The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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Daily broken down, weekly breaks down with a close of 6.40 or lower on the bid today.
This afternoon is life support or death, if we have to move out to the monthly because the daily and weekly have gone then 3.5p will be on the cards.
Last chance warning to genuine investors!!! Time to stop listening to those who have been ramping from 22p down to this level.
Although I am very disappointed in the share price, i will buy more if the share price drops. It’s like a lose win in a way. The company will come good long term and this is my pension hopefully
PGM's normally reverse around $800, currently $890ish. However with inflation affecting everything, I would be surprised to see PGM's go that low. Care & maintenance will kick in earlier, this will hit the supply side and the price will rise. Unless a deep recession kicks in!
BB
How much earnings as a ratio to current mcap, does the chrome uplit give JLP Dorforno??
Seis
I certainly don't think the market has taken into account massive increased earnings that will come from chrome.
It has become an earnings stream on it's own. In South Africa and speaking to knowledgeable people I get the feeling that they don't expect PGM's to stay so low for much longer
Chrome ore market morning review on 18 August 2023
Fri, 18 Aug 2023 01:29:00 GMT
www.ferroalloynet.com: South African chrome ore 40-42% concentrate price is 295-300(bulk). South African chrome ore 42-44% concentrate price is 335-340(bulk). South
BushyTailed
Posted in: JLP
Posts: 2,515
Price: 8.90
No Opinion
RE: Share Price Belies Intrinsic Value
14 Jun 2023 16:55
Struggling on the 20 week average... Failure here takes us to sub 6.5p
Yeah it is a nice story, unfortunately Sarel did not much care about facts. It is more like buy today, be rich tomorrow trash and tomorrow the company reports mayor problems. UUUhhhhh. I did not see coming, completely unexpected. Credibility is: your choice.
Been the problem, absolutely zero transparency or consistency with regard to market updates.
When I posted I looked at trades only three by then it showed , mine did show correctly the only buy .
But not showing at 7pm .
Trade recordings on this site not correct , in a few ways.
Merafe resources (JSE listed Chrome producer) are up over 9% today after releasing their interims on chrome prices.
www.moneyweb.co.za/mny_sens/merafe-resources-limited-unaudited-condensed-consolidated-financial-statements-and-dividend-declaration-for-the-six-months-ended-30-june-2023/?utm_source=Moneyweb&utm_medium=Indicators
WH Ireland quote between 40-42% in the research note so thats what I’ve been using for pricing.
Does anybody know the quality of chrome concentrate we produce
It's very important to take note of the punctuation there I think froggy.
??????
That’s true shuvlin I just bought 29416 @ 6.799 showing as a sell ,I have always had high hopes for this share but I am coming up 80 but hope I see it come good in my life,I have been here since 7/2/2013
All orders except one buys today and all showing as sells.
Topped up in ISA paid 6.84p
I've been looking at the numbers and trying to get a better understanding of how a change in chrome concentrate price translates to revenue and earnings. The majority of our production is currently at a fixed margin with a small percentage from the fine and ultra-fine chrome at market rate. Here are some plots I did of the data from the 6 monthly updates (bear in mind this is unaudited data):
https://tinyurl.com/yaprrbky
The things that stand out for me from the last update on 31st Dec 2022, although chrome production increased from the previous update, both revenue and earnings decreased. Part of the reason for that is a drop in the chrome concentrate price but that on its own doesn't account for the size of the drop. It's possible that the power issues which affected the Windsor plants have affected the higher margin fine and ultra fine chrome circuit and that production was ramped up on the lower margin chrome to cover the production shortfall.
Assuming the Winsor plants are now fully operational again we should see a bounce back in revenue and earnings in the next set of numbers for the period to 30 June 2023. If you look at the chrome revenue / tonne it tracks the chrome concentrate price pretty closely so from that we can extrapolate the chrome revenue / tonne based on the current chrome price. It should be somewhere in the region of US$95/tonne. Similarly we can extrapolate the attributable earnings / tonne to the current chrome price, I estimate it should be US$16-18/tonne by 30 June 2023. From July onwards there is the additional chrome production at a significantly higher margin (roughly 20%).
Assuming a figure of US$16/tonne for earnings on 1,260,000 tonnes production would give roughly US$20 million in earnings. Using US$18/tonne would give roughly US$22.5 million in earnings.
The chrome production from the recent contract according to the RNS should be at approximately 5x the current tolling margin which should equate to roughly US$20/tonne. The initial target of 200,000 tonnes of chrome concentrate would add roughly another US$4 million in earnings (although I don't think we will reach that in the current financial year).
So in total we could well be looking at US$20-25 million in earnings from chrome in a 12 month period, assuming the chrome price is maintained. This is significantly more than we can expect from PGM's at current prices.
Thanks Agricore, all useful information. Generally I don't take my calculations beyond revenue and earnings because I don't have that kind of financial background. It's good to know what else to look out for.
Thanks to
Agricore and others . There could be a sizeable impairment this year on the Tjate intangible asset. The discount rate applied to the model of potential cash flows to justify the size of asset in the balance sheet would need to be significantly increased I would have thought. It will not have any impact on the cash side though. There may well be be a new broom sweeping clean approach from the new chairman.
Hi all,
Below is Jubilee's depreciation policy. Straight line (which means a fixed amount each month) and the key part is "Plant & Equipment". While I agree in theory that as output increases the apportionment gets lower, I also think the 3-8 years bit matters. In other words as output increases then potentially the lifespan of that equipment shortens (from 8 years towards 3years).
Think of Parker Schnabel on Goldrush who by turning up the speed of the conveyor, that belt breaks more easily.
For the purposes of estimating, in the absence of any specific guidance (I can't see any in the 2022 accounts) I'd treat plant & equipment as a semi variable element (50% fixed at 8 years, 50% variable down to 3 years)
Also you need to think about "impairments". Whilst this can be intangibles in JLP's case it can also apply to equipment (I read in their notes). There were no impairments in FY2022 but there were in FY2021 (of £0.45m). Impairments is where the depreciation policy has been too conservative. For example I estimated the conveyor would last 8 years and it's now 6 years old and needs replacing 2 years early. That's an impairment of it's remaining 2 year value.
POLICY:
Depreciation of plant and equipment is calculated on a straight-line basis using rates which are designed to write off the assets over their estimated useful lives as follows:
Buildings 20 years
Plant and equipment 3 – 8 years
Furniture and fittings 10 years
Motor vehicles 5 years
Computer equipment 3 years
Thanks Nelson, that makes sense. I’ve always found accountancy to be a bit of a black art… maybe I should take a course!