Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
We value Jubilee purely on a DCF basis at this time. As the company increases production, especially through Zambia, and reduces risk further, we shall look to move our value methodology to a mixed SOTP model using ratios of PE and EV/EBITDA. Peer producers are currently seeing a forward EV/EBITDA of 4-5x and PE of 9-10x, so for Jubilee on a two year horizon, purely on that basis, we would see a fair value of roughly 15-20p/sh – as a derisked, established producer.
Jubilee Metals
Robust, cash-generative production from mining waste
Jubilee operates several chrome-Platinum Group Metal (PGM) operations in South Africa and is constructing a zinc-lead (vanadium) plant at Kabwe in Zambia after already commissioning the copper and cobalt circuits (the ‘Sable’ refinery). The company has a growth pipeline identified and significant opportunities to find new projects in Africa (or globally); more specifically, Jubilee announced that it is looking to increase its copper (cobalt) production in Zambia aggressively to make full use of the Sable Refinery. Jubilee also owns the Tjate PGM project in South Africa, which is currently on hold. The company model is to treat its own waste materials and to supplement these with third party ores and wastes where possible. This year has been nothing if not eventful for Jubilee, but further progress and material catalysts are expected over the course of 2020. Jubilee has a high-margin business with cash on hand, and we see plenty of opportunities for Jubilee to capitalise on its robust business model through the global Covid-19 crisis and beyond. We initiate with a fair value of 11.2p/sh
03 July 2020
AGM 2020 Q&A Session
Asiamet Resources Limited ("ARS" or the "Company") is pleased to announce that a video recording of a Q&A session with Executive Chairman, Tony Manini is now available for Shareholders to view on the Company's website at the following link:
https://asiametresources.com/media/#1573541478905-c666a9b6-bb22
A copy of the presentation is also available in the presentations section of the website https://asiametresources.com/reports-and-presentation/
The news is part of a wider focus on Zambia and copper by Jubilee. Copper tailings projects can be very lucrative (e.g. Central Asia Metals, AIM:CAML, No Rec) and the Copper Belt in Zambia / DRC hosts some of the world’s highest grade copper deposits (and therefore tailings deposits) – if you want grade, there is nowhere else you would rather be. This plays to Jubilee’s strengths with its proprietary technology and people used to recovering additional value at the edges. The robust plan is aggressive, but stepped and nothing less ambitious than Jubilee has already achieved in South Africa:
1) Secure 3rd party feed now within the Sable Refinery local catchment area to drive the expected short term growth in copper production. Also to implement strategically located copper ore upgrade facilities and at the same time work up the JV (Project “Roan”) which Jubilee is capable of funding from its growing cash flow;
2) Commission Project Roan which, when combined with secure 3rd party offtakes, could increase copper production to the 14kt/a copper cathode level at Sable Refinery and;
3) Build the large volume tailings project (aptly named Project “Elephant” at a likely grade of around 0.35% Cu) to allow for a further ~10kt/a copper expansion to a resulting 25kt/a copper cathode.
Jubilee Metals (JLP) – Corporate – Large copper tailings project in Zambia – staged expansion for Sable
Market Cap £82m Share Price 3.8p
Jubilee announced yesterday that it had secured a JV with a private company - Star Tanganika – for the rights over a copper project at Ndola in Zambia. The purchase price was $5m ($0.6m in cash the rest in shares in Jubilee) which will be used to advance a further potential copper tailings project held by the owners of Tanganika. Jubilee will provide all of the operating and capital funding for the first phase project and will receive 75% of the project earnings until all capital is recovered dropping to 60% after that – Jubilee will also have first right of refusal over the copper-bearing concentrates produced on 3rd party offtake terms.
WHI View: The Sable Copper (cobalt) plant in Zambia is up and running and producing copper (and cobalt) from Jubilee’s own (small) tailings resource and growing production. The plant is established and what is required now is a secure, regular source of feed to increase production towards the 14kt/a cathode capacity in the Sable plant.
Yesterday’s announcement goes a long way to making that happen.
The extension tailings project would also enable Jubilee to expand production in Zambia further – to make it a producer of significant scale. With operating costs (including ore purchase costs) expected to be ~$2/lb copper produced, at capacity producing 14kt/a copper, Sable will have a gross profit of ~$30m at our long-term copper price forecast of $3/lb. Any further scale up will have a positive, progressive impact on revenues and cash flow generation.
Jubilee is now back at full production in South African from its chrome and PGM recovery plants – with the PGM price still at decade highs and generating significant cash flow for the company. Jubilee reports that it currently has £9.2m in cash which gives it a buffer for its expansion plans. This year is a time for Jubilee to exploit its strength and set itself on its next phase of growth.
The most important sulfide sources, the copper-cobalt ores of Congo (Kinshasa) and Zambia, are processed in the conventional manner to produce a copper-cobalt concentrate. This is then treated by flotation to separate a cobalt-rich concentrate for treatment in the cobalt circuit. Separation flotation utilizes pneumatic and mechanical agitation to produce air bubbles that carry the mineral particles to the surface. Different reagents are used to attract the cobalt minerals to the bubbles in preference to copper. Cobalt concentrates, which can contain as much as 15 percent cobalt, are then processed further, using either pyrometallurgical or hydrometallurgical extractive processes.
