Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Builder
That is a good question. JLP is a good company to be invested in and I am not advising anyone to sell or buy at the current price. JLP was a screaming buy around 3p many moons ago and I said as such. My more recent comments serve as a warning of some of the risks ahead and are probably just a futile attempt to realign some posters' unrealistic expectations. There are a few posters on here that can only see the positives and think JLP is best/cheapest company on AIM. I am still invested because there is a good chance that the share price will increase over the next couple of years (if JLP don't dilute it to smithereens).
Gotreal
A) Investor confidence: What are you using to measure this metric, just your own opinion.
B) Earnings drop: Yesterday's announcement already indicated a massive drop in PGM earnings. The increase in copper earnings will not offset the drop in PGM earnings. I could provide you the EPS estimate for FY21/22 but you wouldn't believe me anyway. The PGM basket price will need to revisit the recent highs very quickly for any chance of avoiding an EPS drop in FY21/22.
C) Share dilution: You are the least likely person to be able to predict a JLP fund raise (refer to your comments days before the last fund raise in 2021). Yesterday's announcement gave you clues (commercial figures never disclosed before) about the need to progress the Eastern limb expansion. JLP is also in midst of a massive copper expansion. You can also add Cyprus and Kabwe into the capex picture. It is more than probable that JLP will continue to spend more than it is earns for the next 6-18 months. A fund raise is very probable. All we need now is for Leon or Colin to tell us no more dilution and then it will happen.
MikieSunday...you are right, I do have an agenda. It is to bring balance to the message board when people such as yourself post like a giddy cheerleader. Look at the share price performance of SLP (consider the dividends too) over the same time period of your JLP investment and that should answer your question as to where you would be without dilution. If you still like dilution after that, buy a calculator or take a math's lesson.
As for your other fanciful comments about earnings of $10M or $15M a month, those sort of profits are still a long way into the future and there is no guarantee that is going to happen. Let's see if JLP can produce solid copper earnings at scale, i.e. when they are producing over 10K ton per year. Once we see evidence of that, then you put the champagne in the fridge. I might even join you in a giddy cheer. If you still need to dream about earnings of $10M or $15M a month, do it whilst you are sleeping rather than on here.
gotreal...I think you confuse arrogance with common sense. Look back at my posts over the past year or so and feel free to tell me where I was wrong. I doubt you will do it, you had your blinkers sutured a long time ago. I still haven't forgotten you owe me an apology the last time we tangled.
MikieSunday
Simple Simon can think what he likes, he can also think that copper unit costs are USD$4,000 per ton even when JLP already told us they will be ~10% higher than that. The fact is, nobody knows what the true copper unit cost will be, including the JLP team. Don't believe every rosy article you read. Best you brace yourself for delays, higher costs, dilution for expansion plans, blah blah blah, all the usual stuff.
Mikiesunday
I suggest you google the definition of exponential. JLP earnings are about to fall this year and whilst they should rise next year, they will not do so exponentially.
After reading today's announcement again, I see that PGM production estimates for FY21/22 are now reduced to 43 000 to 48 000 PGM ounces. EPS for FY21/22 will be well below the 1.9p estimate. Add that to the bad news.
Only a sharp rise in PGM prices (rhodium especially) will prevent a terrible set of financial year figures. Go rhodium!
Arryaccountant...They are trying to say that it doesn't make a lot sense to transport the material to Inyoni but it makes sense to secure the tailings now before somebody else does. In previous statements JLP said the increased transport costs were offset by higher rhodium content/prices. It is another hint that the eastern limb expansion is coming.
Not bad? Let's point out some of the bad points.
The expanded Inyoni plant was meant have a capacity of 4,500 oz per month (refer to JLP website). Today's announcement reduces that capacity to 3,666 oz per month. I highlighted this topic many months ago and many posters gave me hard time about it. The Inyoni downtime was touted as having minimal impact on production but today's figures show it was anything but minimal. It is really hard to trust JLP when things like this occur.
PGM production capacity is now 60,000 oz per annum (44k from Inyoni, 16k from Windsor JV). Today's announcement makes it clear that the Windsor JV is still in play (good news as this generates more cash to fund near-term expansion). In order to meet the FY21/22 production guidance of 50k oz, they will need to operate at full capacity, including the full Windsor JV capacity to hit that target. Reading between the lines, it seems JLP is reluctant to use the JV, even going so far to publish the earnings split, something they have never done before. Other statements seem to be preparing investors for an expansion on the Eastern limb, again, publishing transport costs. The bad news here is that the Eastern limb expansion will cost tens of millions, money which JLP doesn't have (smell of confetti cannon fills the room).
Whilst copper production increased, the copper earnings per ton dropped by ~25%. I will give JLP a pass on this given the copper ramp up will destabilize copper margins/earnings. I am even prepared for the copper margins to go lower over the next 6 months and that is fine. It is the long-term copper margins/earnings that will be most important and its a wait and see approach.
