Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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I couldn't agree more with TBTT about the lack of reported detail regarding Jubilee's operations. The soft marketing interviews do not impress me either. The only interview Leon has provided at which some hard questions have been asked were the Crux ones towards the end of last year. But at least Northam have provided some detail of the PGM prices and what the likely Windsor PGM basket split by volume is in their results at the end of last week. Asa result I believe I now have a far more accurate model to try and predict earnings for the PGM side of the business. Unless there is a large drop in palladium and rhodium price this month, and no significant operation difficulties, Jubilee's PGM earnings in Q1 2020 should be at least US$15m (£11m). However there is a big cautionary note. This figure will only convert into cash if the same level of PGM prices exist in about 3/4months time! Even so the number is impressive. Leon mentioned that PGM prices were strong on 31 December. Well even after some relatively small PGM prices falls last week, the PGM basket is still over $500 per ozs higher than on 31 December.
We all know that probably even with the positive earnings coming through from Inyoni on the chrome side, the chrome business as a whole will be producing negative earnings. And this might continue for a year or so. The unpredictable black swan event of the coronavirus has wiped out all hope of a relatively quick rebound in the chrome prices. But if the PGM prices remain at the current level, these will be insignificant in comparison to the PGM earnings. A big IF though.
At the moment we have no idea what the margins on the copper will be at Sable. No doubt we will have to wait until the 2nd half of 2020. The fact we have copper tailings at Sable (how much?) included in the Sable deal was a nice surprise. Maybe the half year results later this month will provide more information.
Surely they could commission and third electrowinning circuit at some point?
Jonah and Moneyhawk, from what I recall there are two electrowinning circuits already at the refinery to convert the concentrates into the final metals. These could be if required used interchangeably between the copper and zinc. It looks as though one is already being used for the copper production. At present it looks as though there are no current plans to use the other for the zinc, as only zinc concentrate production is being referred to. Don't know if they will need both of the electro winning circuits for copper once the target of 400 tonnes a month is reached, or are they planning to exceed this figure from Q3 onwards depending on 3rd party ore supply?
It all smells good to me. Making money earlier than probably expected. Pity there’s nothing in the SP yet for it!
Jonah, yes I do remember that interview. Can’t remember when it was, but I think the indication LC gave was that the zinc circuit could be switched between zinc and copper with minimal time required. But it’s not really that clear if we’ve done this, and just choosing to produce copper instead of zinc, or if Glencore had left the copper refinery with everything in working order and we’ve just switched it back on with little progress towards zinc production.
Although we must have done something in the plant to be extracting copper out of the tailings Glencore had discarded.
In some interview or RNS a while back, it was made clear that Sable would be developed in a way that permitted easy switching from copper to zinc according to ambient commodity prices. We are still building the zinc facility, so no marked deviation from stated policy there. Lead has always come later. I would say everything is still going to plan except for vanadium, which, according to LC, has a short lead in time so we can put that on hold, and develop a circuit quickly at a later date if it looks economic..
And, while we are at it, I don't see Covid as a market catastrophe in the making. A set back, yes, but China's new cases and mortality are not increasing exponentially, as some predicted. In fact they are dropping back markedly and, economically speaking, where China goes, we all follow. I'm back in.
Money - and while we're at it, what about lead. One of the main USPs that we originally invested in Berkley Mineral Resources for all those years ago, apart from making money, was to help clear up one of the 10 most polluted cities on earth.
I'm surprised the Zambian authorities aren't thinking the same thing.
JLPP - yes, very good update. Interesting to hear Leon talking of a $60m capex on constructing rather than acquiring a refinery.
How many times were we BMR shareholders diluted with a promise of building a plant for just a few million.
Still we did get a few random concrete circles for our money.
If you didn't know better, you might be tempted to think the BMR BoD were a bunch of lying scumbags.
I would have thought that the bringing online of metals is just a planning issue. I’m not convinced that Leon is able to forecast the future! The strategy is to produce as wide a range of metals as possible to win on some and win less on others?
