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Jonah
I can't say when and if Eland has officially ceased. It is just an educated guess based on the information available to us.
As to number of ounces attributable to Eland, JLP will not disclose that information. The only way to try to calculate it is to look at the capacity of Inyoni which is/was about 52,000 tons/month. Then look at the tons processed in each operations update which was 481,353 in calendar H1-2020 (impacted by COVID) and 595,664 in calendar H2-2020 (Windsor offline in Dec 2020). If we assume the yield was the same at Inyoni and Windsor/Eland then Windsor/Eland was contributing about 45% of the PGM ounces.
I think it is prudent to assume the Eland/Windsor operation has now ceased. The WH Ireland broker note earlier this year assigns nil earnings to Eland/Windsor PGM for FY2022.
The latest 6 monthly operations update omitted the number of PGM tailings tons processed. This is the first time this metric was omitted since PGM operations reporting started in 2017. This metric was useful to calculate how many ounces were recovered per ton of tailings material processed. Let’s call this calculation, the “yield”, just for simplicity. There was no upward or downward trend of the yield over the past 4 years so if you take the average yield, you will see that every ton processed delivered about 0.045 oz, i.e. it took 22.2 tons of tailings to produce a single PGM oz.
The PGM tailings from the Eastern limb are estimated at 16 500 / month to deliver an estimated 14 500 oz per annum (or 1,208oz per month). The Eastern limb tailings suggests a yield of 0.073 oz per ton. So if and when the expanded Iyoni operation hits it’s target capacity of 75,000 tons of month the PGM ounces produced should be:
16,500 * 0.073 yield = 1,208 (Eastern Limb tailings)
58,500 * 0.045 yield = 2,632 (Historical/Other tailings)
Total is 3,840 oz per month for annual total of 46,080 PGM ounces.
If the Eland operation is no longer contributing to PGM production then JLP could be heading for around 40-46K PGM oz for FY 2022 (after considering the outstanding construction, commissioning and ramp-up of the expanded Iyoni operation).
I will be happy to hear CONSTRUCTIVE comments on this post.
Dorfan
I heard the same thing but Leon suffices copper earnings comments with the word "potential". "Earnings" are quantifiable, "earnings potential" is less so. As for the timing, Leon said "you will start to see...". Leon is choosing his words wisely, not really committing JLP to any short term target for the copper business. They have made that mistake in the past. If PGM earnings remain constant at GBP 60 million, I can't see how copper production exceeds the PGM earnings until FY2023.
Dorfan
Just to be clear, I am not upset with JLP, its performance or its management. The intention of my initial post was to initiate a constructive discussion as to why the share price has weakened, at the very least to ensure there was nothing more sinister than the items I listed. I think that is my only disappointment :)
gotreal.
Just as I expected. You not have pointed out any falsehood. My initial post was drafted yesterday morning and posted around the same time as the interview. My concern of a capital raise was valid at the time of my initial post, so much so, that the interview between Zak and Colin addressed that concern.
What about the other items in my initial post? I assume you will not tackle those items.
Gotreal....If you are referring to me spreading falsehoods, point it out or shut up.
Dorfan
To suggest that "negativity has no place in Jubilee" is inappropriate and I am surprised to hear you say that. This chat is for discussion, both positive and negative, but of above all, fact rather than opinion. I am a long term holder with 3.7million shares. Whilst I want JLP to succeed, I don't want to just hear endless hype, promises, favorable opinions. If you want to have a healthy debate, you or Gotreal could try to tell me which one of the facts in my initial post (apart from the potential capital raise) is just my opinion and not fact.
If you are up for the challenge, you might also help me understand why the chrome earnings per ton are still at a miserable level when we were told a long time ago that the chrome contracts had been re-negotiated and we should expect something like USD$20/earnings per ton.
gotreal, you're welcome.
Jamminvh, I wouldn't bet on a capital raise after today's interview with Colin Bird. The interview addressed the obvious concern about where the funding for the next 6 months will come from given the potential shortfall in operating cash flow. JLP, according to Colin's statements, will rely on debt rather than equity to cover the potential shortfall. If this is to believed, then a few of the concerns in my initial post have been allayed.
