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If I recall correctly, Leon indicated in the interview on mineprophets with TW that dividends would be on the agenda once projet elephant came on stream in two years time, which is probably during the 2022/23 accounting year.
I don't recall LC ever giving a time frame for when dividends would start to be paid. A lot has happened in the past 3 years. Back then we only had DCM and Hernic, we didn't have Windsor, Kabwe/Sable and the copper projects. In addition, the scope of the DCM and Hernic projects has changed in those 3 years, Hernic in particular, which required cash to be spent to secure a more profitable project overall.
Had LC used earnings from Hernic to pay out dividends instead of expansion, those dividends would have been tiny and not very long lived, with no prospect of future increases.
Instead we've now got a much bigger company with a lot more prospect of creating sustained earnings growth for a long period of time. Seems like the better approach to me.
How do you want them to retain profit and maximise earnings at the same time?
If you want jam today then don’t invest in a company that only recently started turning a profit
Hi Jonah
Yes Jonah glaring omission on my part :))
Cobalt yesterday was $33,200 per ton but down from its 2018 high of $100,000.
For the Uk to meet its zero carbon deadline of 2050 it will take all of the worlds cobalt production.
The Congo is the worlds largest producer of cobalt at 60% and controlling interest mainly Chinese. All the major tech stocks are being pressured to use a more sustainable resource to stop the child labour involved, so that could put more emphasis on the Sable Refinery
I would hope for more precious metals such as molybdenum, lanthanum and cerium but complex to process
Bamps. You omitted to mention cobalt, which commonly occurs in copper containing ores and is currently in short supply. It is no coincidence that JLP have already commissioned a cobalt circuit at Sable.
Thanks aw and moneyhawk
That's made it a lot clearer for me.
There doesn't seem to be a lot of info of what other minerals will be coming out of the refining process, I can't see any sampling results on the tailings.
Copper concentrate from ore normally contains about 30% copper and the rest being gold, silver, iron, nickel and loads of other minerals.
There must be an add on value to the copper as well from these minerals.
One additional cost for the joint venture is the waste/tailings produced while making the concentrate and also land reinstatement or this down to Jlp
I never understand why people keep complaining about a lack of dividends on a junior AIM company. Very few on AIM do pay dividends, there's better placing to put your money if earning dividends is your investment objective.
If we get to the Midcap status aimed for, then dividends will most likely be necessary to maintain that status. But at that point, the SP will be a lot higher than it is today.
If we extrapolate this to the 24,000 tons pa when project elephant is up and going then we are looking at $6,450 x 24,000 x 38% = $59m, plus the $30m from PGMs Is an operating profit of $90m pa plus then the zinc, lead and vanadium at sable, this becomes a substantial future cash flow. Yes I know that it’s jam tomorrow, but it does actually look like it’s happening this time.
Goods new, that's another question answered - where will the copper be coming from for the ramp up at Sable. But possibly the most significant news in this is that it'll cost us $15m over 12 months, and the indication is that we'll be using cash plus borrowing against future earnings. It is very possible for this to happen now. Although we have heard that before, and not always been completely the case. Hopefully LC is keeping CB locked in a box for a while until his excitement subsides, lol
Bamps and aw - The 35% profit margin isn't so straight forward. The margin that's been quoted is for processing our own tailings and not buying material to process, which will most likely involve turning the tailings into copper concentrate and then refining. We don't have a breakdown for the costs of each part, but I previously worked out our total cost per tonne refined to be about $3,700. Its difficult to estimate what our margin will be on material we're buying to refine, but I'd hazard a guess it'll be less than 35% as I'd expect refining to be the most costly part of the process. However, it does also give us an extra source of earnings from selling the concentrate to other parties as well with any excess produced at Sable doesn't need.
WH Ireland note : Under the agreement with a private Zambia company, Jubilee will construct a new upgrade facility on a Brownfield site with a 600kt/a throughput capacity at a cost of $15m – to be funded from cash and debt utilising Jubilee’s strong balance sheet. The material from Project “Roan” will be sold on an arm’s length basis to Sable using standard and conventional payment terms. The new material will enable Jubilee to increase production at Sable and to reduce its operating cost to $4,000/t copper. At a current copper price of ~$6350/t copper and a stated aim of getting to 10kt/a copper this would generate a Gross Operating Profit of $23.5m from Zambia alone. This is before we factor in other third-party material
to take us to the Sable plant capacity of ~14kt/a copper cathode; before we factor
in the start of zinc-lead-(vanadium) production from Kabwe tailings; and before
we consider an expansion at Sable copper to 25kt/a to take advantage of the
previously (18/06/2020) announced Project “Elephant” copper material in the
future. Zambia is the growth engine for Jubilee over the next couple of years.
