Member Info for 34DegSth

... although, Kabwe (Zambia), would accrue the Full Tax, as the prior history of SA Tax losses to date are only re. SA - so the SP figures would be a little lower - Say 25p, and 8p respectively

Once again, my posts are to Emphasise the Multiplier Effect that the 'H/O Expenses/Costs' have on Nett Profit

Hi Rosewall/Sumoskier

the FOCUS of my Posts were to Emphasise the effect these Other H/O Expenses Costs have as a Multipiler effect on the Profit - Re. the Tax, I think that you are correct, and also didn't know the accumulative sum of the Losses to date re. JMs

My Earnings Calcs were also Forward Looking!

Taking this into account, there probably would be no Tax re. these 2 Examples, thus Elevating the Effect re. the above. If so, then my 2 Examples would be (with Zero Tax for the Period in question):

We’d Much Prefer: Earnings (Gross Profit) = £65m; H/O COSTS/EXPENSES = £10m; Other Costs (ie. Interest, etc.) = £2m; Tax = £0m; with Profit = £53m with say PE of 10X, thus SP = 30.7p

As Opposed to: Earnings (Gross Profit) = £65m; H/O COSTS/EXPENSES = £45m; Other Costs (ie. Interest, etc.) = £2m; Tax = £0m; with Profit = £18m with say PE of 10X, thus SP = 10p

Thx BB

the £65m Earnings example that I used is Only on their Current Projects (incl Kabwe, even with V2O5 prices having dived - hoping that it sets in the $10/lb to $14/lb range) - ie. maximising each Project to their true potential. Add new Projects such as PlatCro FC; a new Cu/Co Tailings Partnership or 2 in Zambia, etc., and then the Earnings/pa should move way past that figure

As per my posting, I also think that the 'H/O Expenses' won't increase that much, and see my 1st example materialising (nice Profit, with a Healthy SP) - ie. Interest Pd shouldn't increase much, cant see HR costs rising much more, etc.

The 'Other H/O Expenses' that I've used in my '1st Example' already carries a substantial increase in these Expenses/Costs (the 2nd Example carries a MAMMOTH INCREASE, so highly unlikely) - ie. 1st Example -> rising to £10m from £3.278m! so there's plenty of fat built in for an increase in these costs, to illustrate that this Nett Profit (and healthy SP is possible) re. this increase in Earnings

Cheers
34DS

The EARNINGS that Leon refers to is GROSS PROFIT, and Not NETT PROFIT. ‘Nett Profit’ = ‘Earnings’ Less Other ‘H/O Expenses’ Less Tax

JMs ‘Earnings’ re. the 6 Mth Results to end Dec = £4.04m – this Included the Running Expenses at the Various Operations, but Doesn’t include the H/O Expenses/Costs such as (Admin Costs, Interest pd, HR Expenses, etc.)
These H/O Expenses/Costs for this period = £3.278m
Tax for the Period was 0
Thus Nett Profit = £0.762m (only 19% of Earnings)
The important point is that for this period, these Other H/O Expenses/Costs were almost Comparable with the Earnings (Gross Profit), and thus negated most of it!

My take is that as JMs Grow its Earnings (I think that this Growth will be relatively Quick and Large - possibly from the Current £13m pa to say £65m within 18 months), THAT THESE OTHER H/O COSTS/EXPENSES WILL ONLY INCREASE MODERATELY. The Result of which is that Nett Profit should Ramp-up considerably, as per this rapid Earnings Growth – I’ve used an Example to Illustrate this (specifically look at the Different Effect that the ‘H/O COSTS/EXPENSES’ have on these 2 Examples) :

We’d Much Prefer: Earnings (Gross Profit) = £65m; H/O COSTS/EXPENSES = £10m; Other Costs (ie. Interest, etc.) = £2m; Tax = £15m; with Profit = £38m with say PE of 10X, thus SP = 22p

As Opposed to: Earnings (Gross Profit) = £65m; H/O COSTS/EXPENSES = £45m; Other Costs (ie. Interest, etc.) = £2m; Tax = £6m; with Profit = £12m with say PE of 10X, thus SP = 6.9p

Even with Pt back at $800/oz, JMs Hernic PGM basket price is $100/oz HIGHER than Q4/2018, thanks to heftier Pd and Rh prices!!!

