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Jefferies updates on #copper: The fundamental outlook for #copper is improving faster than we had previously anticipated. Based on our supply and demand forecasts, the #copper market is entering an extended period of deficits now. We expect this to lead to declining inventories and higher prices sooner than we had previously anticipated. The supply response to these higher prices will take too long to balance the market as the lead time to bring new capacity online is 5+ years for brownfields and 10+ years for greenfield projects. If growth in supply lags growth in underlying demand, as we expect, then demand destruction will be needed for the market to balance. This demand destruction will require a significantly higher price. Ultimately, we believe the #copper price will need to rise enough to incentivize the development of new greenfield projects that the world will need to meet demand, but that incentive price is well above $5/lb.
If #copper goes from $4/lb to $6/lb, as we expect over the next 2-3 years, #copper mining equities should roughly double, on average. This leverage to the #copper price in a cyclical upturn is clearly the reason to own the equities, in our view.
https://twitter.com/robert_ivanhoe/status/1771184429349970304?t=XPM60cXJnOSCAtvIXZk8Eg&s=19
BUY, TP 290p
We retain our BUY recommendation and 290p target price, based on a blend of a FY 24 P/E valuation and a dividend discount model. The shares are trading on a modest CY 24 P/E of 7.5x. We think that is too cheap when closest peer H&T is on 6.0x. Ramsdens is more diversified and has delivered three upgrades over the last twelve months, which is in contrast to the three downgrades delivered by H&T. A dividend yield of 5.9% is also much higher than the c.4% average since listing.
GlyLeachTM is an environmentally benign, hydrometallurgical process that can leach copper, nickel, cobalt and zinc from oxide, mixed oxide and supergene ores, and even primary sulphide ores. In the right conditions, it can also leach gold. Glycine is the simplest amino acid and is available in bulk quantities. Its unique properties can offer substantial advantages over conventional lixiviants.
MCLT was undertaken by Drasloka, designed to give a preliminary indication of extractions for typical heap or ISR conditions at Alford East. The test work demonstrates GlyLeachTM ability to recover copper with excellent recoveries, up to 72.2%.
GlyLeachTM ability to recover copper with good recoveries, up to 72.2%, exceeds the traditional findings of 60-70% for ISR operations. Based on CAPEX and OPEX costs, recovering metal in an ISR operation in comparison to conventional mining (open cut or underground operation) enables lower metal recoveries whilst maintaining equal or similar profit margins.
Based on the copper sequential analysis conducted by ALS Drasloka, it was anticipated the GlyLeachTM process is likely to leach all the cyanide-soluble copper, a major portion (20-80%) of the acid-soluble copper and minor amount (
Thor engaged Draslovka to undertake a program of work to evaluate Draslovka's GlyLeachTM process, focusing on copper extraction from a 7.3m intersection selected from drillhole 21AED005. This sample was selected as representative of copper oxide mineralisation within Mineral Resource Estimate Domain Area 5 (MRE 5) from Thor's 2021 drill program (ASX/AIM: 26 April 2023).
The metallurgical test work included a copper sequential analysis, Diagnostic Leach Tests ("DLT") (ASX/AIM: 22 February 2022) and Mini Column Leach Tests ("MCLT") on the sample provided. This test work determines which copper species can be leached by different solutions.
Based on the copper sequential analysis conducted by ALS Drasloka, it was anticipated the GlyLeachTM process is likely to leach all the cyanide-soluble copper, a major portion (20-80%) of the acid-soluble copper and minor amount (
Berenberg upgrades Direct Line
Berenberg has upgraded Direct Line (DLG) but said investing in the insurer is not for the ‘faint-hearted’.
Analyst Thomas Bateman upgraded his recommendation from ‘hold’ to ‘buy’ and increased the target price from 170p to 195p on the Citywire Elite Companies AA-rated stock, which gained 1.3% to 171.6p on Tuesday.
‘Investing in Direct Line is not for the faint-hearted,’ he said. ‘However, we believe the current valuation presents a trading opportunity and we see catalysts throughout 2024 that could support the shares.’
