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Harry's usually fairly conservative when making forecasts. But in his understated way he does seem very excited by this large maiden resource and volunteered that he would not be surprised if it ended up 3 to 4 times the size reported maiden resource. If he turns out to be right that will be a very big resource indeed. Which other mining explorer/developer has such promising large projects in its portfolio? Of course the financing is always another question, but the market does seem to be incredibly cautious here.

its a directors talk interview and you can find it on their home page.

Hi Total Trader, thanks a lot for sharing your broad assumptions about the CAPEX requirement based on recent announcements., which in general seem to be quite reasonable. One of the biggest complaints I have had about Jubilee is they do not publish their annual target CAPEX and how it is expected to be funded. Hopefully this will change in this year's annual report and accounts.
Leon has of course already indicated the need for loan finance by utilising the strong balance sheet in addition to the operational cash flow that can be allocated for CAPEX. Of course it is right to be cautious about how much operational cash flow will be available and the quite significant changes in precious metal prices that can occur, reinforces caution.However saying that I am somewhat more optimistic than you are about the amount of operational cash flow that could be available to fund CAPEX. If at current PGM prices and assuming we are producing 5000PGM ozs a month as has been indicated, we should be easily in excess of $2.4m operational cash flow a month available for CAPEX, assuming nothing from copper or chrome.. Maintaining that level of operational cash flow though is another matter.
As things stand I am comfortable that Jubilee should be realistically able to fund the significant CAPEX already announced without resort to shareholders. But if the additional two copper deals Leon is talking about materialise with the need to extend the Sable refinery, and/or the extension to Inyoni is required within your 18 month window, which it may well be, then Jubilee will need a lot more debt and possibly funding via institutional shareholders to bring all of the "trains into the station at the same time".
Just a small correction. The increase in reported cash from presumably the end of May to the end of June in the RNSs was near to £1.7m so just over $2.1m. But of course one month's cash figures are open to loads of questions without the current assets and current liabilities figures as well!

Total trader, thank you for your detailed thoughts. Could you please elaborate a little on how you have arrived at the monthly cash burn figure of $2.4m per month.

Exactly 3 cardbrag. That’s why Leon is trying to tie up the copper dump deals so quickly. I was expecting news about the small scale licence renewal last week.There is a complication with it as Jubilee is taking over the BMR company that holds this licence, but that company also holds the large scale licence as well, which Galileo wants. Leon is keen to clean up the BMRs company’s balance sheet by removing the large scale licence asap and are helping Galileo in their submission to the Zambian authorities to achieve this.

He also has a few hundred thousand pounds of unpaid salary tied up in the company. From the days when cash was really tight. His real motivation for me is proving the mining world doubters wrong. It is possible to build a large metal producing company without a mine! In the Q&A at the mineprophets show he was more than happy to share that Glencore had been amazed that Jubilee had produced grade A copper cathode from tailings they had left on site which they had considered as worthless in just 4 months, and at a good margin to boot! That’s the sort of thing that drives him on in my opinion, not money incentives.

