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Ardbeggar, the small miner situation is unbelievable. Jubilee can cherry pick one at a time. Set up a partnership arrangement with a buyout guarantee. No upfront costs till Roan and Sable are full. Then they will have to start building modules like they are going out of fashion. Its utopia. Better than i could have dreamt. Looks like theres no competition either in that sector as much Leon says its much overlooked. Theres over 3,000 small scale licences. Leon has identified 50.
I think I get it now.....I've looked into the small miners a bit and here's my thoughts. Please any experts correct me if I'm wrong.
Mikie, it says in the last project update that they are buying controlling interests in the mining operations. It's still a partnership type operation but one where Jubes hold the controlling interest/power. It's interesting as it also talks about capacity, and clearly the IRH deal will provide enough capacity for, as it's stated, 'at least 4 Roan size modules'
So if that's the case it looks like it's very much a repeat of the Chrome operation expansion, where at the start it's joint venture stuff in the main being produced with IRH where we get a cut, but as we spend the $ we are making from this to buy these small mining operations and their reefs/dumps that they are aiming to buy in locations close to the modules we build, we will increase the % amount of Copper that we own from ground, through processing and refining, to the point of sale.
Look at the Chrome margins over the last year to see what happens when our % of self made product increases towards and beyond the amount of fixed toll processing for other people.
If they can expand at a similar rate to Chrome, i.e. from virtually nowhere to 2m tonnes in 4 years, then sky is the limit. Buuuut, with the added cash they will have from Chrome being available to either expand Chrome or Copper depending on where the most money lies without tapping shareholders or having to wait between building modules.....the speed and scale could be quite astounding.
I kept saying on here that given margins for using your own material it would make sense for us to get into that for Copper as well as the IRH deal....well looks like the IRH deal is the security and base cost provider for us to do just that with these small miners.
If this is totally common sense and known to everyone already and I'm a numpty that didn't see just what this small miner business was about till now then sorry. It's just been a lightbulb for me.
He does say all in costs of less than $6k per ton (current costs are around $4.5k). What he means by all in I don't know maybe they are offsetting others costs in there or maybe he is just being conservative.
When I worked out my copper for next year I based it on a gross margin of $3.5-$4k per ton if we hit that whatever the selling and cost prices are I will be happy.
I was going to ask that very question Edzi (I'm with you all the way on the tinnitus front!) There have been some helpful speculations about what Leon means by all in costs, amortising the capex of the modules and purchase of mining license etc. Another possibility (not Munkoyo) is that we are setting up some joint ventures in which the mine owner is essentially a sleeping partner and is paid a royalty which must be added to the processing costs of ca $4000 to get the 'all-in' cost
In any event, I sincerely hope we have ordered a job lot of electrical control gear!
Why didn't Tweedle dee and Tweedle dum ask Leon if the fuses arrived yet? So much ambiguity with this company.
Hang on a minute, is this more bloody shenanigans where the goalposts have moved? the cost mentioned has always been less than 4K so where is the 6K coming from. This is another reason the price will not budge because there is still so much uncertainty. Uncertainty over IRH, uncertainty over Cu production cost, and uncertainty about when the Roan facelift will be completed.
On the Roan front, it seems odd to do a visit on a partially working site. If the fuses haven’t been added yet, what’s the point? Much better to RNS and visit so the detail can be drawn out?
Looks like they are building the right to buy each mine into the contract, but before they take that up i guess they pay a rate per tonne.
My take on Leon’s cost of copper production is that cathode is c$5000 per tonne ie less than $6000. Copper in concentrate is c$4000 per tonne as often mentioned when discussing Roan when fully ramped up. As often happens in these Roast interviews no one makes it clear what specifically they are talking about.
Thanks Guys
I would love to have a better understanding of the costs as it makes an enormous difference to the margins.
I can understand that they are probably going to amortise the cost of buying the rights in on the production costs but that type of thing falls out of the bottom pretty quickly as does the costs of the units.
Yes, i noticed that number too. Definitely below$6,000 and i think he said all in. So i am guessing they are having to build in a purchase cost from the small miners. Still a very healthy margin, especially when you think a few small miners combined equate to a large mine! The cost of a large mine would be in comprehendible. This is incredible business and one that can be built one module at a time. My guess is we will be selling a lot of copper in solution.
