this depressed platinum price actually good for JLP. this will close down many deep mine which are expensive to run (and in turn reduces the supply to the market). the one will make money is tailing dump/surface projects which has very low cost (around half the price of platinum price) and hugely profitable at current commodity price.
JLP has two huge surface dumps :) targeting 40,000 ounces per year with cost around $400-500 (compared with platinum price of $950)
Lonmin, and other platinum producers are in deep shaft mine (huge cost and labour intensive) while JLP is focussing on tailing (low cost and profitable), even Tjate mine is shallow mine deep (not so deep as most other mines)
EXCELLENT POST :
for those wondering why Lonmin/amplat etc are cutting cost:
i am sure you are aware, those in JLP and especially those who have done their research, are well aware that platinum price is depressed and at the bottom. Lonmin, aqp and many companies are in problem and are cutting cost etc.
so what make JLP so special? JLP is in tailing dump/surface projects which are very low cost (hopefully you do know what is "tailing dump" ) and this low cost project are very profitable even at low platinum price, even more so when platinum price increasing next year, as expected by many analysts. this project also not labour intensive.
many platinum producers such as Lonmin, Amplat etc are mining in deep mine, down 3000m deep underground, hence huge cost are required. obviously for some deep mine, its not profitable to mine at current price. they are also labour intensive and are affected by strike in SA etc.
however, JLP tailing projects which are low cost, are so profitable that several banks already confirmed to part financing these tailing projects. now waiting legal sign off (see webcast)
in addition to tailing project, JLP also has Tjate, which has huge NPV of around 1.6bn. the good thing about Tjate is its not as deep as other existing mine. you can start mining as shallow as 600m deep (see JLP website)
Leon already confirmed they are in discussion with several parties interested for JV of Tjate, not surprising as i am sure Amplat (for example), can see Tjate will be even more profitable (shallow mine compared to other deep mine) then their existing mature mine. these large firm will not take the risk doing the JV with JLP now as we still havent got the mining licence yet. However, once we get the mining licence (within days i believe - see webcast), the uncertainty is then removed and hence will make it easy to finalise any JV.