Member Info for Gray1

What happened to the copper forecast update? Did we ever get a new one?

As long as the circular is clear, concise and makes sense and not the usual RNS statements they put out which ends up having more questions than answers I am happy to wait and read all the speculation good or bad it's no big deal for me.

If the institutional investors are convinced it will more than likely go through.

This circular needs to put forward a very convincing argument for the proposed sale Shuvlin as most on here don't seem too happy with it at the moment.

Meanwhile we carry on waiting.

There was $10 mill depreciation in last years accounts and there will be likely another $10 mill for this year for Chrome and pgms whilst this reduces the tax burden and net profit it is still cash that is in the business that could be put back into the copper side of the business.

The buyer will also get the benefit of this and the proposed sale is up to $90 mill we don't know the actual final price it could be a lot less. Plus it isn't even all upfront so the buyer can pay the three years payments out of this cashflow so in effect they are only paying half the amount and the asset pays the rest for them.

Plus there will be some rolling credit to pay off out of the first upfront payment possibly. I don't get it we might as well have that cash it generates even if it means copper progressing a little more slowly

The first 6 months EBITDA is around $13.5 mill. Even at that Leon's 10 to 15 times metric doesn't stack up and the second half should be much better with increased chrome and pgms price plus third party processing of pgms stockpiled. His metric doesn't make sense.

The EBITDA for $20 mill was for the last FY not the first 6 months of this year Chester but I would expect it to be north of $20 mill for this FY year.

We should get the unaudited results before the end of August Chester. If they got a wriggle on they could easily produce them by the end of July.

I have no problem with the circular taking its time. How can you make an informed decision without knowing how pgms and chrome performed for this financial year?

After seeing your chart for the second half of the year Seis in makes even less sense. Last financial year the basket price was only just over $1k/ounce.

Should be $20.5 mill EBITDA not that it makes much difference to below calculation.

Last financial year if you remove all corporate overheads from Chrome and pgms EBITDA it comes out at around $21.5 mill.

Using Leon's 10/15x EBITDA that puts a valuation of $200 to $300 mill. Maybe a bit steep but certainly not up to $90 mill. This offer just doesn't make sense with that comment about EBITDA valuation from Leon.

At the moment bottomsup I agree with you. It will help to see how the second half of chrome and pgms have performed and if the third party agreement they entered into for processing pgms is also contributing.

I am failing to make sense of this sale as it stands. We will just have to wait for the circular to see if it sheds any more light on this.

You would hope so:)

Gross profit isn't EBITDA Happy there is a fair bit of overheads and "other" overheads to come off that but still under valued at Leon's estimated 10 to 15x EBITDA.

Think they are using the third party processing the OB1 to give them a better understanding of it. !0 mill tonnes is far better than 15k Happy see what results they get.

Thanks Seis I will look at that again think that must have washed over me about the LWP:)

Seis,

Looked at your figures agree with Roan and Project M high grade, Project G similar to M which is a reasonable assumption.

LWP you giving it 12 months to start producing something might be a bit tight but possible.

The only query I have is how do you arrive at the low grade numbers and them ramping up over time?

We are still a long way from 25k/year at the moment and as Seis points out significant capital spend will be required to get us there and we are probably looking at around 3 years to get there as it stands. I believe Zeus were predicting $50 mill cash profit by 2028. They haven't got a copper prediction right yet so we shall just have to wait and see.

However if the OB1 gets a partnership or from the proceeds of the possible SA sale there could be funds to do it themselves then 25k/year could arrive more quickly.

Revenue is fine but depends on the profitability and we won't know that until JLP start to upscale their copper production. If the SA sale goes ahead then copper will have to absorb the "other" overheads albeit they should be lower.

I would like to see in the circular a break down of cash needed where it will come from and how JLP are going to achieve 25k copper a year along with a time frame on how they will get there to justify the sale. They must have a plan for it if they are willing to sell the SA operations to focus on it.

Agree Seis still a fair bit of capital to spend on Zambia to get it to a good producing profitable business. Meanwhile we await the circular.

Tjate is pretty much worthless and for JLP to say keeping Tjate means we still have a foot in pgms after a prospective sale of SA assets is stretching it a bit to say the least probably couldn't give it away.

Happy for the circular not to come out until after the full year results around the back end of August. Hope it is on the same boat as the electrical module:)

Papa read Seis post maybe your information is more in line with that and you have misunderstood the tonnages and therefore the price reduction that was negotiated.