While there are risks, with Bateman’s estimates below consensus, he said he is positive on the stock ‘because even our more cautious estimates should be good enough for it to perform.’
‘Moreover, we do not think Direct Line needs to rush its capital return, and do not forecast a dividend to be paid at the full-year 2023 results, but instead believe that share buybacks will be possible later in 2024 and in 2025,’ he said.
‘Such buybacks are essential to help offset the earnings dilution from the disposal of the brokered commercial business.’
FIRST LIGHT
Jubilee Metals (JLP) – Corporate – Fund raise £13m successfully completed
Market Cap £194m Share Price 6.5p
On Friday (15.12.2023) Jubilee announced it had completed a £13m fund raise (gross) from existing and new shareholders in London. The placing consisted of 5.5p (a 19% discount to the prevailing share price) and 236m new shares (8% of the enlarged share capital). Admission is expected by January 4th 2024.
WHI View: The cash raised will give Jubilee a stable working capital base as it looks to expand into Zambia via the “waste” project (RNS 12.12.2023).
This project contains 350Mt of material from over 60 years of copper mining. Grades are yet to be properly established, but there are zones from surface sampling and drilling (pers. comm. Jubilee) which suggest grades of 1.5% copper in places. With a new partner in IRH (a UAE-based company which is the preferred bidder for the Mopani complex from the Zambian government) providing funds once due diligence has been completed, the project is in a strong position and will be capital-light for Jubilee.
The waste project being set up as a JV between Jubilee and IRH means some loss of equity in the project in return for funding – a win- win solution in our view – especially with regard to speed of decision-making. Concentrate from the waste project will be upgraded at Sable and processed either through Sable or in third-party (possibly IRH’s) smelters and refineries.
Jubilee’s growth in copper production in Zambia now seems assured in our view which will provide a growth engine for the company.
18/12/2023
.. .....
Once these modules have been established Jubilee will be able to move onto its 'copper tailings' plans that may also include the processing of the discarded tailings from the copper waste modules. This latter plan will make a big difference to clearing up the industrial and mining waste from decades of copper mining in Zambia and help establish Jubilee as a leader in metals recovery and at the forefront of ESG in country.
FIRST LIGHT
12 December 2023
Market Cap £142m Share Price 5.2p
Jubilee Metals (JLP) Corporate Investment into copper waste dump in.
Zambia
Jubilee today announces a strategic partnership in a large copper waste dump project in Zambia estimated to contain in excess of 350Mt of material. The investment is with International Resources Holding RSC Limited (IRH)- the largest listed company in the UAE who are expanding into metal resources in Africa and have just been appointed preferred bider for the Mopani Copper Mines from the Zambian Government. The waste copper project will be placed into an SPV between Jubilee and IRH and funding for the project will be via a shareholder loan from IRH to the SPV. The purchase of the waste dumps is $30m and Jubilee will cede the rights to acquire the dumps to the SPV. The SPV will also repay Jubilee the costs it has incurred to this point on research into the waste dumps. Jubilee. will hold at least 30% of the SPV and there is a commitment to completion the implementation of the SPV by end January 2024,
The waste rock dumps have been built up over 60 years of mining where oxidised surface copper and subgrade copper (at the time) were discarded. Preliminary surface sampling by Jubilee has found 'zones' where grades of copper can be up to 1.5% copper. Jubilee intends to accelerate a resource definition program in tandem with looking into the development of up to 4 of its copper processing modules. These are designed to produce an oxide concentrate to be processed at Sable and a copper sulphide concentrate for onward sale and recovery of copper-probably in Zambia.
Jubilee has laid out a preliminary economic scenario where each module will be capable of processing 50kt/month of material; capex set at between $5-6.5m each (at the cheaper end of the estimate if more than one are built in a continuous build); each module will be fed with 120-120kt/month of material with a preconcentration to achieve the 50kt/month for the copper recovery. plant; with each module capable of producing ~500t/month of contained copper. Overall, from the planned four modules Jubilee plans to produce 2.1kt/month copper at a cost of $3,800/t copper. The plans currently show that 60% of the copper can be refined at Sable with the remainder sold to a smelter for third- party recovery.
