 10 000 tonnes of copper for the full FY2023 year. If achieved this equates to a 284% increase in copper output..
So H1 2023 copper target confirmed as 3,700
but also FY 2023 copper target confirmed as 10,000 (your assumption of 9,000 is close but actual confirmed target is 10,000.
BB2
Seis, I'm relatively new here. Your calcs are helpful and it would be good to see your revised numbers following this morning's update.
You got the PGM profit per ounce spot on except the actuals included the Chrome credit. I think your PGM forecast of $57m is achievable but including the Chrome for FY23.
I don't think copper will max out like you have forecast. The target is 3700t in H1 so I'm assuming 9000 FY. Based on what £4k per tonne earnings $36m could be achieved best case.
Not sure if it's prudent to assume zero production costs on Cobalt. Also, it's clear that production hasn't started yet so target tonnes could be significantly reduced. Say 500k tonnes at $40k PT earnings puts it at $20m for FY23.
Therefore total operational earnings forecast for FY23 is
PGM $57m
Copper $36m
Cobalt $20m
Total $113m
But I'd be interested to see your revised numbers.
I got those production cost figures from the company update on 16th May, in the ‘further information’ section:
“ The increased throughput and production rates of the integrated Inyoni Facility has the added benefit of further dilution of cost to cushion the current inflationary pressure on operating costs. Cost per PGM ounce produced excluding transport cost is US$ 669 (transport cost currently US$198 per PGM ounce) and when fully accounting for the chrome by-product production credits results in an effective cost per PGM ounce produced of below US$ 450 (excluding transport cost). Jubilee's targeted eastern limb PGM expansion strategy will significantly reduce transport cost of feed material from this region while expanding overall PGM production. Jubilee is in advanced discussions to secure an existing mothballed PGM processing footprint capable of being repurposed by Jubilee.”
I seemed to have provoked a few replies on the topic since i posted the question this morning. Thanks.
It seems that the consensus is that nearly all of the cobalt stream will be profit; hopefully that will be the case but it seems that there is not a lot of hard evidence to support this. I guess time will tell!
Seis, please can you clarify the 669 cost per ounce. I have $450 if you exclude the transport costs from east plats. ( which you haven't included) as you explained.
Also I think we could possibly see 14 000 tons of copper if not more.
Here is my calculation for the full year 2023 earnings based on current prices. If you see anything that you think is incorrect then please let me know and I’ll check it. I’ll update again once we have further info from Leon, this is just a sanity check to avoid any glaring errors!
https://tinyurl.com/2f9u996a
I haven’t included anything for PGM’s from the Eastern Limb in the final numbers but you can see that for every 1,000 ounces from that feed source we could add roughly US$270,000. Once we know the actual breakdown I’ll add that.
For Cobalt, I have not included any production costs. There will be some associated costs even if we expect them to be minimal. From what I understand, the cobalt is precipitated out of solution as cobalt hydroxide and that is the final product, for which we receive 80% (according to WHI) of the price for the contained cobalt. I’ve made that assumption in my calculations.
Happy,
That comment (if accurate as I have not seen it personally) does not mean we will receive the full price. Should we receive 80% (again if accurate as I have not seen that stated directly by JLP) then obviously the higher the full price, the better.
I personally prefer to await confirmation by LC of the % price we will receive (and obviously the costs to produce it).
Just conscious that over misplaced expectations can lead to disappointment.
BB2.
Regarding the cobalt grade, I assume it's the highest quality only because in an interview with Leon not to long ago when Cobalt was $ 80 000 a ton, Leon actually mentioned something along the lines " with Cobalt at 80 000 you can only imagine the profits"
So I guess we producing only the highest quality!
From the WHI research note:
“ We believe that Jubilee will receive 80% of the cobalt price for the contained cobalt in the cobalt hydroxide.”
I wrote to the company a while back to try and get clarification on that but response was there none!
Just wanted to put out a question after the Cobalt excitement. Thought we were producing some lower form of Cobalt due to process which sells for less than the $50k? Tried to find the form on their website to no avail. Can anyone shed any light?
i have moved up to strong buy, agree that if they can put some cobalt numbers on top of the copper then we could be in for a very good run up tom the end pf the year and beyond, regardless of commodity prices (assuming no armageddon). The clues for me are the increase in SM posts which I suspect are being driven by Ollie. He will want to put his mark on this so I believe we are slightly delayed on the update so all the information we are usually searching for will be there to see. It really is a very exciting time to hold JLP...
Cobalt profits - Sometimes you need to have the calculations handy to determine the likely impact on share price etc. here however, we are talking about what multiple of current profit this will extend profits by - ie it’s a big big number at a big big margin level. As such I haven’t carried out the workings. When we are at 50p a share I may review that view but for now - Lao big that I have to dial down my expectations in order to not become obsessed.
Gla
NtD
I think lets wait for information which hopefully will arrive soon before making any calculations.
I will have a go with my calculations once I have received more information
You and Billy are welcome to show your working outs to be scrutinised on this board. 150 seems lean to me. Show me how you worked that out??
My calculations are also for the whole suite of metals. Perhaps you can provide details as requested earlier by Billy and we can see how you arrive at that number?
My 200 million per annum is for the entire suite of metals and I'm been very very conservative.
I would say US$200 million is a massive over estimate based on current prices. Even if we achieve close to the design capacity of 1200 tonnes/annum of cobalt (which is an unknown right now) I would put the figure at closer to US$150 million. Is there any point in trying to forecast that far in advance though really? In the short term we don’t know what is going to happen with metals prices. In the longer term we know prices are almost certain to increase substantially as supply is squeezed and demand increases… that can only be a good thing for JLP and its shareholders.
200millions
I bloody hope its more than $200k .... ;) $200,000k ....yes!
Happy,
Can you detail the breakdown of your $200k profit forecast, please. Interested in your calculations....
BB2
Quite amazing to think this time next year we should be reporting + - $200 000 000 profit (at current prices) . That's 3 billion rand roughly. The market really hasn't come to grips with this imo otherwise the share price would be triple. Really hoping for a solid well written report so that there will be no questions asked and we can see the true reflection in share price.
It has been said that there is almost no cost associated with producing Cobalt as it is built into the copper circuit. So fair to asssume that $50mill+ to be bottom line at today's prices. Of course it may retest $80k/t ...who knows?