Agreed, the lack of feedback from JMs is a little Deafening (PlatCro PGMs and DCM FC)

The Crux of JMs success, is as per my prior post (22 May) - ie. For the JM SP to Run, JMs Earnings have to Grow at a FAR FASTER RATE than their ‘Head Office’ Operational Costs & Other Costs combined, else these H/O Costs will nullify any further Earnings Growth! – the former should be the case

Makhado Ph1 should be highly profitable - stated IRR of 45% and < 2.5 year payback (R13.75/$ and HCC $165/t, both of which are far better now) Probably an IRR of 55% with just over a 2 Year payback now - hoping that this includes the Trucking costs

2 Concerns though:

1) Raising $20m Debt and $30m Equity to Finance the above ($33.5m Capital reqd) and Pay-Off $16.5m IDC Loan which is due Mar next year - I would have far preferred them to negotiate this IDC Loan extension, and settle this instead from Makhado Ph Earnings. A $30m Equity raise is some Serious Dillution on a Company with only a $63m Market Cap!!

2) Trucking 2Mt/pa of ROM to Vele (170km round trip) - agreed, MC had no choice as too costly to build this facility at Makhado in Ph1 - hoping that the cost thereof does not eat too heavily into the Earnings. Hoping that some of this distance is covered by a Rail-line

Profit = Earnings LESS (Head-Office Costs) LESS (Other Costs) LESS (Taxation); so Earnings is Definitely NOT Profit

Eg. Re. JMs 6Mths Results to end Dec2018: Revenue = £8.3m; Earnings (Gross Profit) = £4.0m; H/O Ops Costs = £2.7m; Other Costs (ie. Interest, etc.) = £0.6m; Taxation = £0; Profit = £0.76m

For the JM SP to Run, JMs Earnings have to Grow at a FAR FASTER RATE than their ‘Head Office’ Operational Costs & Other Costs, else these Costs will nullify any further Earnings Growth! – the former Should be the case moving forward

Example (using Full Year to Dec 2020 as an Example):

We’d Much Prefer: Earnings (Gross Profit) = £65m; H/O Ops Costs = £10m; Other Costs (ie. Interest, etc.) = £2m; Tax = £15m; with Profit = £38m with say PE of 10X, thus SP = 22p

As Opposed to: Earnings (Gross Profit) = £65m; H/O Ops Costs = £45m; Other Costs (ie. Interest, etc.) = £2m; Tax = £6m; with Profit = £12m with say PE of 10X, thus SP = 6.9p

No Kalan, havn't been so fortunate! Really hoping that someone will post it. and hope that its very recently been updated

Even without it, I'm massively upbeat - Earnings by year-end should be SUBSTANTIALLY higher, and far higher in 12/15 mths, just on the projects that Leon and team have already announced and are busy with

Plus Zambian Cu/Co Tailing's Project(s) could be massive, FC elsewhere, etc., etc

I have no problem with Shard sending their Broker's Note to only their customers – what I do have a problem with, is that their latest Broker's Note contains information and detail that Shard have obtained from JMs, of which is NOT available to all shareholders!!!

A very nice polished and massively encouraging presentation! Contains many missing pieces of the puzzle – I particularly like:

(4m34): ‘the Earnings from PlatCro alone for this Q, is already challenging the prior Q’s Earnings’! Wow!!!