Bamps, it states that JV will sell to sable at 38% of copper price ie ~$2,432, and that the all in cost to sable is $4,000, so the cost to process would be 4,000 - 2,432 = ~ 1,600 per ton leaving 2,450 as operating margin. Which does tie in to the 38% Leon previously mentioned. So operating profit of $24.5m pa plus, JLP’s share of the JV profit.
Great news this morning. I've had to read it twice to get my head around all the tonnage.
With the copper price at $6466 and the all in cost of the concentrate at $4,000 that leaves $2466 for refining and profit.
I'm not sure what the costs are for refining?
I also like that the RNS is clear and concise and on the face of it contains all of the relevant information. Long may this continue. Worse thing that Companies can do is leave lingering questions.
Excellent news. I really like the no dilution bit. Leon has previously mentioned that the margin at sable 38%, so $6,450 per ton x 10,000 x 38% = $24.5m operating profit pa, plus share of JV profit. Excellent news. Well done Leon, seems like Jubilee is really turning a corner and developing into a good mid tier company.
As we are going I can see us in double figures pretty soon. Keep the good work up Leon, and team.
Highlights
· Jubilee executes JV Agreement targeting the production of an additional 10 000 tonnes equivalent copper units per annum
· The Project targets to commence production of first copper concentrate within four months
· JV Agreement incorporates 2 million tonnes of in excess of 2% ROM Material with the potential to increase to 4 million tonnes of ROM Material as well as surrounding copper tailings material in excess of 2.5 million tonnes
· Under the JV Agreement, Jubilee will construct a new Processing Facility targeting a processing rate of approximately 600 000 tonnes per annum producing copper concentrate for further refining at its Sable Refinery
· The total Project capital is estimated at USD 15 million, to be invested over a period of twelve months, which Jubilee targets to fund utilising its cash reserves and access to debt funding, leveraging off its existing balance sheet
· The additional copper units supplied to Jubilee's Sable Refinery holds the potential to significantly enhance the earnings margin, targeting a unit cost of approximately USD 4 000 per tonne of copper cathode, offering a potential payback of the Project capital within one year
· The Processing Facility is strategically located to access the large potential of third-party copper ore in the area
· The Project is targeted to deliver copper units well in advance of Jubilee's previously announced copper transaction in Zambia ("Project Elephant") and is significant step towards achieving Jubilee's stated goal of 25 000 tonnes per annum of copper production
Leon Coetzer, CEO of Jubilee, commented:"This JV Agreement offers tremendous earnings potential for Jubilee. The Project has been a key target for Jubilee to drive the ramp-up in our copper production while we are implementing our previously announced Project Elephant. This transaction complements the already secured large copper resource and will provide us with earnings in the near term. The earnings of this Project is further bolstered when we commence the processing of the 150 million tonnes of tailings secured under Project Elephant, allowing us to expand and fill to capacity, over the long term, our Sable Refinery.
"The combination of easily accessible large surface resources, together with a fully operational copper refinery, offers us the potential to replicate, at a larger scale, the success Jubilee is achieving with its PGM and Chrome operations in South Africa. Our exceptional in-house processing and metals recovery abilities are core to this success.
"For Jubilee to have entered into this JV Agreement so soon after announcing Project Elephant is testament to a period of intensive work by our team and I would like to thank everyone for their efforts.
"We have already completed the designs for our Processing Facility and engaged with key equipment suppliers to accelerate the implementation of Project Roan. I am confident that we are able to fund the capital required fo
Earnings wise is this another $10m+ a year minimum?
Excellent news, especially the no dilution bit. And payback within 12 months . JV also allows processing of JLP materials, presumably within certain parameters.
Hopefully see some uplift today.
Another progressive RNS, and no dilution this time. Onwards we go