This is why I am invested in this company and why I believe it will shortly attract large institutional share support to fund the massive growth that is now underway. I am fully aware of the past, but Jubilee's record over the last three years I believe has been excellent. Yes one or two hiccups but not usually entirely through the company's own fault but more to do with partners they were JVd with. Not long ago the company was flipping from one short term project to another, with no real negotiating power to control its own destiny. Even the Hernic project was not that great as once the invested capital had been repaid Jubilee's share of the earnings was as little as 15%. But now Jubilee completely owns the Hernic project (renamed Inyoni) and it is working to full capacity with complete visibility of significant earnings for a minimum of 4 years. It completely controls and owns a significant chrome processing plant, which we know already has enough feed to maintain full capacity for the next 3 years and provide significant feed for PGMs. Jubilee owns its own metals refinery in Zambia which will be at full capacity within 2 to 3 years and then for the next 10 years at least based on contracts secured. The known margins on the PGMs and the indicated margins on the copper provides visibility of profitable earnings for the next decade. and will support a regular dividend in about two to three years time. Assuming no major operational hiccups, political interventions or massive long term commodity price reductions, the current level of annualised earnings (around £25K to £30K from PGMs alone) will more than double in 2 to 3 years time once the known copper projects start to really come into their own. Jubilee is fast becoming a highly respected metals processing company, and in Zambia appears almost to have a monopoly position for on surface processing of dumps with what appears an excellent relationship with the Zambian government, which should be reinforced once the Kabwe tailings project gets underway and the lead pollution is reduced. Jubilee seems to be in the right metals over the next decade as well, based on expert opinion. They have a highly respected CEO, technical and project management team whose stock is improving by the day. Admittedly funding for new projects, and maybe even just 5 years ago just to keep the lights on, has been a significant problem and unfortunately share dilution has often been the only way. This should now be coming to an end but of course cannot be ruled out in the current massive growth phase. But any placing should be to produce additional profitable growth now, and it should not be massively discounted, and should come from long term institutional sources, not stock flippers. For the first time I now look at the company as one I want to invest in for the medium to long term and not one like most others on AIM where one dips in and out , and just trades.

Another interesting interview. But listen to the end! Looking at an additional two projects. And contemplating expanding the refinery. Sounds like the target production will eventually be in excess of 25K tonnes of copper cathode. Institutional support coming especially now Jubilee in excess of £100m market cap. Exciting times. Buckle in for the ride.

Kaiser, I am not aware the fine chrome plant has been built yet at Windsor. The existing one is being transferred from DCM to Inyoni, presumably because we own 100% of the chrome rights at that site, so it will be more profitable based there. I would anticipate a fine chrome plant eventually being built at Windsor but not until some improvement in chrome prices is on the horizon.

At present the Windsor PGM project relies on the PGM processing capability at Northam. No idea how long that arrangement is contracted for, but we lose 40% of the earnings and pay to transport the ore feeding Northam’s share from Windsor to Northams PGMs plant. This is why Leon indicated his desire to build a significant extension to the existing PGM plant at Inyoni, so once our contractual commitment is met, Jubilee take over all the PGM processing of upgraded material from Wiindsor. This is pure speculation but I think this extension might be built sooner than expected as we need to find a home for processing the DCM upgraded material. Leon admitted that economically it would be feasible to transport this material to Inyoni.

At the half year point, I believe 200 tonnes of copper per month was being produced, 100 from the on site tailings left behind by Glencore and 100 tonnes from 3rd party ROM. I believe target from 3rd party providers by the end of Q3 is 400 tonnes. No idea if there are any own tailings left to supplement this figure.

Very interesting interview. Project Roan will utilise all of the current remaining capacity at Sable Refinery and when fully implemented (within 12 months) refinery will be producing 14-15K tonnes of copper cathode p.a. The copper concentrate grade being fed into the refinery will be 10/12%. To expand the copper cathode output and make room for Project Elephant they will need to further upgrade the copper concentrate being fed into the refinery to 15/17% grade.At this grade the refinery will produce the target 25K tonnes of copper cathode p.a. So the extra capital expenditure at the refinery in about 18 months time will solely be the for the new plant to further upgrade the copper concentrate to 15/17%, hence why Leon has indicated a relatively low amount of capital required for the expansion in output.
A further throw away line in the interview was that the 3rd party chrome feed means the South Africa chrome plants will be operating at full capacity for the next 3 years. The only plant that is taking 3rd party feed is Windsor I believe. Another RNS shortly about who will be supplying such a large 3rd party feed and on what terms, especially our cut of the subsequent PGMs?

If I recall correctly, Leon indicated in the interview on mineprophets with TW that dividends would be on the agenda once projet elephant came on stream in two years time, which is probably during the 2022/23 accounting year.

