Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Jonah58, I agree that this cobalt plant seems like a pilot operation. Although, 1.2k tonnes is significant! However, it may also hold a benefit from a bank finance pov.
The main positive from the update was JLP have shown they are actually able to produce copper at scale. If they can do this for cobalt by Q3, that means any bank can look at the Leopard revenues (including cobalt) as much lower risk. Before this update, they were pretty high risk. No bank was going to say "oh ill lend to you based on future revenues that you say you can achieve with no evidence, even though recovering metals from tailings dumps isn't straightforward and many have failed before." Now, they can lend based on sizeable EBITDA from Inyoni, and Southern copper operations (including this extra Cobalt), with the comfort that this operation will more than double when JLP utilises an already developed method of Cobalt and Copper extraction at Leopard. Seems all of this makes any future equity raise unlikely. (In fact, JLP should be able to fund both the Northern copper strategy and new Eastern Limb plant from debt and current Inyoni and Sable cashflows.)
Homeytheclown, for me this was a big plus from the update, contrary to there being no good news. Given that Inyoni is now secure, and reliant on multiple long term feed agreements from different reef types, JLPs PGM cashflows are entirely de-risked, again hugely reducing the risk for any bank that wishes to finance future expansion. The reliance on one provider and limited reef-types before made bank financing based on the PGM operation impossible at reasonable rates.
I am a bit confused about cobalt from Sable. I am inclined to agree with Homey that this is likely to be pilot operation. My understanding is that the Roan material contains little cobalt and we will therefore be processing Northern strategy material, but this is not preconcentrated and is subject to joint venture agreements etc. Will we be trucking down raw tailings from a dump in Kitwe 200+ km to the preconcentrator at Sable before extracting the cobalt (and, presumably the copper too)? Alternatively, will we take the material about 60 km to the Roan concentrator, and then truck the concentrate to Sable?
In any event, I agree with everyone here that the definite entry of cobalt into the pipeline is exciting for the medium term if not in the immediate future.
NorthernShark
Yes, the cobalt circuit was good news and I said that. As I said before the cobalt circuit is most likely a sandbox environment to refine their processes and not a commercial operation at this stage. JLP will need time, maybe a year to determine the optimal process to extract cobalt when the Northern operation kicks in. Leon even implied this strategy during the Proactive interview. I don't expect any significant cobalt revenue or earnings for another year or two and even that is not guaranteed. Let's hope JLP pull it off.
Homey, I am sure there will be a ramp up phase as with all operations but the fact we will be producing cobalt and proving the solution before the northern strategy completes is good news I am sure you will agree. Coupled with the fact it is a by-product the processing costs will be low.
Also, I am not sure why they would have a capacity unless they were going to fill it! Just spreads the fixed costs of the refinery over a broader production base = higher margins.
Timing on when the various revenue streams will hit are still a little unclear I agree. However, hit they will and most here are happy to see this story play out. Don't look at the road, look at the destination!
ATB
Northern
gotreal
This is why I post here, because posters like yourself see a cobalt circuit with a capacity of 1,200tons/pa and automatically think JLP will be producing this amount in the near term. Anyway, don't let me lure you away from Fantasy Land, I am sure it is pure bliss there.
If that's a modest amount, can't wait for the Northern production figures
1200t / an is a modest amount...but it still equates to $8,000,000 / mth.
Homey, Colin has been in London several times in the last year requesting audiences that I know of. I went to one. The AGM was open to shareholders and well advertised. If you was genuinely concerned I’m sure you would have gone to the top and voiced your opinions. Rather than trying to convince on here you are a caring shareholder amongst your disruption discrediting and total negativity.
MikieSunday
I have never insisted to only go by written publications. You are thinking of somebody else.
I am desperate? I am not shorting JLP, I posted my long holdings a while back just to stupidly prove that I am long but I suppose that wasn't good enough. I have been posting on here about JLP for since 2019 mostly in a positive light as the share price was low, potential was high and the shares on issue were reasonable. I think JLP is currently reasonably priced given the opportunity and risks. I have never ever said JLP is overpriced.