Known: JMs Q4’s Earnings was £2.2m PlatCro was Profitable from 31 Jan (7m33) PlatCro Delivered Earnings of £0.9m (7 Jan – end Feb)

Therefore: from this, one can deduce PlatCro’s (March & Q1) Earnings (Coarse CrConc only), of which is quite astounding!!

Agreed, ON THE PROVISO that the Earnings Generation TO JMs re. the GLR mined material EXCEEDS the Earnings Generation TO JMs re. their own (92% owned) Kabwe Tailings

- as such, the GLR mined material would have to be of Exceptional Grade, with JMs Also Earning quite a High Percentage of the Total Earnings re. this GLR material - else, I doubt if Leon would be interested

Also agree that this would extend the LOM at Kabwe by many a year

JMs have never committed to a specific Quarterly Release Date. The size and complexity of JMs NOW is far larger than last year, and its reasonably obvious that the gathering of information and complexity thereof must be rather sizable and challenging.

In addition, all of JMs released news the last 2+ years has been positive, especially Leons very upbeat comments of late - so there should be nothing to fear!!!

a Repeat of My post from 23 April

JMs Original 'Agreement' with BMR is such that JMs Hold the FIRST RIGHT TO, but NO OBLIGATION to Process any ore from Star Zinc. The terms of such a potential future processing agreement is yet to be agreed

As such, any Zn 3rd Party Ore would need to be of Exceptional Grade to compete with JMs Tailings value, as JMs Tailings is also (apart from the Zn & Pb), rich in V [of which Zn Star does not seem to contain?]

Hi BrMyRew

JMs 'Agreement' with BMR is such that JMs Hold the FIRST RIGHT TO, but NO OBLIGATION to Process any ore from Star Zinc. The terms of such a potential future processing agreement is yet to be agreed

As such, any Zn 3rd Party Ore would need to be of Exceptional Grade to compete with JMs Tailings value, as JMs Tailings is also (apart from the Zn & Pb), rich in V [of which Zn Star does not seem to contain?]

Cheers
34DS

PS. Q1 Update tomorrow (Wed 24th)??? - containing news of the Build of a large FC Plant at JMs own PlatCro (2X - 3X the Processing capacity of DCM FC??)

Hi MH

August is within 4 mths from now, so my take is the 2 Projects in next 4 mths are PlatCro PGMs, and Kabwe - agree WOW, Kabwe 'on-stream' only 4 mths from now!!!, unless we heard wrong

My take/guess re. the 3rd fully funded Project (Note: no time-frame given by Leon re. the 3rd Project!) would be say PlatCro Fine Chrome - they have ~ 7mil pounds of cash available - my take is that PlatCro FC will be ~ 2X to 3X the size of DCM FC, with that costing 3.2 mil pounds OR it could be the Kabwe S2O4 plant Expansion, of which i thought was already operational by Glencore - my take is that JMs wiil expand this to carry on supplying Glencore and to meet their own Kabwe needs

Hi WOBF

Yes, a little frustrating - I'm in most cases against Dillution, as its effectively a 'Loan' for the 'Life' of a company - can however, in some cases be negated by Share-Buy-Backs, but by the time a company has enough free cash flow to do so, the SP is many multiples of when the D occurred

Re. the last 2 instances of JMs Dillution, it could turn out to be masterstrokes by Leon & co

1) Re. D to acquire PlatCro - with the info that JMs have released to date, PlatCro COULD be massive, and in my opinion, one of the outstanding pieces of detail remaining is the 'Proof on the DCM FineCr Yield' - we'll see in Q1 - IF DCM FC can Yield 8t from 25t Per Month, then PlatCro FC would prob have a similar FC Yield (ie. ~ 1 from 3). This Yield will then be 150% more than the CoarseCr Yield (1 from 4.5) - if then PlatCro is stepped slightly up to say Process say 80kt of CC pm Yielding say 17kt pm, then a similar sized FC plant at PlatCro to the CC plant, processing the same 80kt/pm, will then yield 25kt pm, equating to 17kt (CC) + 25kt (FC) = 42kt/pm, from the 'same' 80kt processed - thats then Massive, and thus clearly vindicates the Dillution to acquire PlatCro

2) the same can be said re. JMs second large D of late - re. Kabwe

Still Quite a few unproven IFs though!!!!

