Member Info for Jammer1

I understand the hurt and anger of BMR shareholders. But the fact is if JLP had not invested in BMR the company would probably already gone bust.by now. JLP hold all the cards and without them BMR shareholders would have no hope of getting anything. Being angry and insulting to JLPs directors is not too clever.
JLP,s majority stake in the Kabwe JV company, and their right to exercise a purchase of the subsidiary company that holds the small scale licence, ensures they have in effect full control of the Kabwe tailings project. In effect BMR now has no real say in it. And this project is the only source of potential revenue for BMR. Not a good position to be in.
On top of that JLP also owns 30% of BMR, which although a minority shareholding , in practice it provides JLP with the power to influence what ultimately happens to BMR.

I have a small BMR shareholding, which I speculatively picked up after JLP invested in BMR and obtained adjust under a 30% stake. I post mainly on the JLP board and have previously set out the number of regulatory hurdles that JLP need to go through before they can eventually get the small scale licence fully under their own control. JLPs aim is
1. To secure the small scale licence without the large scale licence, which Galileo want to secure and
2. Ensure the small scale licence can be renewed for at least 10 years from this Autumn when the current small scale licence runs out.
The above is complicated by Galileo’s involvement. And I suspect this may be where the stumbling block is., and where regulatory delays are arising. Galileo needs a small scale mining licence for the Star Zinc project, and until that is secured along with the zinc ore deal with JLP, Galileo has no obvious means of near term funds for the exploration of Kis Hitu within the long term licence,. I would imagine such funding certainty would be a condition of the long term licence being transferred to Galileo. I hope from JLPs and BMRs perspective this is the case, and nothing more sinister is going on.

Isphahan, your points are well made and they are the reasons I am invested here. My big complaint about the company is the production figures provided, sometimes within an RNS but more often by Leon in interviews, often come without proper explanation or context. For example a 5000 PGM ozs figure for September was mentioned in an RNS in October last year I believe. A number of board contributors who follow the company could not work out what it was relating to. And I personally still have no certainty. It sounded far better than had been expected and the cynical might have thought it was a bit of a ramp. And to compound the problem if you email the company you get no reply. I just cannot understand why Leon in particular keeps shooting himself in the foot. He doesn't need to do it. Just have a look at the professional communications from companies like Jadestone Energy and Sylvania Platinum, two other companies I am invested in. A bit like chalk and cheese.

I couldn't agree more with TBTT about the lack of reported detail regarding Jubilee's operations. The soft marketing interviews do not impress me either. The only interview Leon has provided at which some hard questions have been asked were the Crux ones towards the end of last year. But at least Northam have provided some detail of the PGM prices and what the likely Windsor PGM basket split by volume is in their results at the end of last week. Asa result I believe I now have a far more accurate model to try and predict earnings for the PGM side of the business. Unless there is a large drop in palladium and rhodium price this month, and no significant operation difficulties, Jubilee's PGM earnings in Q1 2020 should be at least US$15m (£11m). However there is a big cautionary note. This figure will only convert into cash if the same level of PGM prices exist in about 3/4months time! Even so the number is impressive. Leon mentioned that PGM prices were strong on 31 December. Well even after some relatively small PGM prices falls last week, the PGM basket is still over $500 per ozs higher than on 31 December.
We all know that probably even with the positive earnings coming through from Inyoni on the chrome side, the chrome business as a whole will be producing negative earnings. And this might continue for a year or so. The unpredictable black swan event of the coronavirus has wiped out all hope of a relatively quick rebound in the chrome prices. But if the PGM prices remain at the current level, these will be insignificant in comparison to the PGM earnings. A big IF though.
At the moment we have no idea what the margins on the copper will be at Sable. No doubt we will have to wait until the 2nd half of 2020. The fact we have copper tailings at Sable (how much?) included in the Sable deal was a nice surprise. Maybe the half year results later this month will provide more information.

Jonah and Moneyhawk, from what I recall there are two electrowinning circuits already at the refinery to convert the concentrates into the final metals. These could be if required used interchangeably between the copper and zinc. It looks as though one is already being used for the copper production. At present it looks as though there are no current plans to use the other for the zinc, as only zinc concentrate production is being referred to. Don't know if they will need both of the electro winning circuits for copper once the target of 400 tonnes a month is reached, or are they planning to exceed this figure from Q3 onwards depending on 3rd party ore supply?

Northam's half year results came out on Friday, and as expected they were exceptionally good. The webcast presenting them is worth listening to. There is comment about the deficit in the palladium and rhodium markets and an expectation of prices remaining strong, as the prices seem to have been mainly driven by demand and supply issues, and not investor speculation. Paul Dunne commented that despite the virus in China, and reduction in car production, both metals' prices so far anyway had remained strong. He also commented that he couldn't see any significant switching from palladium to platinum within the next two years. Very reassuring and hopefully he is right and the very strong margins Jubilee is currently achieving in the PGM basket are retained, so as to more than offset the chrome and base metals, which are in the doldrums.
On Northam's website is a very useful results booklet, with a section on Elam. It shows the complete breakdown of the individual metals produced and sold in the 6 month period up to 31 December 2019. The PGM basket breakdown for Windsor PGMs can be calculated from these figures. In terms of volume on a 6E basis platinum, palladium and rhodium broadly account for 65%,16% and 8% of the PGM basket.