WHI View: Today's news puts more flesh on the bones of Jubilees plans for developing its 'copper waste' strategy taking discarded copper from mining and, using simple, off-the-shelf recovery technology, producing recoverable copper in concentrate. We note that all is preliminary at the moment and that proper resource definition remains to be established but that the technical flow. sheet is well understood from the Roan processing plants. Funding is secured from the SPV partner who obviously want to make the most of their resources around Mopani Mines now they are the preferred bidder for the copper mine/smelter/refinery complex. Once these
Nicole Galloway Warland, Managing Director of Thor Energy, commented:
"The successful completion of the hydrometallurgical mini-column tests; returning favourable copper recoveries of up to 72.2% are above the standard range of 60-70% for an ISR operation. These results are highly encouraging, as Thor advances the ISR assessment of the Alford East Copper-REE-Gold Project.
"As part of Thor's commitment to sustainable exploration activities, we are pleased to be using Glyleach TM as a lixiviant during the ISR process. Compared to the conventional sulphuric acid that is often used, Glyleach TM is an economical and environmentally friendly alternative, helping Thor to develop a low-cost, low-environmental footprint ISR copper operation.
RNS 11/12/23
Test Work Delivers Elizabeth Creek Flowsheet Enhancements Copper recovery boosted by +40%
*** Using a combination of 5kg/t cyanide and
15 kg/t glycine - Draslovska GlyLeach process
04/09/2023 Coda Minerals Limited (ASX: COD, “Coda”, or “the Company”) is pleased to report highly encouraging initial outcomes from ongoing enhancement initiatives being undertaken on its 100%-owned Elizabeth Creek Copper Project in South Australia, building on the positive Scoping Study outcomes delivered in March 2023.
The results reported today relate to recently completed metallurgical test work on material from MG14, one of the open pit deposits at Elizabeth Creek. Coda has completed a series of metallurgical tests to assess the amenability of flotation tails to leaching, as well as a separate set of tests to reduce reagent consumption during flotation. These tests were designed to improve project economics by reducing costs associated with flotation and to increase copper recoveries and associated revenue through leaching. Both sets of tests were successful:
• Tails Leaching: Using the most practical of the tested lixiviants***, the recovery of copper from tails was 65.4%. Combined with flotation recovery, this resulted in an overall recovery boost from 57.9% of copper to 85.4%.
The MG14 flotation tails stream at Elizabeth Creek has a copper grade in excess of 0.6% Cu. This stream represents a potentially significant source of value that can be tapped using low-cost leaching methods.
Additional copper production by these means has the potential to be highly value accretive, particularly in the forecast supply-constrained copper price
https://investorhub.codaminerals.com/announcements/4403641
congratulations to international resources holding (irh) on its #investment in zambia’s mopani mine.
jubilee looks forward to working with irh on the implementation of the mufulira **** project at mopani
read more here: bitly.ws/342mv
#copper #criticalmetals #zambia
https://twitter.com/jubilee_metals/status/1730511037294633338?t=irnckoypgb489wyfdy85iq&s=19
The failing ports, congested roads and the collapse of Transnet threaten the entire South African economy.
According to the Sunday Times, the congestion crisis at South Africa’s ports has resulted in cargo ships waiting as much as 19 days to offload their shipments, forcing many of the world’s biggest shipping lines to impose “congestion surcharges”, with some now opting to fly goods into South Africa at a higher cost, while others are avoiding South Africa’s port altogether.
Cape Town’s port is seeing delays of 14 days to offload cargo. Average delays at the Durban Multipurpose Terminal were 365 hours (15 days), while the waiting time at Container Terminal Pier 2 was 457 hours, or 19 days, according to a Transnet Port Terminals (TPT) national recovery update.
