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Demand for Chrome is forecast to rise by a multiple of 5 due to the increasing demand for stainless steel in China and India. It is unlikely that the price will soften. The "finance bloke" has had no say in the matter. The diversified metals strategy was put in place many years ago by Colin and Leon and we are now about to see the payback on all of the time and capital invested by the company and institutional and private shareholders that have supported the company through this time.
After 20 years of being in and out of JLP I'm in no doubt how we ended up hrre. Colin Bird seeking out disparate opportunities and chancing it. There was never an ovrrall strategy. 3 cardbrag and oldrongo have been around and seen the false promisses and massive dilution and abandonment of yesterdays great opportunity. Tjate, Conroast, Middleburgh pgm with chrome on the side, fine chrome recovery etc. Through it all JLP survived and had a moment in the sun with Tjate and again due to the pandemic. The chrome sideshow has been seized upon by Leon and it's saved even more dilution. The move to copper is the first clearly thought out long term plan. It utilises all Leon's experience and coupled with the fortuitous chrome price could and possibly should finally transfirm JLP into a serious player. The financial bloke sees the picture and is adding discipline to the duversification that happened by the grabbing of oportunities. 3 cardbrag is right to ask how it happened with reference to chrome. It was fortune that favoured the brave. When we get over the short term hurdles, a couple of months to go. JLP will become an overnight success, 20 plus years in the making. We hope.
Yes, ‘things’ can change Kalan. This is the sort of insight which draws me daily to this board. The price of chrome could drop, though there is no sign of it yet and demand , especially from India, remains strong.
I suspect the investors who will be disappointed by copper production in the next set of figures will be precisely those with unrealistic expectations.
I think you will find we diversified in multiple metals some time before the financial bloke (Nicholas Taylor I assume) was appointed.
Perfectly sensible question 3 card brag. Chrome will become even more profitable from here on in. The two new modules will increase oriduction and there will also be economies if scale. On hrime we di need to be aware of costs. Fuel costs went up 47% last year and chrome accounted for 93% of that usage. Leon is happy that margins will increase but things can change like they did with pgms. The finance bloke is keen on duversifying metals for that reason.
Copper will become as profitable as chrome but not yet. If there is to be a disapointment in the next oprations update, due soon. I think it will be copper priduction as Roan is only running at 40% of capacity at the moment.
"...his foresight is now paying dividends."
Dividends? Did I miss something? 😉
3card, I have been a JLP shareholder for quite some time and you are wrong about Chrome. Leon was banging on about chrome years ago and his foresight is now paying dividends.
OD
I think you need to check in, check back and read before you start asking daft questions. Any of the recent interviews will answer them.
Yes it's much more profitable now, for two reasons.
First they are moving away from fixed margin tolling agreements which guaranteed something like US$4-5 / tonne for most of the material processed and moving into own sourced RoM where the margin is much higher currently something like 5 times the tolling rate.
Second the price of chrome concentrate has doubled in the last couple of years.
What has changed with chrome? Admittedly volume has increased exponentially recently but a few years ago we were being told that chrome was almost a by-product with little or no value to enable us to get to the more profitable PGMs.
Now it appears to be the mainstay of the business. I accept that PGM basket price is bad but we do seem to be getting a completely different narrative on chrome. Is it now much more profitable or are we being busy fools while we wait for the CU production ramp up?
When PGM's were strong, the company was a PGM producer with chrome just being a means to get to the PGM's. Now PGM's are no longer strong and chrome is flying then we are a chrome producer with PGM's as a by product. It's just an about presenting the company in the best light for potential investors. Being seen primarily as a PGM producer is obviously working against Jubilee at the moment but strong chrome numbers in Q3 will hopefully start to change that.
PGM’s are mentioned in the interview. They are a spin off from the chrome and JLP still makes money from them because of its low cost of production.
Did anyone else get the feeling that Leon was trying to distance the company from PGM’s? I can’t recall them being mentioned in the interview.
I am still no more informed on those new warrant shares of 22,279,492 issued on 7th Nov 2023 at 7.14p with an expiry date of 7th Dec 2025. Leon clearly indicated to Charles Archer that the outstanding warrants were old ones issued some 3 years ago, he didn't appear to acknowledge in his answer these recently issued new warrant shares.
However, Neil Reynolds via Investor Relations has confirmed to me the following "Regarding warrants issued on 7 December 2023, these expire on 7 December 2025. Furthermore they comprise a nominal proportion (0.7%) of the total issued shares. The Company is required to report on the number of outstanding warrants and share options during key reporting periods such as the interims and final results as an AIM listed entity".
So we still do not know why and to whom they were issued, as both Leon and Neil will not directly answer this question at this time. Maybe they are related to the Waste Rock Project with IRH and are unable to answer this question until this deal is completed, which hopefully will be in the next few weeks.
@SeisNav Is it not allowed to discuss warrants? Shareholders might be interested how they get diluted without telling them.