From the interview Leon stated we are already producing Grade A copper at Kabwe with Cobalt to come in the next few weeks. The Zinc circuit is currently being worked on so would expect that to come on line in the next few months
The PGM production target of 60,000oz a year does seem achievable, which is 5,000oz a month. And according to the 6 month update we exceeded 5,000 oz in November (5,001 oz? lol), so it looks possible that we can hit this target.
And the focus does seem to have shifted towards copper. Very little mention of zinc and whats happening, and unless I missed it, no mention of vanadium which LC couldn't shut up about until the price fell.
As for the cost of Kabwe tailings though, we haven't actually paid anything for them. Our costs for them have been to do with developing the plant to process the tailings and buying the (currently worthless) stake in BMR. Our 'cost' for the actual tailings will come further down the line in the form of paying BMR a royalty when we do get around to processing the tailings.
The significant cost associated with Kabwe hasn't been for the tailings, but has been for buying Sable. This is now producing copper, and apparently from tailings that came with Sable from Glencore. So not really such a bad deal? But whats happening with the Kabwe tailings does remain a bit of a mystery. Is zinc and vanadium recovery on hold until the prices pick up?
TBtT, as you know all will become clear in the usual JLP way ( or miss-way)! Grey as always!
I listened carefully to the interview. Some thoughts:
1. Remember, Leon is quoting "target production figures", not actual achieved output. He's encouraging us to delude ourselves with imaginary profits.
2. No mention is made of chrome, probably because JLP are losing money on their chrome output - certainly that from Windsor Chrome and Dilakong. A lot of money has been spent on chrome at both Windsor and Inyoni, for no appreciable earnings return yet.
3. Likewise, after two years, no earnings have yet come from the massive expense and dilution of buying the Kabwe tailings. That deal looks to me like a dead loss.
4. I can't help but suspect that Leon's recent interviews, and indeed Colin's recent share purchase, are an attempt to shore up the share price. Why? Maybe because another asset purchase is planned, such as a pile of copper tailings in Zambia. And, inevitably, that purchase will be financed by yet another equity raise.
All told, I'm not impressed by the lack of hard figures here. It's very hard to judge the true financial health of this company, and that make me inclined to avoid for now.
Very impressive :-$ Thanks.
Really a positive interview with LC on Proactive.
https://www.proactiveinvestors.co.uk/LON:JLP/Jubilee-Metals-Group/
i am jealous for those with spare cash to buy at these massive bargain. market will settle (in fact DOW now bounce strongly up). virus will continue to be here as well as flu and other virus. so market will hopefully start to recover from Monday.
i can see JLP start recover back up. not able to top up on Monday but maybe able to buy some more sometimes next week.
If palladium drops to 900 and platinum to 600 JLP should survive. Payments to make for pgms and chrome but they have the placing money and good income at the moment. Could always delay Kabwe to preserve cash. Jlp in a more robust position than most. Lots of pgm miners are cash rich so should be ok
I have been buying the drop. I am still out by about 1 mill shares here but fast catching up - going to wait until next week. The thing is if the virus takes off mines will close for sure, production too but we as humans will still need to consume so it will be short lived. JLP in a good position as its not man power intensive anyway - no dark, sweaty mine shafts either to spread the virus. Plus I think there could be huge QE from all parts of the globe.
IMO.
Agree topcatz, this market has gone crazy, it’s like people think a zombie apocalypse is on the way.
Best thing to do at the moment seems to be stick with your current position, in or out. This could well go lower, but may not, who knows.
But think when it all settles down we should be ok here. We know that our costs per pgm oz are far lower than for a traditional miner, so we can still produce PGMs profitability at much lower prices than today. But so far PGM prices don’t seem to be falling that much, and palladium in particular is still over 30% up on the start of the year. So looking a bit more positive than the market falls suggest.
Just seen that Northem have t rippled their profits, it should help us in the long run.sorry ,don't know how to cut and paste.
Topper uppers - Might be best to wait for 3p (if it gets there). If it doesn't then all the better if you are holding on to your stake.
It's an irrational market so if you're not selling just switch off (it will recover as it always does) and if you're buying don't be too hasty.
Standard
JLP is now beyond oversold. blame the virus!
no point selling, just ride it out. if i have spare cash, this would be the best time to accumulate cheap shares.
switch off your screen and come back next month!