After my post below I just couldn't resist a further investment with the price just below 60p. Never thought I would see this price again. Quite possible price will go lower. If it does by any significant amount I will be investing more due to the substantial oil price protection hedge until the end of September when we all hope we will have seen the back of this virus.

Fantastic Capital Markets Day Presentation. All of the management team speakers came over as highly competent as expected. And the thought and attention to detail that came clearly through makes you realise why the majority of this team were so good in their Talisman and North Sea days executing the same mid life oil and gas field strategy. I am overweight in this share, but I was so impressed I am looking to invest further, and the current market conditions should enable me to get in at what I am sure will turn out to be a bargain price, if I am prepared to hold until 2022.
I would highly recommend any potential investor to read through the capital markets day presentation pack, and if you are really serious listen to it being presented over a 3 hour period. For me the time flew by.
The current protection Jadestone has in its oil price up to the end of September 2020 should be very reassuring to any investors during the current virus turbulence. The uplift in free cash as soon as Nam Du comes on stream at the end of 2021 on slide 25 is incredible even at an average $50 per barrel oil price over the next 2 years when there will be significant capital expenditure. The current cash level hardly reduces even with a low average of $50 a barrel, and the loan leverage in relation to the net cash position is also very low. But an average of $50 a barrel over the next two to three years is in my mind very conservative, especially as the current hedge position at Montara up to the end of September 2020 and the IM2020 regulations create a significant premium for each oil barrel in excess of the Brent Crude price during the first 9 months of this period. Of course there will be operational risks, but the competency of this team will ensure that they are minimised. So we have to my mind a relatively low risk investment over a 2 to 3 year period, which should be enhanced even more by accretive acquisitions and a small dividend of 2% to 3% a year as well. What is not to like?

As usual Director’s Talk is just a positive marketing tool. A tough question is never asked. I hope you are not correct in the rather pessimistic view of indefinite delay on the Kabwe tailings project TBTT. Anyway it would really help if an honest update on the tailings project could be released, but we might have to wait until the end of next month/early April to get further information, and by then the rumour mill will be in overdrive.
Another issue I would like some clarity on, and one I expect I will not get, is how long does the Windsor PGM project with Northan last? My best guess is to the middle of 2021. Any other views.
The current PGM earnings of $5million or more a month is very comforting. We certainly need the PGM price to remain strong for a few more months yet. If it does H1 will be highly profitable despite the difficulties in the chrome market, the probable delay of the tailings part of the Kabwe project, and the low base metals prices. But the premium price we are now receiving for the high quality copper being produced at the Sable refinery, and that the cobalt circuit is now in cold commissioning, is good news.

I have previously posted on the number of regulatory hurdles Jubilee still had to go through to ensure they ended up in possession of the small scale mining licence after exercising their option with BMR to remove any remaining historical issues associated with that company. There is also the small issue of the small scale licence which will need to be renewed this Autumn.
The other significant issue, which some board members have alluded to, is the complex and difficult issue of moving and processing highly toxic waste in an environmentally friendly way. Looking at the last RNS, my best guess is that this particular issue is turning out to be more time consuming and probably more expensive than expected, and the regulatory authorisation to proceed with the tailings mining has not yet been granted. Once it is, the other regulatory hurdles to secure the new long term small scale licence fully under Jubilee’s control can then be dealt with. I would imagine Jubilee would like all of the regulatory permitting issues to be dealt with altogether to remove the regulatory permitting risk from the project.Rather than getting into any conspiracy theories, this seems to be the most logical reason for the new focus on 3rd party material initially, as I am expecting some timetable delay for the tailings part of the project.

TBTT has indicated the SP disconnect with the financials of this company. I hope the company has given the house broker the forecasted special dividends assuming PGM basket prices remain strong for the next 18 months. If so the sooner they can indicate formally they are thinking along special dividend lines of the magnitude in the broker note, the sooner the share price will align more with the company’s financials.
At 31 December 2019 the company reported net current assets of $81m. That is close on 40% of its entire market cap. And money is flooding in. Off the top of my head, by the end of FY 2020 in just over 4 months time, maintenance of the current PGM basket could mean net current assets will be two thirds or more of the current market cap. Insane.