If the copper and cobalt ores are in the oxidized state, copper can be removed by electrolysis in sulfuric acid solution and the cobalt precipitated from the spent electrolyte by adjustment of the acidity of the solution. Cobalt is again eventually obtained in the metallic state by electrolysis.
https://www.britannica.com/technology/cobalt-processing
The Petersen case – Burford’s stake in a high-profile claim against Argentina’s expro- priation of YPF – has a carrying value of $773m (£621m), including $734m of unrealised gains.
Analysts at Peel Hunt noted that while the case has made up 85 per cent of unrealised gains to date, Burford would not have turned a profit in the past three years without it.
Of equal interest was a theoretical defence for the participation of one of Burford’s
managed funds in last year’s $100m private sale of a stake in Petersen, which management said could only have been done with the independent consent of the fund’s advisory committee.
Analysts at Numis upgraded their forecasts to earnings of 124¢ a share for 2020 and 466¢ for 2021.
We are also less con- vinced that Petersen is the slam-dunk asset some claim it to be. We remain neutral. - HOLD
Investors Chronicle 01/05/2020
30 April 2020
Newcrest Mining Limited (ASX: NCM) – Trading Halt
Description
The securities of Newcrest Mining Limited (‘NCM’) will be placed in trading halt at the request of NCM, pending it releasing an announcement. Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the mal trading on Monday, 4 May 2020 or when the announcement is released to the market.
Issued by
James Gerraty
Senior Manager, Listings Compliance (Melbourne)
Our CEO, Leon Coetzer, caught up with ************** to discuss our recent interim results and the effect of COVID-19 on operations
"It pays tremendously into our favour that we have such a solid strategy"
?? Listen here: bit.ly/2Vqlt9o
January 2020 R F Cambrian Copper Projects Review - Cascabel identified as the No 1 project worldwide with a high chance of M & A activity.
“It appears that there is a lot of interest in SolGold and a competitive bid could occur if the Cascabel project achieves expectations. We believe there is a High possibility of a third party (including the minority shareholders) looking to acquire the project outright or taking a significant interest in the medium term.”
https://www.rfcambrian.com/publications/system/files/equity_publications/Copper%20Projects%20Review%20-%20Jan20.pdf
• At the flagship, Alpala project, the company points to a discovery cost of US$1.41/oz of gold equivalent or 3.4US¢/lb of copper equivalent for its current resource which amounts to 2.05mt of indicated mineralisation at an average grade of 0.6% copper equivalent (0.4% copper and 0.29g/t gold) with an additional 900mt classified as inferred at a lower 0.35% copper equivalent grade (0.27% copper and 0.13g/t gold).
• A high grade core at Alpala has been identified containing 400mt, classed as indicated, at an average grade of 1.49% copper equivalent which, based on the company’s May 2019 PEA analysis, is expected to assist in the delivery of a 3.6years payback of an initial US$2.7bn investment producing an NPV8% of US$4.4bn and IRR of 25.9% at a copper price of US$3.00/lb and gold price of US$1300/oz and silver price of US$16/oz.
• The company analysis is based on a mining rate of 50mtpa using twin 5km long decline access to develop the underground mine using low cost mass caving to produce an average 425,000tpa of copper equivalent or 1.6moz pa of gold equivalent in concentrate over the first ten years project life.
• Solgold’s estimate of a US$0.25/lb C1 cash cost of copper production for the first 25 years of the project (LOM US$0.91/lb) is reported to position Alpala comfortably in the lowest cost quartile of world copper production.
• A timeline shown in the presentation shows that the company is expecting to complete its definitive feasibility study for Alpala in Q1 2021 leading to the start a three-year construction period in mid-2021 and to a hand-over to operations in mid-2025.
• The company also stresses its social and community engagement, provision of employment opportunities and health, safety and environmental initiatives.
Conclusion: Although much of the information in Solgold’s PDAC presentation has been made public in previous announcements, the presentation is a useful synopsis which we recommend interested parties to scrutinise at their convenience.
*SP Angel act as Financial Advisor and broker to Solgold
CBD oil products ‘could be off the shelves in a year’ https://www.bbc.co.uk/news/business-51480940
9 January 2020
W Resources Plc
("W" or the "Company")
First Shipment from New Concentrator Plant
W Resources Plc (AIM:WRES), the tungsten, tin and gold mining company with assets in Spain and Portugal, is pleased to announce it has sold the first shipment of tungsten concentrate from the new La Parrilla concentrator plant, the proceeds of which were received in January.
Production built through December 2019, with the move to 24-hour operation confirmed on 18 December. This was partially offset by a number of planned and unplanned shutdowns during the month to adjust and fine-tune equipment, which would be expected at this phase of the process. As a result, production in Q4 2019 was 21.4 tonnes of tungsten concentrate and 7.9 tonnes of tin concentrate, which is planned to ramp-up substantially in Q1 2020.
