Member Info for ChesterGreen

Drat! My post had capital letters in the right places when I posted it. Sorry.

It should end:

How's that for an optimistic post? CG

i saw this the other day. it’s the sort of thing, regarding future finance, that jubilee will be looking into:

https://www.lse.co.uk/rns/ecor/acquisition-of-producing-copper-stream-8n1myebxnstjdne.html

moxico is a private uk company and has also signed a $100million off-take agreement with glencore, raising $150m in total to produce 56000 tonnes of copper annually. the details of this aren’t important but it illustrates the movement of other parties in the zambian waste rock / tailings space. it would be comforting for jubilee to take time to concentrate on delivering the projects it has but can it afford to do so?

the chat with lootgaloot earlier this week encouraged me to re-read the rns from 17th october 2023 announcing the mufulira **** project (msp) tender award. as a reminder, this will be a joint venture (jv) between jubilee and mopani copper mines (mcm).

“in outlining the proposed scope both jubilee and mcm, in accordance with the award conditions, will establish a special purpose vehicle (“spv”) dedicated to facilitating the jv for processing the **** at the mcm facility in mufulira. additionally, there is a potential for the spv’s mandate to expand, encompassing the treatment of material from tailings dumps and oxide ore sourced from small scale miners.this strategy aims to optimise the utilisation of mcm plants currently under care and maintenance located in kitwe,

over the past 2 years, jubilee has researched the **** to formulate a conceptual flow sheet for metal extraction.

the salient terms of the jv include:

the exclusive right of the jv to access and refine the mufulira ****;

jubilee taking the lead in developing the processing solution, its subsequent implementation, and managing operations;

jubilee will hold the first right to securing finance (for) the project’s capital fpr implementation of the … project, and

the formation of a supervisory board for the jv, comprising representatives from both jubilee and mcm.

if jubilee were looking to tap north american markets (either new york or toronto), might it look to hire a major player like rbc to manage such an operation? might a company looking to do this change its reporting currency to us$? might the company also be willing to trade a small amount of equity (1.7%) for an immediate boost to its cash sales (thereby demonstrating its ability to pay interest and/or debt)?

i think that the deal with irh for the waste rock project (ob1) will go ahead and the msp won’t be too far behind, financed by raising debt. the opportunity to get access to the mcm kitwe refinery, even if through a jv, may be an opportunity that is too good to miss, it may also lead to progress on the “northern” tailings.

neither ob1 nor msp are reelected in the current share price.

i accept that the cobalt part of the project will not be profitable at the current price of cobalt but it might be 5 years before that price recovers.

how’s that for an optimi

Evolving strategy from a company is not a bad thing.

The South African chrome operations started from producing chrome concentrate in low quantities from waste material, in the region of 40000 tonnes. In this financial year, it will be almost 2 million tons. In doing this, the company has moved up the "value chain" to the point where they are earning a higher profit margin from ROM that they buy in?

You're effectively saying that they shouldn't do this and stick to their original plan.

It's the same with copper in Zambia. The original plan was to extract the copper from tailings, the bulk (270 million tonnes) of which was included in Jubilee's Northern strategy. This was based on constructing nearby concentrators AND securing a refinery that was in care and maintenance. Either the current owner didn't want to sell or the price they were asking was too steep. Maybe there were regulatory issues. Whatever, that initial strategy was discarded in favour of expanding the Roan facility (aka the Southern strategy).

Over time, and with many swings and roundabouts, Roan is moving up the value chain of material it is processing. It is not "180 degree opposite strategy" as you put it but a positive progression. Proof of this will, I think, come in the full year figures in October 2025.

The tailings are not gone. The company, with limited capital, is progressing and may well return to them when time and resources allow.

Hope this helps.

G

CG

@lootgaloot

Have you read the copper strategy that Jubilee published in August 2024?

It's on the website.

Perhaps it will give you a better understanding of the situation.

I've only just noticed that Shuka Minerals (SKA), agreed in December to buy the mine which closed in 1994. I had assumed that the historic low grade material that the last RNS mentioned JLP as selling were copper. Maybe they're the zinc/ lead / vanadium tailings they own instead?

More employment in Kabwe.

Hi

I'm a stray Jubilee Metals (JLP) shareholder.

Apart from being issued on same date, I can't see any connection between the two RNSs.

XTR have paid $300000 for some tailings @ $1.15 per tonne. That's 261000 tonnes. JLP have paid $2.7m (in shares)for 200000 tonnes AND the right to buy about 1million tonnes more (for cash?).

No mention was made in either RNS or a partnerships between the two companies.

Jubilee say they are starting to process their material this week having already tested the material. XTR haven't yet.

I only invested in JLP after Mr Bird left, I was in GLR but got fed up with talk and no action. I do monitor the GLR BB still which led to pick up this thread.