I don't need to discredit JLP, they do a good enough job of it themselves. I accompany my comments with detail and facts, focus on that rather than my "boogeyman agenda". Most people on here don't bother to go into the detail, they are dazzled by the prospects of massive revenue streams without a care of timelines, costs and capital outlays to get there. I argue for balance because all I see here is most people getting excited about prospects and they have little idea of the financials. I will praise JLP when they get it right and blast them when they don't. This is balance.
Look at the scoreboard (share price), JLP is on the cusp of potentially doubling its revenue streams and maybe earnings over the next couple of years and the share price is stagnant. Ask yourself why and then maybe you will understand what I am posting about. I know why the share price is stagnant and if JLP had a normal investor relations contact I would be giving them an earful.
If you want to find a shorter... just look under the nearest snakes belly! :-)
Homey, I find it very strange in our numerous encounters in the past you have insisted you only go by written publications issued by the company and now I find you arguing your case with facial expressions. You appear to becoming more desperate in your reasoning. You argue the case of balance, yet you are only negative and encourage other posters to be negative. You are even more negative when the board is negative! You obviously have a short trade on at present and are desperate for genuine posters to engage with you in a bid to promote more negativity. In my view this sort of behaviour is diabolical. There are genuine investors here, looking to build futures for their families and themselves. There is a credible company here with an exciting future that I trust implicitly along with most other shareholders. I believe the recent resolution passed with 96% of the vote. No matter how much you try and discredit the company, you will not be able to stop the avalanche of earnings about to come our way. The cobalt must be really gutting you. A few of us hoped the cobalt would make its way to sable, but 1,200 tonnes a year at this early stage, wow what a surprise! No matter how much dribble you write you will not stop that and the resulting money will swell the bank accounts. As Leon has stated it doesn’t take much more to produce the cobalt after the copper process. At $81k per tonne they can afford to transport it in chauffeur driven bentleys and make a handsome profit and it starts in July.
SeisNav
Listen to the proactive interview, Leon says "modest" and note his facial expression. Do I have to spoon feed you anything else?
HG,
That is a VERY valid point. I had forgot about the Ukraine mention. The projects have obviously met some challenges and I personally are very happy with the timescales that have been achieved.
BB2.
Give it a rest Homey. With regards to the projects, you know enough to be dangerous. Are you a bean counter?
An example of the difficulties they have had in getting Roan operational with the break down in global supply chains. Leon mentioned they had a processing control unit on order from Ukraine. It disappeared in transit to Zambia. The control unit had to be re-ordered with an 8 month lead time . Jubilee somehow managed to compress that time frame. Just one of the many difficulties in getting a complex project up and running. In my view getting Roan operational within the time frame they have, has been a remarkable achievement.
If the cobalt production was going to be modest they would not be bothering to truck material from the North, incurring un-necessary costs.
SeisNav
Don't confuse production capacity with production estimates. During the Proactive interview with Leon (on youtube watch?v=nWR1NBvsnzU&t=1s) Leon states the cobalt production will be modest. Don't confuse revenue with earnings. My take on the cobalt circuit is they want a sandbox to play in to get ready for the Northern operation. So the cobalt circuit is not to offset production costs.
Contrary to Homeys assertion that there is no production estimate for the cobalt circuit:
“ In addition to the copper refining capacity at Sable, Jubilee has approved the implementation of a cobalt refining circuit at Sable able to produce up to 1 200 tonnes of cobalt per annum. The new cobalt circuit is expected to commence commissioning during June 2022. At current prices of cobalt of c. US$ 81 000 per tonne of cobalt, this exciting project holds the potential to add significant revenues to the Southern Copper Refining Strategy.”
And from Sharehunter2b who attended the General Meeting:
“ The cobalt at sable will be material coming from the northern side until that is up and running on its own. Expect cobalt to start in July”
I think the reason for implementing the circuit now is obvious, because Leon is wanting to offset the extra costs on production. If they are able to produce 100 tonnes a month at a resale price US$81,000 / tonne that’s quite a bit of offsetting! Even if you do have to truck the material to achieve it.