Member Info for Gray1

Happydays,

If you look at seisnav figures for chrome he uses averages prices over the quarter. I take my pricing on quarterly average don't expect it to be based on weekly fluctuations for the own processed chrome. Toll will be fixed. So I think my figures are reasonably fair. As you say we will know in the next month or so:)

Edzi,

I think Chrome will be much more than $45 million gross margin next year. The figures I was quoting was $ per ton.

I originally thought $30-$35/ton for next year on 1.8 million tons that would be $54-$63 million gross for next year but it could be more because there will be more own processed chrome than toll margin plus it is possible because of the chrome price at the moment my $30-$35/ton might be a bit light. We will know better when the final results come out.

As chrome is becoming an established process now it will be much easier than copper to predict the financials on this like pgms within a reasonable margin.

Hope that explains it a little better.

I looked at the chrome averages you quoted Seisnav and chrome dropped in Q2 but gross margin on chrome increased from $5 to $23/ton. It was the 2Q when JLP said we would see the impact of the new toll processing deal which clearly shows we got a better price although own processed chrome has increased also.

Over the full year we will process around 650k own processed and 800k toll processed. 273k own processed in the first half and would expect more than that in the second half.

Looking at your prices for Q3 increased by $5 from Q2 and then a further $20 for Q4. If these increases are replicated in gross margin (I suspect it isn't). It could mean gross margin for Q3 is $28 and Q4 $43/ton. I am not factoring any uplift in margin as we do more of our own processed material.

Next year on 1.8 million tons. 1 million tons will be own processing a further increase of approximately 350k of own processed chrome with a much better margin than toll processing. So even if chrome price drops a little the amount of increase in own processing could offset that.

I originally speculated on $30-$35/ton margin and someone said it could be more (can't remember who now) but chrome looks very healthy for next year.

Spot on Edzi.

Seisnav,

I think your comments sound more reasonable but I think there is going to be a lot on here unhappy with only 10k for next year. Even I thought I was being cautious with 12k and got pulled up over it.

Correction Project G slightly more than I first put 7.2K to 9.6K. 5.4k to 7.2k for 9 months.

LUFC,

This is where the numbers don't stack up 25k/month Monkoyo at 3/4% is 9k to 12k per year copper. Wasn't Monkoyo supposed to be 50k a month?

Project G at 20k/month at 3/4% is 6k to 8k a year. Total of 15k to 20k a year. This not expected until 2nd quarter so 4.5k/6k a year reduces to 13.5k to 18.5k for the year.

This assumes the grades are at 3/4% and the projects ramp up on time and as we know grades of copper are not JLPs forte. Some conflicting numbers here. I haven't included anything for IRH but don't expect them to add much next financial year anyway.

The numbers they are putting out don't add up at the moment. Maybe they mean 25K/year copper by December 2025 it's still 2025. I think my prediction of 12k for next year I made a few months ago is starting to look more likely. Disappointing from the podcast numbers.

Anyone seeing anything different?

Glad I am not the only one who noticed it OD:)

"for this financial period ending in June we are looking at between 3 500 and 4 000 tonnes, and then doubling that comfortably in the next period"

Taken from the podcast transcript.

Does this mean 7k-8k copper for next financial year? Or 7k-8k for the first half next year. It's a bit vague just to add he said doubling it comfortably but what does that mean? That doesn't fill me with much optimism maybe I am over thinking it.

Good morning everyone,

My take on it for what it is worth:

16k from Sable but might take up to 6 months to achieve this target so 8k for second half. I will estimate 4k for the first half. 12k for the year. I like the estimated gross margin of 5k.

Roan output to be part of Sable production assume Mikie's 4k is right. Leaving 5k to be sold into the market. Total of 17k for next year from these two assuming everything goes to plan and no more delays and nothing from IRH.

17k at 4k/5k ton gross margin is $68/$85 million for copper next year. Interesting to see what the copper forecast will be from JLP next year (would be nice if they actually hit one). Good they are putting a video out of Roan in action social media is a valuable tool they can use when RNS not needed.

Throw in a similar amount from chrome and pgms and we could be looking at $130/$150 million gross margin for next year. Looks very tasty.

"The increased margins from the new partnership agreements are expected to reflect stronger through the current quarter"

This impact was felt in Q2 when the margin went from $5 to $23. Majority is toll margin. The real effect of own processed material won't really be felt until next financial year and beyond. I am hoping the margin will be closer to $30/ton for the second half of this year.

Just to add to my last post own sourced was only 293k tons for the half year when we are producing 2 million tons then 1.2 mill will be own sourced and 800k fixed margin so we should be producing double own sourced we produce now.

We will produce around 800k fixed margin this year so that won't increase as opposed to a significant increase in own sourced material.

Had another look at it Northern and the only thing I can see which gives an indication of potential margin is the comparison between half year 2023 and half year 2024.

First half FY2023 was $5 gross margin but the split was 31% own sourced/69% fixed margin.

First half FY2024 was $17 gross margin split 41% own sourced/59% fixed margin.

Chrome prices have improved from 2023 to 2024 and the fixed margin should drop to 40% so there is more uplift in the margin to be had but difficult to see predict what that will be without actual figures each quarter. Only thing it shows is fixed margin is very small.

I saw the presentation at the time so don't remember that much about it now don't recall them putting any numbers to it but I am a bit old school Northern. I like to see actual numbers.

They will also benefit from economies of scale. I was so disappointed we didn't get any financials with the 3rd quarter output would have given us a much better idea where the margin was. It was $23/ton in the second quarter and I agree would expect it to increase in the third and fourth quarters.

Mikie

Next years expected chrome and pgms will underpin the sp at a higher value than what we are at today. How high will depend on the chrome margin the pgms don't make that much difference with small fluctuations in price.

And then there is copper on top.....

Seisnav,

I have this years gross margin slightly better than last year mainly down to the increase in chrome output. Would have had a better idea if they had put some figures out in the 3rd quarter with the gross margin in as I think chrome will have improved for the second half of the year compared to the first half.

It is possibly we might not see the final figures until August as they may want a little more time with Roan to give a better update there.

Good morning everyone,

Edzi saw your comments regarding electronic equipment. Not having seen the electronic component I would imagine it is a contained unit with all the electronics in it to control the operation which then need to be connected up the necessary equipment it will control.

I would imagine most physical parts spares can be easily resourced. If it has a printed circuit board in it that will be more difficult to repair/replace. If not then repairs/spares should be more readily available.

I operated computer controlled chemical plants and the software was the main component which controlled the plant The equipment that was controlled by this (motorised valves/ measuring devices etc) were all easily repaired or replaced.

Not sure this helps you as we haven't seen exactly what it is. I think Gotreal is into this sort of stuff so may have more input to add to this.

I'm good thanks Edzi trust you and your family are all doing well.

Not a great fan of share buybacks never really seem to add much value prefer dividends. Long way from that yet though Edzi and JLP have plenty to spend their spare cash on the copper strategy just yet.

Overall I liked the RNS. They just have to deliver what they say but we seem to have been saying that for quite a while now.

The only other thing in it is have they ever said before they would have to build upgrading facilities or is that new. Might be me just forgetting about it.

JLPositive,

You sound like Leon. It is dilution however you want to dress it up. The earnings and added value potential of the dilution is as yet unknown.

Personally I am fine with it as it looks a decent deal and will take time to realise the benefits of it but sometimes you have to call a spade a spade.