Wake me up in 6 months when the copper results are out.
uktruman
I expect the half-year results to be lower compared to previous periods. This is due to lower PGM production and lower PGM basket prices so it should be obvious to all. I am guessing that the share price will not rise until the results are out and most likely drop when they are released. The good news is that the market should immediately look towards the current half year and focus on recovering PGM prices, PGM production and more importantly the upcoming step-change in copper production. With all that said, the copper production and copper earnings will trump all the above comments so unless JLP provide guidance (never happened before) on the copper production/earnings it could be another 6-7 months before we know how profitable the copper business is.
BushyTailed...some of us welcome negative comments but some of your comments are inaccurate or just plainly false.
Regarding copper production, yesterday's presentation https://jubileemetalsgroup.com/wp-content/uploads/2021/12/Jubilee-Corporate-Update-122021.pdf shows the copper produced in FY2020 and FY2021 (Page 8) and the copper production estimates going forward (Page 21). Whilst the copper production has been slower than originally anticipated (if you go back 2 years), you can see that Q1 2022 and beyond shows a dramatic increase in copper production.
Gotreal, if JLP want to expand, they have enough on their hands with the copper expansion. If they want further expansion, they have Kabwe and Cyprus to get on with. I suppose you don't remember the excitement that Kabwe generated, all that Zinc, Lead, Vanadium, all those profits, salivating stuff right? After many years, many tens of millions of pounds and many rounds of dilution later, we about to see if some of that investment is going to pay off.
Building a team for further expansions seems like a great headline but I prefer they focus on projects they have already sunk money into rather than chasing other projects. If JLP win the lottery and sell Tjate and have the funds to pay for the expansion then they can do whatever they like.
@NorthernShark
If JLP don't participate in the funding of the new projects, the profits will be peanuts.
Great to hear that JLP is planning for expansion but in the short to medium term it means very little. Given JLP's love affair with dilution, no matter what JLP says now, there will be the expectation of further dilution. This will probably keep a lid on the share price for obvious reasons.
JLPpositive, I don't think JLP will hit 1.9p for a few of reasons
- Lower PGM production based on disruption during expansion and loss of ounces from Eland.
- Significant drop in PGM basket prices.
- Copper ramp-up expected to have a higher unit cost.
- More shares on register due to recent dilution.
I don't have sufficient numbers to come up with a proper estimate but I am guessing a 5-10% fall in EPS at this stage. I will be happy to be wrong.
Yes it seems that WH Ireland have updated the errors. Most importantly EPS for FY21/22 was changed from 4p to 1.9p and the Sable copper revenue for the same period was changed from USD$84M to USD$37.7M. The copper revenue is now in line with my expectations. It sucks to be right sometimes. I still think EPS of 1.9p for FY21/22 is a bit optimistic but I don't think it matters all that much, the Sable copper earnings is the main driver for the next 12-18 months.
Beware, there are definitely some sloppy numbers in the latest WH Ireland note. EPS for FY21/22 is 4p which is completely wrong, even the breakdown of the estimated financials don't support such a high figure. WH IE also estimate copper revenue to be USD$84M in FY21/22, JLP might hit USD$40M based on the copper production estimates.
Much easier access at https://jubileemetalsgroup.com/wp-content/uploads/2021/12/FN-JLP-071221.pdf
Billyboy
I think it would be a good idea to consolidate the questions. Here are my questions:
Windsor PGM/Eland operation: It is not clear if this operation has been discontinued? If not, what is the likelihood of PGM production from this operation in the near term?
Kabwe: There were plans to commence Zinc recovery in CY Q3 2021. It is now understood that the Zinc operations are currently “under review”. Can you clarify what has caused the change and when operations are likely to commence for zinc, lead and vanadium from Kabwe? Does JLP have any legal obligation to process the material at Kabwe and remediate the site?
Chrome operations: We were led to be believe that contracts were put in place to ensure fixed/additional revenue/earning from Chrome operations. We are yet to see evidence of this. Given the chrome recovery output has expanded since then, can you comment on the chrome revenue/earning structure going forward?
As per the annual report....
"Windsor PGM Operations – South Africa
Windsor PGM is a South Africa-based PGM recovery unincorporated joint venture with Northam Platinum’s Eland
Plant operations. Under the joint venture, Windsor PGM has secured access to the PGM recovery operations for the
recovery of the PGMs contained in the tailings produced by Windsor Chrome Operation. The additional processing
capacity offered under this unincorporated joint venture is used for the processing of overflow material in excess of
Inyoni PGM’s processing capacity."
JLP seem to enjoy creating obscurity. Is Eland dead or not? I will be adding this to the list of questions for the AGM, I suggest we all ask the question to pressure JLP to put this topic to bed.
Dorfan
Please help me understand how the BMR agreement has been a "complete winner".