Some good points

I'm personally ok with the 'limited' info that Leon and co provide, as one can piece this info together to obtain a relatively clear larger picture.

HOWEVER, this is fine, as long as Leon does not 'go-back' and later alter some of the detail that he's provided. For example, based on this info recently provided, one can calculate ~ 54kt of CrConc for Q1. IF when Q1 is released (next week?), and this is far short of this, then this entire premise falls flat!

Based on what JMs has relayed to the market:

Q1 CrConc Prod of 54,000t vs Q4s 9,000t

mid-March, Leon stated JMs produced 63,000t of CrConc the last 6 months; and JMs reached full target FC Prod at DCM in Mar. Therefore last 6 months = 9kt at DCM re. CoarseCr (9kt Q4, 0kt Q1). DCM Q1 FC would most prob be 12kt (6kt Mar, 4kt Feb, 2kt Jan, with full 8kt from Apr), with Balance of 63kt for PlatCro – ie. 63-9-12=42 (ie. 10kt (7-31 Jan); 14kt (Feb); 16kt (Mar?) - based on 63kt number, I’d guess that the Eskom power issue did not have that great an effect as at Hernic

Q1 PGMs (only at Hernic for Q1)
Based on Leon’s comments, Q1 affected by: Eskom Power Failures, late Jan post-Holiday start, once-off Ops Costs payable only in Q1 thereby raising the Unit Costs (Q1 higher than Q2, 3 and 4) – Positive side will be the dramatic incr in PGM Basket prices - Eskom power problems only over by mid-March, so March Prod also affected. As such, Q1 PGM numbers won’t be great. Q2/2019 should however revert back to the +ve Growth trajectory, very much boosted by higher PGM prices, and greater prod than Q4?

What should be apparent from Q1, should hopefully be the glaring potential of the Fine Cr and PlatCro (CC & FC) – my take is that Leon will move very quickly re. Constructing the PlatCro and Hernic FC plants (hopefully from Csh/Earnings), with hopefully interest shown elsewhere by other Cr miners for FC. I’m also of the opinion that the PlatCro FC plant will be far larger than DCMs FC (3X?), with Hernic being say 2X – 2.5X - lots of CrConc tons to come from FC!!! PlatCro will also contribute largely (CC & FC) - not impossible for Q2/2020 CrConc Prod to be >= 150,000t (excl Hernic, of which will be interesting to see how JMs benefit re. the FC)

Quite weird! Only 3000 shares traded to push this up from 900 to 1300 - an uninformed buyer, or is there news brewing - based on the limited number of shares traded, I'd say the former??

The Live/Current JSE Bids/Offer are as such:

Bids (Buyers)
1250, 40
900, 300
800, 3000
703, 3000
700, 25000

Offers (Sellers)
1250, 5000
1280, 7002
1292, 200
1298, 1350
1299, 3000

Note the Next Bid to Buy is only 40 Shares at 1250, with next Bid of 300 shares way down at 900!

Agreed MH - some ADVFN Posters have access and are referencing the latest BN (re. end Mar/early Apr updates) - I take it that they are not Shard Clients, and have thus accessed it elsewhere - eg. Kabwe 2021 numbers that exceed Leon's latest talk/RNS Kabwe Prod numbers, etc. - hence was hoping that someone has a link i the interim(ToT etc)

In SA, the Eskom forced Load Shedding ended 3 or so weeks ago, thus Hernic March Prod should also be partially affected - Leon was implying that PlatCro (Coarse Cr Prod) & DCM (FC) were not affected?? , with DCM FC reachiing target Prod in March Very very keen to see the FC numbers