Member Info for Gray1

Hi Edzi hope your back is on the mend,

I think the share is just unloved at the moment outside the current investors because of what went off with copper over the years maybe the market is just waiting to see actually improving copper production and the upscaling of copper with the different ways they will expand it.

As we go through the year and they announce Roan hitting nameplate capacity. Sable upgrade completed. Thutse 2 finished possible more artisan mines signed up to fill Roan and Sable. IRH modules timelines given, Remedial work at M & G completed and modules determined for M & G and copper production steadily increasing, Chrome beating forecast as long as there are no major disasters then the sp should recover.

I'm tired just listing all the work they are looking to complete and do this year it is a huge task and I'm sure not everything will go to plan but if they accomplish most of it I don't think we will be disappointed. Roan was just getting us into the starting blocks. They just have to deliver on what they have said they are going to do.

Good morning everyone,

At the end of the day it doesn't matter who is selling like any investor they will have their reasons good or bad. It is a temporary blip and a possible buying opportunity for some.

Eventually it will all come down to JLP delivering on their forecasts and hopefully beating them. Also delivering on the projects in the pipeline. If they do this in 12 months we will all be in a more prosperous and happier place. It is all down to you JLP.

I posted the other day I expected FCF in the first half of the year to cover modules for M & G and the extra work needed at these two sites. However if they were to bring onboard more arttisan mines in the first 6 months then they would probably require alternate finance for these. FCF in the second half would be more readily available. Of course IRH has no upfront cost and there is some reimbursement of costs to come back.

I also posted I expected gross profit to come in at around $65-$80 mill which after deductions would give and eps of between 1/1.3. with a pe of between 8 and 12 an sp of between 8p and 15.6p. I expect the gross profit to be more towards the upper figure so sp of between 10-14p.

These are my expectations. I put a bit more meat on the bones of the above calculations in previous posts of how I arrived at the above figures. We will have a much better idea at half year.

Hope the back procedure goes well. Will you be in hospital long?

Seisnav is more clued up on Chambisi. It isn't something I have looked too deeply at always looked an expensive option but I suppose any option will be expensive.

Just seen your comment Shuvlin. You are right a loan should be able to be financed easily with the cash they are generating by the time they would need Chambisi.

I'm good Edzi trust you are. At the moment I would take half out at 18-20p and then would be hoping for a bit more than that eventually with the rest.

If they can finance the modules etc. with current cashflow then depending how many artisan mines they pick up it isn't a huge amount of money e.g. 5 @ $2 mill for 51% interest is $10 mill.

They should generate more than $20 mill FCF for the second half equivalent to 10 mines so may only need short term finance. Chambisi is a different matter though if that is in the running . It will all come out eventually.

As for something big going off in the background you never know. I did think the last 2 RNS were decent though Edzi.

Not a lot anyone can do about Fidelity offloading just have to wait it out if that is the case.

Looking at cashflow and possible dilution.

At the moment we know two modules to be built at M & G plus some remedial work. $13 mill for modules (2x50k/month) plus $5 mill for remedial work total $18 mill. Assume any cash generated from last financial year covers any outstanding payments for Sable and Thutse 2.

Q1 cash generation Chrome 400k @ $25/tonne is $10 mill, copper 1k @ 2.5K/tonne is $2.5 mill, pgms 9K @ $100/ounce is $900k. Total EBITDA is $13.4 million. Subtract interest and tax FCF of around $9 mill.

Q2 Same figures except copper at 2K @ 3K/tonne is $6 mill. Total EBITDA of $16.9 mill. Subtract tax/int FCF of around $12 mill.

Total FCF around $21 mill for the first 6 months. Could be bit lower or a bit higher depending on production, tax payable, interest and margins for each commodity but it should cover the cash outlay required for two modules and remedial work.

If Leon states he wants to acquire more artisan mines quickly then dilution or some other form of finance would be required for these. The second half of the year would provide FCF for these mines as the main capital would be done.

However if Chambisi is on the horizon no idea how much that would cost and what capital would be required to get it operational. Any ideas Seisnav? Of course just a rough calculation to try and give an idea of what the cashflow could look like.

First time they have admitted loadshedding has been a factor in the Roan ramp obviously it has been part of the delay. I know you were concerned about it a while back Seisnav.

Great news regarding the power they have learnt from SA. Another potential problem to affect production solved. ESG benefits good as well. Communications are now finally getting to where they should be. Look forward to the Chrome margin for the second half when final results are out.

Upgrades, modules at M & G plus IRH news and possible artisan mines still to come. Sable and Thutse2 to complete. Roan to finish ramp up lots going on.

The 15% is for the margin on the agreements for processing chrome. The toll processing is around $4/5 dollars a ton with some uplift from the fine chrome. Myself and Seisnav were discussing it the other day.

Overall we reckon the average could be between $23/30 dollars per ton with a chrome price range of $285/300.

Seisnav based his calculations on $25/tonne average price and I think he won't be far out with that.

Thutse 2 is yet to come online so that should help.

Happydays,

Chrome 1.6 million tonnes@$25/tonnes is $40 million

I will take your copper at $26 million

pgms 36k @ $100/ounce is 3.6 mill

Total $70 mill EBITDA

Expect more than 1.6 mill chrome and my pgms could be a bit conservative. Copper could be a bit more tonnage but margin could be a little lower. Somewhere between $65/$80 million.