As of last week, there were roughly 70,000 shipping containers stranded on ships off Durban alone.
https://businesstech.co.za/news/government/732029/load-shedding-isnt-south-africas-biggest-problem-anymore-report/
Midas verdict: Midas recommended Belvoir in 2016 when the stock was £1.21. Today, the shares are £2.40. The increase is notable compared with peers, but the price has still come down from highs two years ago. That should change, with brokers targeting £3.75 within 12 months. Demand for rental properties is at a record high, while sales are holding up better than many expected. Gonsalves is a steady hand on the tiller too, having spent his entire career in the market, including a five-year stint as a director of the Property Ombudsman. Hold on to these shares.
Outlook for Copper: Our assessment of the outlook for copper has not changed since we reported in the 2022 accounts that during the second half of 2022 and into 2023 the copper price has recovered and forecasts for the price of copper and its by-product metals remain positive in the range of US$10-US$15,000 per tonne. During the period there was no new major positive news on copper supply so the outlook for copper supply remains quite pessimistic but we anticipate and from mid '24 onwards this will lead to both smaller but profitable mines being developed , and junior mining companies with good copper resources in reliable jurisdictions becoming potential targets for acquisitions by major mining companies. As a result, the Company believes it is well positioned with all its projects, to take part in a potential acquisition boom or alternatively to attract financing for its own operations which might not otherwise have been available.
The major mining companies are seeking new projects for acquisition and all our projects have the fundamentals which may attract the attention of larger companies as reflected in the fact that as reported below under Post Period Events we are in negotiations with First Quantum in relation to them exercising their options over certain of the Zambian Projects.
We feel that there is a strong possibility that the current inflationary pressures and higher interest rates may slow down stock markets but these conditions will be beneficial for the smaller metal producers who have historically outperformed under these economic conditions.
https://www.londonstockexchange.com/news-article/AFP/half-year-report/16146833
EDISON re: Sylvania Platinum
Lower rhodium prices overshadow strong production
Sylvania Platinum saw a significant quarter-on-quarter reduction in EBITDA in Q423 due to lower rhodium prices. We have lowered our rhodium and palladium price forecasts for the next two years, because of predicted demand in China and some de-stocking from OEMs, and have also reduced our long-term assumptions to allow for the current uncertainty. Our FY23e EPS has been adjusted downwards to 18.3c, with FY24e and FY25e EPS reduced by 40% to 9.0c and 11.2c, respectively. Our revised valuation is now 118.2p per share, 32% down from our previous valuation of 173.7p per share.
Near-term forecasts cut :
Due to the lower rhodium spot price and uncertain supply/demand situation, we have revised our rhodium price assumptions for the next two years: down 44.6% in FY24 to US$6,000/oz and down 47.1% in FY25 to US$7,500/oz. We have also reduced our FY24 price forecasts for palladium by 12.9% from US$1,503/oz to US$1,309/oz. As a result, we have lowered our EPS estimates from 14.8c to 9.0c for FY24 and from 19.3c to 11.2c for FY25.
Watkin Jones highlights a continued recovery in the institutional funding market in today's interim results, which were in line with its expectations of a significant H2 weighting for FY23E. This, and attractive new land opportunities, should support its long-run target margins. However, the group has exercised caution in recognising profits on long-term contracts, leading us to cut adjusted PBT by £25m for FY23E, while leaving FY24E unchanged. Longer term, we believe the clamour for rental accommodation and WJG's unique model should support a return to growth.
"H1 results lower, as expected. Revenue in H1, to 31 March, fell by 20% to £154m, with work progressing on previously forward-sold developments but no new forward sales in the half. Operating profit fell by 88% to £1.8m, reflecting reduced gross margins in line with previous guidance. Net cash rose from £26.8m to £45.3m, slightly ahead of the 13 April trading statement. The interim dividend was reduced by 52%, a smaller decline than for earnings, reflecting 'building confidence in H2 performance'.