I haven't got any agenda but I don't think the two deals are connected.

Cheers,

CG

Hi Dru,

My take on Roan is that there are multiple feed sources being used which have different grades and recovery rates.

I think the new front end module is processing waste rock (from 2 sources - Project Phoenix and Project L) targeting 1.5% graded material but at a recovery rate of only 55%. The designed throughput is 50000tpm.

The sulphide circuit is the milling and flotation plant, I think. According to the diagram, it has a 70000tpm capacity. Again, the target was 0.7% grade at a recovery rate of 80%.

So, my estimation is that the theoretical capacity of Roan as a whole is 50000 + 70000 = 120000 tpm of feed. Where they got 75000 tpm from is running the front end at 35000tpm and the sulphide circuit at 40000 tpm. The increase to 90000tpm was to be achieved by increasing the front end throughput to 50000tpm.

If I'm right, the 520 tonnes per month production is:

(35000 * 0.015 * 0.55) + (40000 * 0.007 * 0.8) = 289 + 224 = 513

Substituting the new feed for the 0.7% feed gives:

(35000 * 0.015 * 0.55) + (40000 * 0.016 *0.8) = 289 + 512 = 801 for an increase of 280tpm.

There are 4.5 months left in FY25. I've read that they will start off at 30000tpm for the new feed. I've increased my projection of copper from 5000t to 6000t.

All the above is of course speculation on my part - hopefully I've been too cautious.

CG

Tempting though it to go it alone on OB1, I think it would be better to proceed with an amended deal with IRH.

The reduction in the price paid from $30m to $18m also reduces the amount IRH will pay into the SPV as their 'equity' contribution, for which they were to get 70%. $18m may therefore only get them a 55% stake, with JLP getting 45%.

If IRH provide the capital expenditure (capex) necessary to build 4 modules, they possibly could be operational in 12 months. As others have said, going it alone would most likely make this timescale longer.

Also, JLP would miss out on a ~$10m payment (reimbursing costs to date). This amount could be redeployed towards further open pit operations.

In addition to providing the capex, which if Roan is anything to go by might include leaching circuits in addition to the 4 modules, operating expenditure for the SPV would also be covered by the IRH loan. This would include a management fee payable to JLP - which might amount to $2m annually.

We will see shortly, but I think a larger stake (more than 30%) of the SPV which might have annual revenue of $200m (assuming it eventually produces 25000 tpa copper units) would be well worth having at this stage of the development. Profits from this could be reinvested in further standalone projects.

I am disappointed that after 13 months we are still speculating about the IRH deal but perhaps another 4 weeks (end Feb. 2025) will resolve this.

CG

Agreed Seisnav.

Couredelion, see the Q1 update RNS. I think the 75000tpm is made up of 35000t of waste rock (@1.5%) plus 40000t of tailings (at 0.5%?).

When Roan reaches 90000tpm it will be 50000t @ 1.5% and 40000t tailings.

BRV,

Thanks for your hard work. Very interesting.

I remember that many of us were disappointed when the FY25 guidance came out at 5850 - 7000 tonnes of copper.

H1 production was only 1454, leaving at least 4400t to go to make the lower guidance.

Lesser mortals might be despondent, but not us!

I think it can still be done, assuming the power issues are really resolved. If Roan can be run at 75000tpm (at 1.5% grade) for 4 months (March to June), that would be 2000 tonnes. Perhaps it would be better to talk about copper units, as I think that the aforementioned 2000 tonnes would be split between sulphide concentrate (1300)and oxide / cathode (700).

Additionally, Monkoyo (via Sable) is contributing 175 units per month, assuming 8500tpm @ 2.5% Cu. I've reduced the total because we don't know the recovery rate yet. 6 months @ 175 per month = 1050. Hopefully the majority of this will be cathode.

Next Project G. "3000tpm concentrate @ 10% Cu." from Feb 25. I've interpreted this as equivalent to 250 units per month produced by Sable, hopefully cathode. 5 months (Feb - June) x 250 = 1250.

That gives us 2000 + 1050 + 1250 = 4300, not far off where we want to be.

Experience has shown that many things can unexpectedly go awry but I wanted to illustrate how the target might be achieved. I'll leave it to others to list the downside possibilities, here are a few upside thoughts:

Roan might be ramped up to more than 75000tpm earlier than previously notified; small amounts may be added by 2 new open pit trial processing through Sable; Monkoyo might provide 3.5% grade ROM; the recovery rates at Sable might be higher than I suppose.

In FY26, we've got leaching at both Roan and the low grade material at Monkoyo, Roan reaching 90000tpm and possibly 2 new open pit operations to add to the monthly total. Nearer to 2000 units per month?