Gotreal, I just watched the interview with Colin Bird. I am glad to hear that JLP are communicating "no dilution". Let's hope this message lifts the share price.
gotreal...Which Colin Bird interview are you referring to? The interview where he said we had close to 500 million tons of copper tailings or the interview a few months ago where he said the copper operations were going gangbusters?
For those with short term memories, Leon has said "no more dilution" many times and then just did the opposite. I am not predicting a capital raise, I am just saying the chance of a capital raise is there. If you don't agree with the increased probability then feel free to put your head back into the sand.
Company specific reasons for share price weakness:
- Leon stated JLP invested GBP 35 million in the past 6 months and plans to exceed that in the following 6 months. This means that JLP could be spending more cash than it is making (need to consider non-operating cash costs and tax). A capital raise is possible and given JLP’s history, it is very possible.
- Average PGM basket price from 01-Jul-21 is currently below the 6-month average to 30-Jun-21. It is currently down by 15% in ZAR. This could put more pressure on generating sufficient cash for the capital expansion.
- Copper production/earnings for the 6 months ending 30-Jun-21 were disappointing. Either the tons produced or earnings per ton were considerably lower than the previous 6 months.
- The 25K ton copper production target is within 4 years. The target was within 4 years in August 2020, so is it always going to be within 4 years?
- H2-FY2021 PGM Production was considerably lower for the 6 months ending 30-Jun-21. Even though JLP achieved its 50K oz target, there is no guidance on the next 6 or 12 months. Eland operation remains a mystery.
- Increased PGM production unit cost. Whilst this was apparently more than offset by the higher PGM basket price (due to higher weighting to Rhodium) it raises the risk to JLP if the rhodium price decreases.
- Potential eastern limb PGM expansion. This will require more capital, hence putting more pressure on available funds, thus increased chance of capital raise.
JLP has a habit of obscuring or omitting negative details. That in itself warrants a discounted share price.
Based on today's figures, I expect an EPS of between 0.018 and 0.019 pence for the financial year ending 2021. It looks WH Ireland were pretty much spot on with their estimates.
SeisNav
Sorry, I made a mistake, I should have said
So either the earnings per ton has INCREASED since 31-Dec-20 or production decreased. Which is it?
Either way an increase of earnings of GBP 100K is hardly "gangbuster" as mentioned by Colin Bird.
I am struggling to figure out the copper production figures this half, earnings per ton, etc. What is clear is that JLP earnt GBP 1.9M for this half compared GBP 1.8M in the half ending 31-Dec-20. What is not clear is the tons produced. I had 1,447 tons produced for the half ending 31-Dec-20 giving earnings of GBP 1,244 / ton. The operations update states 2,026 tons were produced but the period in which the 2,026 tons were produced was vague. So either the earnings per ton has decreased since 31-Dec-20 or production decreased. Which is it?
JLPositive
I don't think JLP include cash at hand in the operational updates. Anyway, don't expect a healthy cash balance as at 30-Jun-21 or 31-Dec-21, it appears JLP are spending every penny of the operational cash flow on their expansion plan. This should mute any discussion on dividends for at least another year or two.
Dorfan
As for the PGM production, Leon recently said the PGM production estimate is above 50,000 oz for the year ending 30-Jun-2021. Based on that comment, I assume an amount above but close to 50,000. This implies that the half-year ending 30-Jun-2021 production estimate to be 23-24K oz which is less than the 28K oz produced in the half year ending 31-Dec-2020.
I will be happy if JLP beat the GBPX 1.9 EPS estimate but I wouldn't bet on it.
Dorfan1
I think the WH Ireland figure of GBX 1.9 eps is a fair estimate. Have you considered the tax in your calculations?
When Leon mentions the "significant process breakthroughs" at the 5:45 minute mark of that interview it is interesting to note his facial expression, specifically his eyes.
The potential copper earnings can be significant but there are risks as it is a new part of the JLP business. Leon's look to the sky gives a hint that all is well in the copper part of the business. Of course this is my interpretation but coupled with the promise a formal announcement in the future, I am confident I have interpreted Leon's message correctly.