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CP52 - your description of a company moving from placings to debt and profit to finance expansion is spot on.
The thing is - JLP are already there - they have cash in the bank, profits coming in and have a deby facility of $50 million of which they have drawn down about $12 million. They have cash, income and debt to meet all needs.
The only reason they have done a placing is that an2 institutions came forward and offered them money if they did a placing - the board decided to take it out of habit - Colin can't help himself. they accepted one at 4p and rejected the other. the strengthening balance sheet line has been put out as a fop to shareholders.
Total Trader - 100% agree with your post and the two figures you mentioned re the sp.
Thanks Edzi for pointing out my confusion - you have such a great way of doing it - I am sure you are never wrong.
You are correct it was a placing not a rights issue, I will definitely use the correct terminology in the future - you will notice that my post mentions the issues surrounding a placing - maybe you could comment on them and the value to JLP or perhaps you are just pedantic by nature.
Have you been saving up the one about the AGM? That was from a few days ago. My reference was to whether either LC or CB would be there in person or by video call / teleconference since that would make them available for questions after.
To be pedantic though - I am no expert in Company Law but an AGM requires a Chair which does not have to be the Chairman of the company unless it is written as such in the articles of association. Remind me, what does to "assume" do?
Now do you have anything constructive to add?
Just trying to help.
You seem to be totally confused with lot's of points.
JM didn't have a rights issue at 4p they had a placing
Also the other day you asked if Colin and Leon were at last years AGM.
You can't have an AGM without the Chairman and at least on Director there.
Just trying to help
This is often the case Bluebelly - I have been fortunate to be invited to take part in many rights issues and in my early days I did just that. Generally now I steer well clear - it is a rare situation that I cannot buy at a cheaper price than the rights issue price within 6 months.
That's not to say a rights issue is bad for all - one of the key benefits is being able to buy a large bulk of shares in one go which is not easy on Aim. Take our recent rights issue @ 4p apparently taken up by one II, how else would they be able to accumulate £6m worth without a very drawn out and protracted building of a position over time.
When a rights issues comes with options or warrants than that can sway the decision, but we see more of that in the early days of a company when the risk is higher - these options often long expire before the sp gets anywhere near the option price.
As a PI, we can take advantage of that, sure it's risky because the SP may move away from us but equally it may drop. Building up a gradual position in a good company over time is often the key.
JLP are now getting to the stage where they have a good track record and a strong balance sheet. LC is now talking up the importance of that strong BS and it's important not to underestimate what it means - namely money can be borrowed against the BS rather than more dilution - something impossible to do in the early days of an AIM company. Equally for JLP the cash generation is very good - not quite enough to stop the recent dilution - one feels that JLP saw an opportunity with Inyoni / NewCo and took it even though it left them a little tight on cash.
There will be those that view that the momentum was stopped in JLP, and they might be right, who knows. Maybe it stopped people getting carried away and stopped a few investing at 4.7p when maybe a drop was inevitable at some time within the following 3 months. Maybe we have further to drop sub 4p, 3.7p, 3.5p - no idea, but as a PI, if we understand the story and understand the earnings potential then quite frankly I am more that happy with 3.5p because I can buy shares cheaper. It's going to take 2-3 years for this story to fully unfold and even then it may just be a stepping stone - in 3 years time how many PGM contracts will we have and how many additional Oz's - 100,000, 200,000 - I think that is where we are heading.
I personally don't mind a bit of SP weakness - I am not sure there is too much staggering news to come out now Jan / Feb - maybe a few updates on Kabwe Copper Cathode and the Fine Chrome but nothing we don't already know.
By the way, I am not saying I am correct - to those that are disillusioned with the recent placing I totally understand your view point, they are frustrating at the best of times and none of us ever know if they will be repeated in the future. I have been caught out many times in the past and no doubt will do again in the future.
Just for Balance - 9th Jan 2018 RNS - Part cut and pasted - not in its entirety!
'Jubilee secure Institutional Finance'
Jubilee secures investment from two eminent financial institutions namely Miton Group Plc and international wealth group arranged through Veddis.
· The investment has been made in recognition of Jubilee's successful execution and operation of the Hernic and DCM projects.
· This financing in collaboration with the project financing arrangements with RiverFort Global Capital ("RiverFort") will provide both the key equity and project funding support for the expansion drive of Jubilee's global metals strategy.
· The funding comprises the raising of GBP 4.5 million at a share issue price of 3.6 pence per share. (125m shares)
The placing includes the issuance of 62 500 000 warrants priced at a premium of 70% of the placing price or 6.12 pence per warrant share valid for a period of 5 years.