Quiet on here I have just seen some tumbleweed roll by:)

Sumo you don't do ambitious forecasting it only sets you up to fail. Forecast what you are confident you can do and unless something majorly untoward happens you will meet it. Shareholders and market are happy.

You can't put into forecasts what isn't happening yet. If/when it happens during the year then you can upgrade it if it impacts to the upside.

They are doing the right thing because we know if they do it then they will beat the forecast. If things go wrong or get delayed we will still hit the forecast win win all round.

It is a much better look than announcing delays and then downgrading forecasts because you were either too ambitious or things don't quite go as expected when you are in a growth phase.

Nice graphs Seisnav look forward to you adding higher bars in for copper.

I agree Shuvlin. I posted a rough calculation yesterday where I thought the sp could be and you commented it was inline with what Zeus capital were saying (I hadn't seen their projection btw).

Seisnav you posted pretty much what I have been saying also I usually get called negative but I am a big boy (I do give the company a bit more grief than you though).

All looks very promising to me as this time we can look forward to expansion and if there are any issues we know it won't impact the copper forecasts only with upside to it. What's not to like.

You can't Seisnav.

Gotreal look again at what I said if you process 600k/ tonnes per year and get 6k then the starting grade will be higher than 600k/tonnes per year and only getting 3k. We may be actually arguing the same point. That's a first for me and you:)

I think Chrome will beat forecast probably 1.7 mill or slightly more. They only have 9 months of Thutse 2. It looks like they are doing 400k a quarter now. Usually a slowdown at Xmas although that didn't happen this time but Thutse 1 had ramped up around then.

It looks to me Edzi like they are trying to set targets they know they can achieve and then start to develop a reputation for being a company that can deliver what they say when they say contrary to what has gone on before. Give them a chance see how it goes and how the market reacts.

The sp was unlikely to go anywhere whatever was in this RNS just based on net profit for FY24 the sp is about 5 to 7p on an pe between 8 and 12 there or thereabouts.

Personally I don't like to see statements like might or maybe in an RNS. It should be factual, accurate and concise. I thought the RNS was good. I haven't listened to the podcast I tend to treat them with a pinch of salt

If you can't guarantee you will do something in an RNS then don't say it. It is the most confident I have ever been that not only will they hit a copper forecast for the first time but they might actually beat it

Edzi,

The difference is the RNS is a statement of what the company intend to do and the market will hold them to account over it.

The podcast is just an interview with Leons opinions and thoughts it isn't a company statement.

Gotreal the throughput and output are linked:

600k/tonnes per year processed and 3k contained copper output vs

600k/tonnes per year processed and 6k contained copper output.

Which do you think would be more profitable?

Hi Edzi,

How many times have me and you been critical of the company in the past with poor comms. RNS statements not adding up, missed timelines, missed forecasts where copper is concerned. Sometimes it is as though we are shouting in the wind. I said months ago they would miss the copper forecast for FY24 and the IRH deal was linked to Roan performance and was pulled up about it.

From the RNS and the copper forecasts it looks like they have learnt some lessons. Personally I think they will beat the upper end target but look at all the work they have to do still. How many times have you said if the electrical component is a problem at Roan will they have problems with them with IRH and the modules for Project M & G?

They have discounted them so if there are problems this time it won't affect the forecast and they won't have to go back to shareholders and tell them they have missed another deadline etc.

Surely it is better to update shareholders with RNS news in statements like Q1 forecast on track, Q2 forecast on track to hit high end of forecast Q3 forecast upgraded to 7-9k Q4 copper beats revised increased upper forecast 9.5k.

That has got to be better than forecasting 10-12k and doing 9.5K. Same amount done but more positive statements build confidence and trust something me and you have regularly said is an issue.

The forecast makes sense you can only forecast on what you know. They know Roan will be producing for 9 months let say at 700/month plus some from Sable as it can upgrade some material at the site.

Load shedding could have an effect, downtime for any maintenance and Xmas usually has an adverse effect. They may still need to see what a consistent output is for the material processed. They are confident they can hit it and it will be the first time.

JLP have a poor history with copper continual missed timelines reducing forecast affects sentiment, confidence and trust. They need to regain that.

The things we don't know there is some more capital needed for Project M & G it hasn't been allocated yet so they don't know the timeline for completing these and the affect on production at the moment.

Two modules for Project M & G they haven't determined where they put these yet and capital will be required. They can't say when these will be completed and therefore what affect they will have on production.

The IRH deal probably won't hear anything about this until the Q1 update at the earliest and Q2 at the latest so they don't know if they will contribute to any copper production this year.

Therefore if you don't know don't say otherwise you are just setting yourself up to fail more missed deadlines having to lower forecasts more mistrust loss of confidence it just makes you look incompetent.

The RNS is quite detailed but one thing missing from it (apart from Sable and Thutse 2 which are currently being worked on) there are no timelines, no guessing it isn't vague or not that I have noticed.

Roan has always been key. It is very difficult to forecast with reasonable accuracy when you are expanding a process timelines slip things occur that are unexpected better to forecast on what you know and beat it as expansion evolves during the year.

Looks like they have finally learnt a lesson from past performance and I believe they are doing the right thing.

Thanks Seisnav probably about as clear as it gets:)