Was good to hear almost all the questions I wanted answered.
I feel Leon answered them honestly and when he started diverging Charles put him back on track.
My only quibble was Leon was unable to answer the first question with a definitive YES about Roan been commissioned by end of April. It was Charles that had to get him to say Yes and even then it was very faint yes and maybe why the share price is low.
BUT it's understandable as there are many moving parts in the upgrade and no one can be 100% sure it will be up and running by end of April.
I'm very bullish and hopefully the market will wake up!!
The South African investors at this stage seem to be a lot more astute than London investors but the company remains undervalued on both the LSE & JSE
The Charles Archer interview is well worth 30 minutes of your time. They conclude that JLP has reached an inflection point. The rapid growth on all fronts is going to be reflected in the financials. As a long term holder of JLP I am convinced 2024 will prove to be a transformational year for JLP as copper kicks in to follow the success of Chrome which continues to grow at pace and is very profitable.
As Seisnav told me it's just a pull back after the 20% rally...
Thanks for educating me... although looks like we pulled back a bit to far??
In case you missed it:
Https://audioboom.com/posts/8478147-midweek-takeaway-with-leon-coetzer-ceo-of-jubilee-metals-and-charles-archer-long-term-ftse-aim
Interesting that Leon is not trusted by so many shareholders .I agree with Jonah that if I was in Leon's shoes I would certainly not be making optimistic claims so I now believe he is now telling like it is.
There was much to like about what he said, and I for one believe that it is only a matter of time before Jubilee becomes a billion dollar company. You pay your money and make your choice.I know what I choose !
P.s. Jonah, I think you misread my comment about a lot depending on IRH deal. I was specifically talking about the long term value of JLP in response to Bluebelly's post, not the short term. Roan front end and then we switch attention to Thutse 1st Module. Delivery, delivery, delivery.
Listened to the podcast. very good interview I thought. Seisnav is right that IRH is a couple of weeks away in terms of "an update". So Bluebelly can relax about his upcoming investment being after an IRH rns.
Agree with all of Oldrongo's positives below.
Two points from Leon's answers which stood out for me having listened to him for many years:
He did not say placings are at an end. He said he looked forward to Zambian operations being self financing in the same way as South African operations are.
Secondly, he fudged the warrants issue. By chance, this morning I was on the school run early and had an hour whilst the gandkids woke up and searched out the warrants and, what Leon didn't say Oldrongo was that these are the outstanding warrants and they are not time lapsed or all at 13p. They aren't of immediate concern but I've got them jotted down:
22 July 2024 750,000 at 3.4p - small no worries
19 Nov 2024 7,818,750 at 4.13p - similar to the recent options.
26 July 2025 750,000 at 3.9p - again small.
7 Dec 2025 22,279,492 at 5.2p - significant but a way off.
21 Jan 2026 4,036,431 at 13.2p no worries.
In addition there appear to be 23,964,491 options which I can't find a price or timeline for - significant.
A massive positive, which I wasn't across, I have to admit, was that one of the Thutse modules should be running by End of June. reduces capex and increases income from that point on which helps my own, much derided, definition of cash flow.
Overall, very rosy long term, strengthening significantly in the medium term, short term - better news to me at least on chrome, Roan will not be fully operational by end of April (listen very carefully to what Leon said), warrants and options are an issue but not immediate we hope, we are likely to have another placing or two for Zambia (good or bad, you decide, right or wrong, you decide).
Overall very positive, with caveats.
Jonah, your last sentence "FWIW, I believe the IRH project's most valuable outcome is going to be a demonstration to the industry of what we can achieve and hence unlock the potential for future, more lucrative deals." is 100% spot on.
Agree Seis. I am not under any illusion that Sunday Roast interviews are little more than a choreographed charade, but Archer pinned Leon down to saying news on OB1 project will drop by end of March (subsequently modified to 2 weeks) and Roan still on target for comissioning and ramp up by end of April. He also said Sable would be at full capacity in a matter of months, not years. When pushed on Chambishi, he hinted we were looking actively for increased processing capacity, but this could be in the form of partnership. Current warrants are largely historical with exercise prices double today's Sp. Thutse upgrade - first module within two and a half months, I think. Munkoyo is on schedule.
After all the delays and disappointments, I don't think Leon can afford to say these things unless he is confident in delivering.
I disagree with Kalan that 'much depends on IRH deal'. In terms of revenue, this is going to take time to come through. Yes, any undue delay will affect sentiment and thus short term fluctuations in Sp, but we Roan and chrome upgrade are our immediate priorities. FWIW, I believe the IRH project's most valuable outcome is going to be a demonstration to the industry of what we can achieve and hence unlock the potential for future, more lucrative deals.
Very good interview, good to hear Leon being asked more probing questions by Charles Archer. It sounds like another week or two before we start getting more news flow from the IRH deal.