The SP was around 3.65p at the time having dropped from 4.35p, after announcing Kabwe deal. Over the next 20 months they could have bought shares anywhere from 2p--3.7p. They must have felt seen off with that deal. And the warrants 3x the SP at one point.
That dilution went in our favour with hindsight.
The ones buying in the 2p-3p area are quids in. At 4p a lot of the previous risk has now gone.
If you're in for the long game, JLP will multibag from here - IMHO
I understand your sentiment and in the past this was very much true, more recently most placings drop to the placing price and sometimes below with only the occasional exception . Rights Issue's are much the same but cost the company much more and are very much in the open ( price wise ) and limited to existing shareholders and their limited funds , hence not many companies go for them as failing to raise the funds required from an RI would result in further dilution at a lower price or at worst a failure to raise the required funds . When this scenario changes so does the SP . JLP could be about to make this change , if it does big rewards but if it doesn't same old same old
CP - I too have nothing against dilution. My problem is that on the vast majority of cases, the ordinary PI is excluded and has to buy at a higher price plus fees in the market in order to avoid their holding being diluted.
Dilution is always deemed as the devil of AIM but the reality is that it's the only option for a lot of companies . Without the funds that dilution offers most companies would be bust . There comes a time when dilution stops and that is when the company becomes cash generative and has saleable assets/collateral . At that point funds can be raised for expansion through normal channels and debt can be managed from cash being generated until that point you either have straight forward dilution or loans that are converted into shares and forward sold etc . This company is now in a transitional period , yes the 4p shares will hold it back but not for ever. As ever it's the timing of your investment
GLA to those who think the recent RNS is great business sense. Personally I don't get it ( or you ) At what stage in this process do you think dilution is good ? First profit RNS should be game changing for any company. Instead we fall … So sorry for LTH - This is bloody annoying ! I don't care if you think we are bottom feeders: Speak for yourself !
.....Leon didnt even have the decency to be honest in the previous rns about the % of new shares issued!
Billy. That's fine and dandy if all the options are taken up. But we all know that AIM directors often allow unfavourable higher priced options to lapse and replace them with cheaper ones.
but it will never get to the 8-15p that maybe it should because of warrants and placings flooding shares onto the market. any decent rise is always held back by more and more share issues diluting the value of each share over and over again
Thanks for correcting me.
So we have about 160m shares to add to share cap and the prospect of approx £8.1m in cash to come in.
Happy to be able to buy here at 4.1p.
When we're at 8-15p, I will be jealous of the warrant holders. Imagine selling £1m and buying the £1m back for £500k.
Mini bounce to 4.2p yesterday - exactly as predicted.
You have listed the current outstanding share options (as per page 76 of annual report 30/06/19.
The current outstanding warrants 9as per page 75 of annual report 30/06/19) are;
27,777,780 at 6.12p exp 19/01/23
29,166,665 at 6.12p exp 19/01/23
5,555,555 at 6.12p exp 19/01/23
2,777,778 at 6.12p exp 19/01/23
19,417,476 at 3.863p exp 28/12/23
12,944,984 at 3.863p exp 28/12/23
1,473,055 at 3.38p exp 20/03/21
Total warrants outstanding 99,113,293 which would bring in £5,294,950 at an avg of 5.34p per warrant.
Like you, I do not think that looks too bad really!
If that's the case and you always are looking backwards why don't you sell up.
Like all PLC's they want PI's to sell up and get them in the hands of II, as II are looking
forward and do research about the huge profits JM are going to make in the next 12 months and onwards.
If you are an accountant, I'm sure that most of your clients went backwards before going forwards
Leon is confident, passionate and knowledgable but lacks some basic skills. His communication management is appalling as proven once again by the latest RNS. There must be dozens of poor communication examples.....plus trying to get an answer directly from JLP on anything is impossible.....has anyone here ever received a reply to an email.....and why hasnt he removed Colin?
RE projects ....Hernic was very late, Kabwe is late, Tjate enough said, Australia died at a loss....so many....
We just have to accept that some shareholders cannot let go of the past.
I note that if the earnings projection given further below of say £26.1 M this translates to 1.24 pence per share,
Not bad for a share priced at 4p. I would say this speaks louder than Arrie's essay.