CG

at the 2023 agm, i had a chat to ollie about cobalt, some may remember.

the mufulira **** project contains some cobalt, as do the tailings (td52) that we already own.

from memory, jlp are looking for a sustained cobalt price around $30,000 per tonne for it to be profitable. unfortunately, as seis says, others (particularly in the drc) have increased production while demand is subdued. i have read reports that it will be 2026 before the cobalt price recovers, but who knows?

Hi Couerdelion,

It's a bit more complicated than what you suggest, I think.

Of the Annual chrome concentrate of a rounded-up 1.6m tonnes, about 1.2m tonnes is "fixed margin" tolled for customers. That's about 75% at a margin of ~$5 per tonne. I think of this production as coming from Inyoni Chrome and Windsor.

The remaining 400,000t of the FY24 production comes via Windsor 8 and the new Thutse module. This is at a higher profit margin because,we are told, it's more closely linked to the price of finished chrome concentrate, currently $270/t. We don't know exactly but the per tonne margin may be about $30.

The average margin of $12 per tonne is derived from the above.

The addition of 600,000t (in a full 12 month period) from the 2 new modules at Thutse may, if the $30 margin holds, contribute $18 million profit rather than $6m.

The full year total would then be 2 million tonnes at an average of say $18 per tonne which comes to $36m. Not bad.

I have,of course, rounded up the figures and assumed the current $270/t price holds, but hopefully I'm not too far off.

CG

One of the questions that should be asked at the AGM relates to resource definitions.

Monkoyo, "Project G" and, in time, the Waste Rock Project. If more medium scale open-pits are planned, we should develop a good habit of informing the wider market of precise details.

I'm going to the AGM, I volunteer to ask!

CG

Hi Seis,

My question for the AGM: Is the stock of LG material going to be concentrated (put through a module) before being leached?

A 25000tpm module was mentioned in the past. Would a 50000tpm be more suitable now?

Is it the stock-piled LG material from Monkoyo and/or Project G?

The 2.5% grade ROM is being shipped to Sable but the rest is awaiting further processing. This woul only amount to 220000 tonnes though, so where's the rest come from?

Also, is the 75000tpm at Roan actually made up of 30000tpm LG material from the 1st offtake agreement (project phoenix, 2% grade) and 45000tpm tailings? The 90000tpm would be after the addition of the 2nd offtake agreement (RNS 240624, project L?, grade undisclosed), i. e. 50000t (the capacity of the front end module) plus 40000t tailings? Therefore is the 55% recovery rate also a composite of the differing rates for LG material and tailings?

I thought that I had it worked out, but I'm not so sure now.

If Roan is set to produce ~520tpm, Sable is set to produce ~100tpm from the feed from Monkoyo, that would be 1800 tonnes in Q2, but they're only targeting 1100 tonnes.

I'm a bit confused, the important point is that they are clearly on an upward path in terms of copper production and I'm hopeful that more than 6000 tonnes will be produced in FY25.

CG

Note to self:

If, as I suspect, the JLP share price is higher than 10p in October 2025 - remember to send a punnet of raspberries to FIL.

CG

Hi HD43,

I'm not very good at poker but I'll see your forecast for 2 years time and raise it to:

1. Chrome concentrate - 2250000 tonnes. In theory, the two modules being added to Thutse take the total to 2.1 million and I've added a bit extra;

2. Copper (either cathode or concentrate - 20000 - 25000 tonnes plus Waste Rock Project 20000 tonnes (30% attributable to Jubilee - 6000 tonnes);

3. PGM - 65000 ounces. The existing Inyoni plant (42000 ounces) plus a new PGM processing facility either on the Eastern Limb or near the Thutse operations.

OK, that last one may be a bit too optimistic but we'll wait and see in two years time!

CG

My thoughts too, Seis.

I don't think we should get drawn into an argument about options, however. It may prevent more interesting information from being exchanged.

Not that I agree with the 1p exercise price, of course,

I'd rather try to understand why Inyoni is targeted to produce 36000 oz of PGMs and what is happening with the excess feed material, for example.

Hi Dru,

My initial thoughts on the Black-Scholes Valuation Model usage are that they have used incorrect values on this occasion.

I was going to wait for the weekend when I've got more time but a 10 year time horizon is too long. Compare the state of the company now to what it was, say 5 years ago. I think most of us agree we're on the cusp of major increases in production/revenue and hopefully profits. The options vest in 3 years, hands up all who think the SP will still be below 5p in 3 years time?

The options will be "in the money" anyway,so a 10 year time horizon is superfluous.

Similarly, setting the risk-free rate of return at 4.43 is also very generous.

The defence that the board will probably use is that "they've always done it this way" but I think arriving at a 1p value for the option price should have told them they'd made an error. If nothing else it LOOKS bad.

CG