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I also calculated SLPs 6E figure per oz to be $1024. It comes from comes from:
SLP 4E revenue of $50.96m + 'by products' revenue of $3.376m = $54.336m revenue for 6E PGMs
Revenue per 6E oz therefore = $54.336m / 53,062 oz (6E production) = $1024 per oz (not including the $4.7m of sales adjustments)
’May be they are both fairly valued at this moment‘
Maybe they are both undervalued at the minute. I haven’t gone in depth here (which looks quite difficult & time consuming) as I only have a relatively small holding at the minute but I’m far more familiar with SLP and (in my opinion) it’s still undervalued even after the recent rise.
Apologies:
60% of SLP's mcap after cash in the bank is removed.
BB
Thanks Visitior. Always good to get more info that explains the differences.
JLP mcap £82m for 72k oz/annum of 6E PGM - zero cash (ish).
SLP macap £174m for 106k oz/annum of 6E PGM - minus £36m cash pile - £138m .
JLP are 60% of SLP's mcap and produce about 67% of the oz.
May be they are both fairly valued at this moment. Roll on Kabwe and Chrome recovery.
We could then hit 5p+
BB
Bluebelly - SLP's avg sale price per 4E Oz was not $1,024 it was $1,476 per Oz. SLP report on a 4E basis. They had revenue of $59m versus production of 40,003 Oz for calendar 2H 2019.
However because their reporting is so detailed, on a secondary level they also report on a 6E basis in their back-ups. If you were to revert to a 6E reporting basis for SLP (6E Oz no longer treated as by-products), then you would have to increase the production to 53,000 Oz for 2H 2019. So SLP would become a 100K+ p.a. per Oz PGM producer if you were to compare apples to apples with THS' and JLP's 6E PGM reporting.
In any event for JLP, they report on a 6E basis and if a 4E PGM basket price quoted is to be useful to those trying to work out JLP revenues, it needs to be normalised accordingly. Irrespective if JLP hit their 6E PGM targets, they should be making a lot of free cashflow, albeit for entities like SLP and JLP, there can be a 3-4 month delay from time they provide PGM concentrate to refiners to time they get paid.
Hi All. It would be really good if one day the BODs at JLP gave a understandable and precise PandL. The way we have to work out our profits or losses are crazy, just my opinion. Does anyone really know what our financial position is, i for one do not. ATB Speedy.
Jonah - mix up in what way? When people quote 4E PGM basket prices on sites like LSE or ADVFN for both SLP and JLP, people need to remember neither company receive such PGM basket price and this fact is always overlooked. It's useless quoting such figures if you don't then equate it to actual revenues.
- For SLP to get the true potential sale price/ revenue, you need to deduct roughly 20% off the 4E PGM basket price to take into account the refiners costs/ fees.
- For JLP and based on 2H 2019 calendar figures, it appears you need to deduct circa 46%. This is because JLP also need to deduct 20-25% for refiners costs/ fees, but there is also the major difference between 4E and 6E prices to the downside. the additional "6Es" are ruthenium and osmium which are only $255 and $400 per Oz respectively. They reduce the basket price significantly. Hence you need to cut off circa 46% to any quoted 4E PGM basket price for JLP. Such % could vary from q to q.
There will always be guesswork and potential mix ups unless JLP release their 6E PGM Split. They only have 2 working sites - it really isn't difficult to do. SLP have 6 working sites and manage it on a per site basis and overall.
The most accurate figure you can go on presently for JLP are the figures in their 2H 2019 report and it's clear from the revenue + Oz produced they achieved a price of $992 per Oz. So tracking a 4E PGM basket price at the time of $1,800 would be as much use as a chocolate teapot if not put in the proper context of what that actually means for JLP revenues. Unfortunately it's up to PIs to fill in the blanks in JLPs reporting so of course there is always guesswork which can lead to mix ups.
Hi Visitor. Appreciate your post. Can you reassure us that, in your calculations, there is no mix up between JLP's revenue from PGM Concentrate (prior to smelting and refining) versus quoted basket price for PGM Metal? I know most of the value is in the concentrate, but this issue has been overlooked in a number of posts on this topic over the last few months.
Jammer1's post from Monday:-
'As others have said the SLP basket price is gross i.e. before any processing costs of the PGM concentrate and penalties for impurities in the concentrate. Based on a 6E PGM basis, and assuming revenue is defined in the same way for both companies, I have calculated the net average basket price received for SLP and Jubilee during the last 6 months of 2019 to be $1024 and $991 per oz respectively. I have assumed a £ to dollar rate of 1 to 1.3. This result looks reasonable as the rhodium content in the Sylvania basket is believed to be around 40% more. The difference in prices since the beginning of the year will have provided a far greater value advantage in the basket price for Sylvania due to the huge increase in rhodium prices in particular. Sylvania's 3rd quarter figs will be amazing if the current PGM prices, and particularly the rhodium price, hold up.'
JM will still be receiving a lot more this quarter than last quarter
BB
The numbers on ADVFN bear absolutely no relation to JLP's actual 6E PGM basket split and revenue. First of all the numbers stated on ADVFN are 4E PGM Oz and therefore already wrong in that JLP report their Oz on 6E basis, the 2nd is that Palladium is nowhere near 40% of the basket even if JLP did report on a 4E basis. This error seems to have started when an off the cuff comment was made in an interview that 40% of JLP's revenue was from Palladium.
Take JLP's calendar 2H 2019 results as an example:
6E Oz Produced: 21,802
Revenue: GBP 16,085,000 x Forex 1.3 = $20.9m
Price per Oz: $992 per 6E Oz.
That is in comparison to avg. 4E Basket Price for that period of $1,830. So the JLP price equates to only 54% of the actual 4E PGM basket.
Until such a time JLP finally produce a ballpark PGM split (I won't hold my breath), you're better off taking the SLP 4E PGM basket and multiplying it by anything from 54-60% to come up with a crude JLP 6E PGM Basket Sale Price.
Thanks bud.. will take a look at that post
All the best
Hi LUFC!
There's enough visibility on the contents of JLP's PGM basket to make calculations. See Bullster's running basket price calculations over on the ADVFN board.
It's worth also mentioning that the new Windsor PGM output has a higher rhodium content than the old Hernic / Inyoni output. That will also drive earnings higher.
What is our average basket price?.. how many oz of Palladium do we produce?.. i think if you made this clear like other businesses we would see some traction in our share price.. my response
JLP have just tweeted in regards to palladium prices
Article in
@FT
shows record high prices of #palladium of over $2,700/ounce for its use in catalytic converters.
Positive for $JLP with recent #PGM ounces delivered up 82%, PGM revenue up 107% to £16m & PGM operational earnings doubled to £8m