Othodelagery, you put my point over so much more succinctly. The only thing I really cannot understand is why the AISC is going to be up about $100 for the whole year’s production A much better explanation is required as it implies some big additional costs unplanned at the beginning of the year are to still come through in H2 2020. Are you able to enlighten me before I write to the company.

Miami if you have no trust in DB the key person in this company then I assume you are not invested here. If I had a similar feeling about the key management of a company I would certainly not be investing in it or wasting my time on its bulletin board.

What will impact on the share price favourably? Let's assume the current favourable gold price environment remains as it has not been properly priced in for this share yet. The extensive drilling and the impressive results reported should lead to a significant life of mine extension announcement in Q4. It could be as much as 2 years. The recent broker note forecasted a 10p per share price rise for each year of extension to the LOM. If the current favourable gold price environment is maintained, then a Q3 confirmation of meeting the target of about 30Kozs would restore operational confidence and would be beneficial in showing up up the massive cash generation at Yanofalina. Any positive progress with the new mine and the Dugbe project shoudl also help , but the market seems to be ignoring both of these significant projects for the time being.

Leon was pressed quite hard about Tjate by Tom Winnifrith in the interview on mineprophets on 18 July. To my mind, and not just for Jubilee Metals, it is worth paying £2.99 to listen to this interview, and to access the on line Questions submitted to Leon and his answers over a one and half hour period. In short Jubilee will not be developing an underground mine at Tjate on their own or in partnership. The resource will have to be bought by a major company and the higher the expected long term PGM basket price the more likely that this will occur. When? Who knows? But there are two large companies with existing mines on the flanks of Tjate and working towards the Tjate resource. The most likely scenario is that the buyer will be one of those existing companies or perhaps a chinese company which takes over one of the existing mines as well as buying the Tjate resource.

Good summary Moneyhawk.
The massive increase expected from operational cash generation is highlighted in the WHIreland note. The cash cows in the 2021 accounting year will be the PGM projects at Windsor and Inyoni. In the model developed by WHI, the total free cash expected to come from these projects in the 2021 accounting year is $42m, up from a predicted $17m in the 2020 accounting year.
Hopefully there will also be some additional free cash from the large chrome projects, and the Zambian copper projects as they get ramped up.

The net cash figure used in company presentations was a simple tool comparing the cash and gold held assets with the borrowings from the bank on a single date.. On its own it is not really that meaningful. What is more important on any particular date is the comparison of the current assets with the current liabilities i.e the ability of the company to meet its known liabilities over the next 12 months with the known assets it expects to be able to use to pay for them. If the current liabilities are much greater then either the company must manage the shortfall from the generation of free cash in the 12 month period or it must borrow or both. At the 2019 year end the current liabilities exceeded the current assets by over $55m. Yes the bank debt is coming down on schedule but what is happening with the overall net current liabilities amount? I hope that figure is also reducing by more than the bank debt being paid off. Until we get the interim figures we will not know the answer. Until we see the cash flow statement in the interims we will not know exactly how all the cash is being used. In the past I have found Hummingbirds notes on the report and accounts well explained and all the answers to some bizarre apparent allegations on this board will be answered probably in about 3 weeks time. That is if those that are trying to imply money has walked out of the back door can be bothered to read the interims properly at that stage.

Personally delighted if SP goes down. As a longer term investor I can pick up some even cheaper shares. I know that investing in a company operating in West Africa will attract a discount for the higher perceived political risk, the discount on this share seems way over done to me. That’s why I am buying more reinforced by an RNS providing significant confidence for the remaining part of 2020.

With the COVID operational difficulties these are excellent results. Other than a small blip in one quarters production the future looks fantastic. The Dugbe project given a true market value and the new mine both moving forward rapidly and not even taken into account in the share price. Very confident statement about full year target production being hit. We are set up for a potentially incredible 6 months on all fronts boosted by a booming gold price. What is not to like?