Yes I noticed that number Edzi, although what he actually said was they had informed the market that all in costs would be below US$6,000 / tonne. I don’t know if he misspoke but he has certainly mentioned less than US$4,000 / tonne in the recent past. The number in the H1 report was US$4,554 / tonne and I would expect that to come down as Sable becomes fully utilised.
It certainly was. So dinosaurs then Mikie, Supersaurus and Barosaurus. Not sure I am ready for those heady heights just yet again.
The small mines (50) would require a bit more capital outlay as they would be too much for Sable so we would need to build more capacity as well as expand sable plus they have option to purchase the first two. Need a bit more meat on the bones for those before I get too excited but it does look very promising.
The ducks are starting to line up.
Hi All
I trust most on here have listened to the latest Sunday Roast podcast with Leon in South Africa.
May I ask if anyone picked up on the following, the reason I ask this is because I have severe tinnitus
and hearing loss and I have listened to the start of the podcast twice and think I heard the same thing.
They were talking about Roan and Copper once it got up and running and Leon said that the costs of
production for one ton of Copper would be $6000. I would like others to confirm this as I always thought
that the costs would be in the region of $3800 per ton ounce fully ramped up to nameplate capacity
Can someone please confirm that I miss heard. Many Thanks
Crikey, that was a while ago now Gray, but you know, i think the opportunity just in the small mine space, could dwarf the Elephants, on sheer volume of licences and grades! The grades are going to be so much better. Taking a combination of the elevated copper price, relatively low infrastructure cost of a module is going to allow a fairly rapid rollout. We are seeing a fairly rapid rollout in chrome now. Leon stated the next project is being prepared as the number of modules on Thutse increase. Free cash flow from here is going to increase. But the rewards in copper are much greater. Which will result in a much greater effort from Jubilee as we can now see unfolding. They have identified 50 small mines! My new buzzword is challenge 50, because if they get close to that figure, you can forget 50p, it will be much higher!
Also I do like your insight into trading and where you think the highs and lows are keep posting that if you don't mind.
Yes didn't post much. Lost interest when the tailings struggled. I was never in it for Tjate always thought that was a bit of a pipe dream with Colin's hype but liked the pgms (conroast lol). I tended to be in oil and gas back then JLP was my first foray into more solid minerals and then built up over time with copper.
I remember when all the elephants and leopards were flying around me and MIkie talking about 50p a share maybe more of course there were a lot less shares in issue then. Never traded on aim as sentiment can play a huge part. I have been on the right end and the wrong end of that. Good luck to you on trading charting does have its place and you probably benefitted from it more often than not.
About 5k tons per year from each of them by my understanding. At least 2 signed already and 40 odd more to go. That is a lot of copper.
Didn't realise you'd been around that long Gray1. Maybe the length of time gives us Long Term Sufferers a different perspective.
In the here and now, the inevitable pullback that Frogkid foretold looks like it's over, a close above 6.8p would be a nice solid finish, opening up the prospect of more gains in the near term.
Been in since the Middleburg days too. Its been a loooong time.
Middleburg, now you are going back!
Yes been a long time and highly educational. Got quite good at reading between the lines for example. JLP has always been an opportunistic company, I liked Leon's Sunday Roast interview where he said they were now PLANNING to be opportunists in relation to pgm,s. Stocking various grades of material and choosing which to put through depending on the market price. Sort of Colinesque at the root of it with Leon's need for control stamped onto it. We'll have Tjate up and running soon, taking the Merensky Reef first, powered by Power Alt at Middleberg lol.
Hi Kalan. Yes it has been a long time in here for us both!
Yearly chart 60% sure we have had another low put in- will check at close of play today.
Weekly chart looking positive, technical barrier to watch out for is a move above 6.77 which IMO would indicate we are on the up again. Finished buying now - the weekly chart convinced me to take the gamble. Not suggesting others follow suit, the smart move would be to wait and pay above 6.77p after confirmation. (Averaged in at 6.6p on the nose - happy with that.)
I bow to your superior knowledge Ardbeggar on the Framework agreement. The way I look at it is Roan is the key to all of JLP's short term future. Success brings reduced costs, more income and removes the ability for IRH to pull the plug (if I'm reading you right).
(Not sure who realgit is calling a johnny come lately Frogkid - you or me, but we've both been here 3 times as long as he has!!! Wish his mum would let him go out and play for a bit.)