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Jonah58,
I think that the prices of Rhodium and Palladium is important, but not as much for Tjate and especially not for us, as there is no way that anyone, possibly the Chinese aside, and I doubt even they probably wouldn't do it, will give funding of over a Billion Pounds to a company with a Market Cap of around 90 Million Pounds, even with prices of Rhodium and Palladium at the moment.
Personally, I hope Anglo will JV with us and they will take Quartzhill off our hands and we may get the tailings from some of their Chrome/PGM's/other metals across the board. It makes sense, we don't need Quartzhill and it is at a different level to the others and Anglo can get to it from Twickenham for minimal further cost and we get access to some of their tailings.
That would in my opinion be the best of solutions for both parties. Also I do say that it is only my thoughts here, but I can't see a problem with this suggestion.
You may be right, Kaiser. The interesting point is that with Rhodium blasting through £9000 and Palladium sky high, the miners have to produce more PGMs and platinum comes out almost as a by-product, yet, despite this, Pt has risen by 17% in the last six months. It may be too early to attribute value to Tjate, and the palladium bubble may burst as auto manufacturers look to switching back to platinum, but I can see some business (probably Chinese) taking a long term view on PGMs and looking to 'bank' a resource. Not all the majors are cutting back. Northam, for instance, has ambitions to expand and, as I have posted before, Quartzhill might start to look interesting again. Watch this space.
Tjate, I my humble opinion, at this time isn't viable. The price of Rhodium and Palladium will spur mines to re-open mines on care and maintenance, which will cost far less than the 1.2 billion pounds to get to the PGM's in Tjate.
Eventually it may become economically viable to get financing to get the PGM's out of Tjate, but supply will have to get strained to the max and platinum will have to get to 2,000+ dollars and potentially around the price that palladium is not far off at the moment, which could happen, as palladium has proved recently.
The one thing to consider at the moment is that Tjate is not likely to have a lot of value on either the balance sheet or to the company and that could/should change.
Hope they stick with what they've got on their plates until Kabwe is churning out cash. GLA.
That's the one that I reckon the whole of the BB and some are with you on Kalan !
We make a bit on chrome even at these low prices and pgm income should be up due to Windsor - and in the last month income will have stepped up again due to pgm prices but won't be in the last 6 months figures.
It's all about cash and they are spending a lot but have the placing money and increased pgm money for lots of outgoings - I don't think we will be any the wiser after we get the 6 monthly results although I think Windsor will raise an eyebrow or two. Short term share price - possibly up to 4.8p and maybe 5.0p on a spike before a pullback to around 4p + or - a bit as there will be along wait for the next figures (July) and or Kabwe start up (May to August) plus ramp up. Could be positive or negative news in that time period re projects and finances. Hope they stick with what they've got on their plates until Kabwe is churning out cash. GLA.
An update will clarify a lot of ambiguities for sure, but I don't think we'll see one for a couple of weeks (cue imminent RNS incoming :)!)
Agree TC but always like to try and understand the landscape.
A really key update due - cash is 1 thing as we pay for purchase and scale ups, but also if we are on schedule or ahead on timings / production levels. The Shard analyst highlighted we were undercalling our processing capacity and i wonder if we have done the same on our Q1 copper outlook form Kabwe - 150mt - if we get ahead they were expecting 400mt in Q2 - so some difference. We also have the tailings we bought near Windsor plant, Chrome, PGM's so if on track will IMHO lead to a massive lift to price. - We all know that there is a massive upgrade in operating revenue and profit to occur and hence our investment - big difference in market view of share if it has now occurred. Fortunately Leon seems to so far have been adept at under-forecasting and over-delivering - lets hope he can continue as the quantity of projects rises.
'Samancor employs 5,714 people at its mines near Rustenburg in North West and in the Lydenburg /Steelpoort area of Limpopo'
You would hope that they would be happy to keep Hermic going with Plat prices as they are. I can't see any specific mention of where these jobs are going but that would give us a better outline. I'm sure we will all be the wiser a few weeks down the line.
Hi Top Catz!
Maybe. But what about water and power supply issues for Jubilee if Samancor place the Hermic complex into care and maintenance?
(Note: especially water supply! I don't understand this.)
Whatever way you care to slice and dice it the chrome is very much a side show, probably wrapped up with the extraordinary good bit of business with the Hernic PGMs (a catch if you like). They've now got a pile of chrome tailings to work through but with the current margins they should prioritise their other projects in front of this. Nothing really to see here imo.
Good Morning.
Whilst low Chrome prices is never ideal, I presume that our Chrome cost of production is lower than that of the miners as we dont first dig it out the ground. Is that a correct assumption? - Does anyone have a view on the differential in cost? I suppose we do still need to move raw ore to plant - how does this compare to dig cost?. Also I presume our process of gaining chrome concentrate is as power reliant as the miner? or do we leach concentrate in a lighter power use?
If we are both cheaper and less exposed to power risk then happy days for the long term as other larger miners cut production first. Hoping that some of you, more savvy in mining can advise?
NtD
Yeah, i read about the job cuts. Sounds like the price of chromes should be bottoming out (positive spin i know). Job cuts always seem to come right at the end of a cycle before a pick up. Will be very interesting to see if Leon has played a blinder here and got the timing right. It remains to be seen where Chrome prices will be 6 months down the line but they could well be on the up by then. Who knows
Hi TopCatz!
You are probably right, definitely you should be right. I guess I'm just a bit battle-scarred and shell-shocked from past raises!
Meanwhile, Samancor (new owner of Hernic and major chrome miner / ferrochrome producer) are cutting 40% of their workforce due to low chrome prices and power supply issues:
https://www.businesslive.co.za/bd/companies/mining/2020-01-21-samancor-joins-a-growing-list-of-sas-mining-companies-retrenching/
Good morning Tiger. Surely they would have raised more before Christmas. They were batting them away with shyty sticks ball all accounts and even with their track record they are not that daft. Hard to believe that there would be an equity raise to cover ongoing payments at this early stage. A raise for another project would never be out the question of course but I think they have enough on their plate for now.
Hi Kalan!
Yes, PGM income will definitely be up. (Chrome prices still very low, though - $135 per tonne of 42% UG2 concentrate.)
Medium term, it's all good. But there must be a cash flow crunch right about now due to the heavy monthly payments to Samancor for the Hernic chrome deal and also for the costs of Kabwe.
JLP really ought to be able to borrow money to cover any short-term lack of cash - either from Riverfort or simply from a bank. But I'm a little jaded from experience, and I half expect an equity raise...
Large incomings and outgoings Tiger - let's hope there is not another placing for all holders' sakes. The increased income from PGMs should make it less likely than it was.
Hi Oddbod!
Yes, JLP report tailings production as 6E PGM.
A little concerned by long silence from company. They have to pay quite large monthly sums to Samancor for the new Hernic chrome / PGMs deal, as well as having bills to pay for Kabwe. I hope this isn't the prelude to another placing...
I used 4E PGM production as this is how they describe it on the company website under the Tjate project. Do they use 6E when their reviewing their tailings revenue rather than the Tjate project?