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The option wouldn’t create goodwill because that’s only when you buy a trading business, if you buy a holding company it’s a asset purchase and presumably if you don’t pay cash the asset is seen at fair value in this 5 million quid presumably the value of the Kabwe project which is a lot more but with assumptions and so on
Thanks Jammer - great knowledge and insight by the way.
I won't be attending the AGM, 6th Dec is a surprise night away at a Spa from my GF - not so much a surprise now since I said I was booking train tickets to London on the 6th and she had to tell me !! So somebody else will have to ask the questions, pity I was quite looking forward to going!
That said I found this from the RNS on March 28th when JLP announced the full Kabwe deal:
"Jubilee has already secured Zambian ministerial approval for the transaction. The Minister also waived previous conditions placed on the Kabwe mining licences. "
Whether that means waived the license completely or just waived some specific conditions, potentially the renewal dates I do not know. LC is a clever chap and CB is a wily chap so I would be surprised if they left something so important on the table......
TotalTrader, In the strategic report section under Licensing and Risk on p13 of BMR's annual report up to 31 December 2018, it states the small scale licence has an expiry date by October 2020. It says nothing about the large scale licence so perhaps I have got the expiry date for that licence wrong. But the small scale licence is the critical one for the Kabwe tailings project.
It is possible this date has already been amended, but I have seen nothing to confirm so.
TotalTrader, the small scale licence which enables the recovery of metals from the Kabwe tailings is held by Enviro Processing Ltd, a Zambian registered company (EPL). Jubilee holds an option, at its sole election, to acquire 100% of the issued shares of Enviro Mining Limited (“EML”), a subsidiary of BMR and the company that owns EPL.
The large scale licence is also currently held by EPL. Jubilee has no interest in this licence and would want to see it carved out before exercising their option to acquire 100% of EML and its subsidiary EPL.
Galileo want to acquire the large scale mining licence and have already paid BMR for the option to obtain it and the rights to the Kash* tu prospect. This is referred to as the Kabwe Residual Rights Option. But finalising this option is subject to the Zambian authorities approval.
I am sure Jubilee will elect to proceed with the purchase of EML once the Kabwe Residual Rights transaction has been approved. This would also need to be approved by the Zambian authorities. Once approved BMR will have no further interests in Zambia and Jubilee will have total control of the tailings project.
I am not sure where I saw that the large and small scale licence renewals were due in the Autumn of 2020, but I will let you know as soon as I can.
Hi Jammer - can you expand on the point? I am not to familiar with the BMR/Kabwe history and apart from remembering somewhere that the Zambian ministers waived some mining rights I do not understand the situation.
I had presumed that with it being tailings and effectively a clean up then it was not a mining operation and as such did not require any licence. I am familiar with GLR Star Zinc and their application for a small scale mining licence but nothing yet as far as Ka****u is concerned - Ka****u realistically looking like it is 4-6 years in the future for GLR.
Thanks.
Thanks for the explanation TT, much appreciated. Also a great point about the licence.
Never mind the jiggery pokery of the £5m, what's more important is when and if this option is going to be used. As far as I understand things everything links in to the small scale and large scale licences, both of which need to be renewed in the Autumn of 2020. Jubilee do not want the large scale licence and I suspect some liabilities which come with it, but Galileo does because of the Kash*itu prospect. So the option will probably not be used until Galileo have secured it. All subject to the Zambian mining authorities approval of course. So please if anyone is going to the AGM, please ask for some clarification on the whole Kabwe licences issue, and in particular their renewal next Autumn.
Hi JLP - I didn't see it as earnings i.e. from operations. It was a release from the balance sheet - of course that ultimately finds its way to EPS but it was not released as revenue. Pretty standard practice when a company wants to make the EPS / P&L appear better than it is they hunt through the balance sheet to release a provision or change asset values. Every FTSE 250 company without fail will play around with these numbers every year, if the P&L is better than expected they will increase the provisions on the balance Sheet and if they wish to inflate the P&L they will release a provision.
What is interesting is the true EPS if you strip out the one offs from this year and it is much lower than the reported EPS - that is OK, it just means that next year if other one offs are not used then it becomes more difficult to surpass the previous years EPS - only time will tell. But you are correct to ask because it is an interesting and unexpected one to release, if I go I will ask for both of us.
Both LC & CB will be at the AGM. Sadly I won't be.
If anyone does get the opportunity to ask about the 5m to hit the earnings from the option JBL acquired for free from BMR I would like to understand why it is classified as earnings (I'm sure they will say the accountants made them reflect it as such due to IFRS 15). When you overpay for a company it's shown as Goodwill, as an intangible asset on the BS. So why if you get it for free is the value shown has earnings. You have earned nothing, just been given an asset (should it not be negative goodwill). Just wondering
I won't take it personally BB, I have thick skin !!
Sorry TT misread your post.
BB
Definitely not TT.
From Results RNS:
'The Company also hereby gives notice of its 2019 Annual General Meeting, which will be held on 6 December 2019 at 11:00 am UK time at Fladgate LLP, 16 Great Queen Street, London, WC2B 5DG'.
BB
6th Dec in London. have a look on JLP' website below the accounts. Only worth going if LC or CB are there.
No I didn’t, but when is this years? Might be worth rocking up!
Did anyone attend the AGM last year and if so were Colin and/or Leon present?