'Materially stronger' second half. H2 is predicted to be stronger, with forward sales adding to work undertaken from those under construction. Also announced was the forward sale of a student scheme, in line with margin guidance. WJG targets five more forward sales in H2, with earnings dependent on concluding them in 'what remains a volatile environment'.
Land market readjusting. We are convinced of the long-term outlook for the rental market, with housing now a political imperative. WJG's unique model addresses student and private rental (page 3). Higher funding cost is now translating into lower land cost, which should feed through to better margins in the medium to longer term, in our view.
Our reduction in FY23E adjusted PBT relates to Student Accommodation, with a £110m fall in FY23E revenue and £25m cut in gross profit, reflecting the rephasing of revenue and profit into FY24E. We believe this is a 'move to the right' in the medium term, and expect a similar trend next year, with no changes to revenue or profit for FY24E.
For FY23E and FY24E, we have maintained our dividend cover at 2.0x, reducing the FY23E dividend from 7.6p to 3.8p, with our estimate for FY24E unchanged at 7.7p. The reduced profitability for FY23E has led us to cut our pre-IFRS 16 net cash estimate by £20m, with a lower swing of £14m for FY24E reflecting the reduced dividend for FY23E.
Investors Chronicle 19/05/23
Directors and insiders at Lok’n Store (LOK) have offloaded nearly £11mn in shares through a secondary placing.
The 1.36mn shares were sold at a 5 per cent discount to the previous day’s closing price through the placing by broker Peel Hunt, which was arranged to satisfy institutional demand for the shares, the company said. None of the proceeds from the placing went to the company.
Chair Andrew Jacobs landed £10mn from the sale, offloading 1.25mn shares at 800p each on 5 May, reducing his ownership from 18.7 per cent to 14.5 per cent. He agreed not to sell any more shares for a year, barring certain exceptions.
The company said the placing would “broaden [its] institutional shareholder base and potentially increase liquidity in the trad- ing of the company’s shares, while also allow- ing Andrew Jacobs to diversify his investments and financial interests”.
After the placing, non-executive director Simon Thomas sold 100,000 shares at 815p a share for £815,000, reducing his stake to 4.3 per cent. On the same day, fellow non- executive director Charles Peal and his wife Antonia Peal sold 5,000 shares each from their individual savings accounts (Isas) at 831p a share for a combined £83,000, shrinking their stake to 2.55 per cent.
The sell-off comes after a mixed set of results for the self-storage company. Although reve- nue ticked up 1.5 per cent in its results for the six months to 31 January, pre-tax profit sank by over half due to a valuation hit caused by rising interest rates. However, the company indicated it was bullish about the future, increasing dividends by 15 per cent.
Target price 375 (126% upside). We value the shares on a FY 2023E free cash flow yield of 5.0% (small/mid cap 4.7%). Based on trough earnings in 2023E, we highlight the reasonable 9.0x P/E (small/mid cap 15.3x), 5.7% dividend yield (small/mid cap 2.1%) and, most importantly, 11.8% free cash flow yield. None of these metrics reflect the benefits of the franchise model, track record and long-term potential
2022 followed on from the strongest year for property in recent history, but Belvoir has, nevertheless, reported a robust set of full-year results further evidencing the power of its franchised model and strategy. FY 2022 revenue was up +14% (+2% like-for-like), gross profit up +6% and adj. PBT down -1% as the resilient Lettings income and expanding Financial Services business continued to grow (both +4% LFL), while housing Sales fell (-15% LFL) as market conditions weakened and administrative costs remained appropriate for long-term growth. Net cash was £1.2m at December 2022, supporting a +6% increase in the full-year dividend to 9.Op and the prospect of acquisitions either directly or by assisting franchisees to expand. We have made no major changes to our forecasts or target price and highlight the P/E of only 9.0x in 2023E (when we expect the interest rate cycle to turn), FCF yield of 11.8% and dividend yield of 5.7%. The current share price ascribes little value to the medium to long-term growth potential from a business that has proven adept at maximising market opportunities both organically and by acquisition.