Michael Masterman, Chairman of W Resources, commented: "We are pleased to have produced nearly 30 tonnes of tungsten and tin concentrate (combined) and sold and banked proceeds from our first tungsten shipment from the new concentrator plant. Highlights include reaching target product specifications early in ramp-up and a higher proportion (28%) of tin in the product mix relative to the 10% in the August 2017 Final Investment Decision ("FID") report. Mining and grade control is broadly in line with 2017 FID with higher tin grades currently driving higher than expected tin production."
W expects production to build substantially in Q1 2020 with a full three months of production (majority of production in Q4 2019 was in the month of December) and higher than expected tin production and revenue. Debottlenecking initiatives and completion of contractor rectification work, which are normal at this phase of the ramp-up, should also contribute to production increases.
You are warmly invited to attend Proactive Investors' One2One Forum which is taking place on Thursday 7th November from 17:45 onwards at The Chesterfield Mayfair Hotel (35 Charles Street, Mayfair, London, W1J 5EB)
Hopefully there will be a full trading update issued this week - as indicated by Leon in the recent Proactive interview (7’ 30”).
Saga announced that profit halved to £52.6m in the first quarter of this year, in line with analyst expectations, after it announced a “back to basics” strategy reset. Brokers at Peel Hunt said the firm’s return to direct insurance distribution, new product launches, better retentions and solid cruise bookings have stabilized the business.
Analysts said the shares are trading at a significant discount to “what we believe is intrinsic value”. Peel Hunt made a “buy” recommendation and issued a target price of 110p.
City AM 26/9/19
Wolf Minerals (WLFE LN) SUSPENDED – Liquidators selling spirals from Drakelands • The announcement today by W Resources included the information that the liquidators of Wolf Minerals had sold 72 spirals from the mothballed Drakelands mine in Devon.
• It is unclear whether all of the spirals from Drakelands have been sold or whether some remain on site but their disposal suggests that efforts to reopen the mine under new ownership are proving difficult.
• In our opinion, as long as the principal items of the crushing and grinding circuit remain on site, the re-opening of Drakelands remains relatively achievable as spirals should be comparatively inexpensive and straightforward to replace. However, with the current price of the benchmark ammonium paratungstate price languishing at levels last seen in early 2017, potential purchasers may be few and far between – or may simply be taking a hard-headed view of the acquisition price.
• In addition to the continuing difficulties at Drakelands, yesterday’s news of the setback to funding the Sirius Minerals project in Yorkshire casts a further shadow over hopes of a resurgence in the UK mining industry.
SP Angel posted on #WLFE ****************************/activity/154694
Leon Coetzer, Chief Executive Officer, says: "I am delighted to present Jubilee's Six Monthly Operations Update which showcases the exceptional progress we continue to make across our portfolio of metals processing projects - delivering against our targeted performance and bringing new operations on-line.
"Such a marked increase in combined revenue - 75% against H2 2018 - reflects our sustained focus on increasing and diversifying our earnings base and maintaining strong margins. This has been achieved through a considerable uplift in production figures across our portfolio, both in chrome and PGMs. Notably our chrome performance has seen significant growth which is attributable to our ground-breaking DCM fine chrome operation and Windsor chrome operation being brought online during the period. Replicating this success, we expect to see a step-up in PGM production following the Windsor PGM project being brought into operation during July 2019.
"With the acquisition of Sable Zinc Kabwe Refinery for the processing of the Kabwe material fully completed, our technical and operational teams are focussed on bringing the project on-line against accelerated timelines. This means we will soon be adding zinc, vanadium, lead and copper to our commodity basket, an important element of our on-going development strategy to diversify our earnings through additional jurisdictions and increased metal exposure."
Rockhopper Egypt Pty Ltd and the Abu Sennan Concession
Rockhopper Energy Pty Ltd has been operational in Egypt since 2016 and the company has a 22% interest in the Abu Sennan concession.
The Abu Sennan concession is located in the prolific Western Desert region in Egypt. It contains seven operational fields with seventeen producing wells. Current gross production has recently been reported by Rockhopper Egypt at over 5,100 boepd (over 1,100 boepd net).
The directors believe there is significant potential to increase production through an infill drilling programme which is currently in progress. This has already been reported by Rockhopper Egypt to have boosted gross production by over 1,000 boepd since the beginning of the year, compared to average gross production of 3,700 boepd for 2018. Most recently reported (end-2018) working interest 2P reserves are 2.64mmboe (net entitlement 1.12mmboe), although this does not take into account the recent drilling results.
In addition to the seven production concessions, the Abu Sennan concession also contains a large (653km2) exploration area, with a significant prospect and lead inventory. The historic drilling success rate on the concession has been 80%.
The concession partners are Kuwait Energy (25% and operator), Global Connect Limited (25%) and Dover Investments Limited (28%).
Very valid point Jaf - $94 is an average cost - spread over the initial 5 / 6 years of production.
Actual cost will vary with differing production levels / strip ratios / grade / tin credit etc.
At the anticipated 20T production level using low grade feed stock the actual costs may not even be covered by the revenues generated - but this is only be expected at this early stage of the ramp up process.