Outstanding Warrants= 65450000
LC - 7m@1p, firstname.lastname@example.org, 4m@4p, 4m@6p = 23m
CB- 5m@1p, email@example.com, 2m@4p, 2m@6p=13m
CM = 1.5m
Management personnel = 16.45m
15.65m@1p = £156.5k
Total of £2.853m to exercise all warrants = Average of 4.36p/share
The warrants don't seem that bad, as they could buy them cheaper now.
1) Colin is a liability as Chairman and Leon is a Technician not a CEO. Colin should have resigned years ago. So no confidence in the BOD in the market - I'm inclined to agree with you regarding Colin. He is a remarkable salesperson but has his fingers in too many pies. I disagree 100% with you regarding Leon. He is confident, passionate and knowledgable, you couldn't ask for a better CEO. The other two non-executive directors (Phosa and Molefe) add value to the Company from the positions they hold in other walks of life. Molefe is Chairperson of Merafe Resources, producing ferrochrome (hello PGM's) who are in a joint venture with Glencore who, probably, have the second most tailings in the world - not bad for JBL if we can do some business for them.
2) The geographies they operate in are unstable - Where exactly in the world are economies stable right now. Phosa is a member of the National Executive of the ruling party in South Africa. He will be one of the first to know when things are about to change / fall apart. Zambia is one of the few stable economies in Africa.
3) There is a long long history of dilution. - How else does a company, with only a vision initially get money? Banks are certainly no lenders of capital against visionaries. The latest dilutions are revenue and earnings enhancing and you cannot compare those to the earlier ones. The fact that the placements are taking place at higher levels is indicative
4) There is a long history of badly managed projects that are over budget, late and don't deliver the benefits - Please name one late project. Braemore was a learning curve and we acquired Leon from that "mistake".
5) Tjate is a holy cow that cost millions and is worth nothing - Agreed that a song and dance was made about how wonderful Tjate is, and is bearing no fruits. Given that getting the Tjate licence was done when the platinum price was north of $1500,, timing was unfortunate. It isn't costing a fortune in the interim so to disregard it in its entirety is a little premature.
6) Considering the average share purchase price is circa 7p there is a queue of people (AKA me) waiting to offload - Typical shareholder mistake as far as I am concerned. When the share price gets back to 7p that is the time you want to be in - it's called upward momentum.
7) Lots of outstanding warrants - Part of the problem again of not having money. They will be executed and then no more will be needed to be issued. Same as share issue and dilution. It's how a small company grows.
8) The entire business model works on a minimum 2 years of build and expense prior to profit which is unattractive to many investors - Microwave generation. Build on a solid foundation rather than be a company that is out of business within 2 years.
9) The global market is in decline - and your point is .......... if JBL can make money in a market decline and raise money, how much more so will the share be undervalued when the markets turn, the SP will react acc
Arry, so positive? If it’s that bad why not sell and move on? Whilst tying your money up here you must be missing other opportunities?
I could not agree with you more Kalan.....but remember... you and I Have followed JLP for years. A reminder of why JLP will not make huge climbs in share price. Pay attention to item 3...
1) Colin is a liability as Chairman and Leon is a Technician not a CEO. Colin should have resigned years ago. So no confidence in the BOD in the market
2) The geographies they operate in are unstable
3) There is a long long history of dilution
4) There is a long history of badly managed projects that are over budget, late and dont deliver the benefits
5) Tjate is a holy cow that cost millions and is worth nothing
6) Considering the average share purchase price is circa 7p there is a queue of people (AKA me) waiting to offload
7) Lots of outstanding warrants
8) The entire business model works on a minimum 2 years of build and expense prior to profit which is unattractive to many investors
9) The global market is in decline
Good luck everyone!
Having been here 10 yrs with an av of 15p i have to agree that having waited so long for some positive action, the moment we get some its snuffed out with further dilution, consolidation will be next & then it really will be game over for the LTH's
The pattern here is repeated - quick rise over a week or month then 3 to 6 months of doldrums and sideways to downwards movement - It is worth holding through it all but that takes a long long time. The next rise should take us past 7p IMO but I don't think it is going to start for at least 2 to 3 months - I will be back in - fully invested - at the time of my choosing and at a price I am happy with - 3.7p in January will suit me fine. previously I would have jumped back in at 4.1p to 4.2p and held and watched them drift before turning round and come back up through my purchase price - not this time.
This does significantly change my view of the share. With massive inflows of cash coming JLP way I really thought this type of thing was over and I was happy to remian a long term hold. Now, no matter how positive the newsflow due to lack of trust there will be more profit taking and as such a much slower and more volatile uplift in share price. Still in but will be looking at price points to take highs as we go which wasnt my previous position.