As others have said the SLP basket price is gross i.e. before any processing costs of the PGM concentrate and penalties for impurities in the concentrate. Based on a 6E PGM basis, and assuming revenue is defined in the same way for both companies, I have calculated the net average basket price received for SLP and Jubilee during the last 6 months of 2019 to be $1024 and $991 per oz respectively. I have assumed a £ to dollar rate of 1 to 1.3. This result looks reasonable as the rhodium content in the Sylvania basket is believed to be around 40% more. The difference in prices since the beginning of the year will have provided a far greater value advantage in the basket price for Sylvania due to the huge increase in rhodium prices in particular. Sylvania's 3rd quarter figs will be amazing if the current PGM prices, and particularly the rhodium price, hold up.
I couldn't agree more with TBTT's valuation of Sylvania's SP.

And the following entry into your browser will get through to an eve more interesting part of what I presume was the same Indabi Mining Conference address. " drc-to-benefit-from-rise-in-global-copper-demand-2020-02-05"

Paste and search the following in your browser "video-zero-emissions-transport-future-will-require-more-copper-platinum-2020-02-06" and find a fascinating Indabi Mining Conference 2020 address about the future demand for copper and platinum. Probably nothing new, but the speed at which change is happening regarding electric and hydrogen fuel cell vehicles interested me. Looks like Jubilee is moving in exactly the right direction.

Edzi,
The margins from processing the Kabwe tailings must have significantly contracted at the current metal prices, and Colin's "telescope" to see the huge Vanadium earnings add on he mentioned in a broadcast about 14 months ago when Vanadium prices were riding very high, needs to be turned around now as they have disappeared for the time being over the horizon! Do you remember the other stupid Colin comment from the same broadcast I believe, about the extra value in the tailings at DCM after the fine chrome being removed " being in the bank folks". Thank god those broadcasts with Colin involved have stopped now. They were so amateurish. But I digress. Copper prices are not great either and it will be interesting to see what Jubilee are earning on it, but unfortunately we will probably have to wait to much later in 2020 before finding out. With chrome in the doldrums thank goodness the PGMs are booming, and the Windsor and Inyoni PGM ramp ups are occurring at what appears to be exactly the right time. Leon has played a blinder on these two PGM projects, and provided the PGM prices can be sustained at least at their 31 December levels for a few months (they are of course significantly higher at the moment) the PGM earnings will more than carry the current metal price nasties in the rest of the business, and the additional debt that was taken on last year. Jubilee is not that geared at the present time, but that could easily change when the next big project comes on board. Let's hope Leon is right about the chrome prices recovering in the short term as it will be really happy times here then.

In my opinion I believe the following is going on at Kabwe.
1. There is a small matter of the Kabwe small scale licence still to be renewed for the Autumn, which of course covers the mining of the Kabwe tailings. Need not over commit re tailings processing until resolved and keep some pressure on the government authorities desire for jobs and the environmental lead clean up in the tailings. But this is all tangled up with what Galileo wants to do. First they need the small scale mining licence at Star Zinc and this project then needs to fund the exploration they want to do within the large scale Kabwe licence area. This can only be achieved if Galileo gets approval to carve out the rights to the large scale licence from BMR. Jubilee wants to exercise their option with BMR to secure the small scale licence under their own control, but only after the large scale licence has been carved out by Galileo. Lots of regulatory hurdles need to be cleared.
2. The large drops in the zinc. lead and vanadium prices must have lead to a rethink on the priorities for the Kabwe multi metal project. They also have an expensive refinery to finance, which needs to earn money as quickly as possible, and the copper line was the quickest to get into operation to achieve this.
3. The copper/cobalt project may have been opportunistic but politically could be advantageous. A major condition of approval for the refinery purchase was to support local 3rd party ore producers. This box has immediately been ticked. But it would not surprise me if the next large project is a copper/cobalt project in Zambia and Jubilee needs to prove its processing capabilities as quickly as possible.
So from my viewpoint the slight change in priorities makes complete commercial sense. But it would be nice to have it properly explained. But heck this is Jubilee!

Thanks for your honesty Kalan. Certainly over relatively short periods of time, totally agree with your emotion/ logic viewpoint. To a large extent this can be applied to most if not all smaller company stocks. Just look at what happened first thing this morning with SLP. Excellent results especially when covering the Xmas period, no surprise about the host mine situation and the massive increase in PGM prices in January still to come through into the results. The SP fall was illogical and but pretty well expected!

There is a significant delayed cash flow from the PGM production. Final pricing is not determined until 4 months after the month of production and cash is paid shortly after that is my understanding. Shortly after the end of January Jubilee will receive the revenue for the September production of PGMs, the start of the production from Windsor. The huge ramp up in production at Windsor and now at Inyoni, is requiring a large amount of working capital and to my mind is a significant contributory for the placing last November. However the timing of receiving the cash from Windsor though could not be better as it will benefit from the huge increase in PGM prices this month.

Jubilee as usual has produced an RNS with more questions than answers. Why the hell they cannot be more straightforward is beyond me.
Anyway for what it is worth, I believe that December was a very poor PGM production month at both Inyoni and Windsor for the following reasons
1. The winding down to Xmas and the Xmas break itself would knock about a third off a months production
2. Although not mentioned there were probably issues with power outages.
3 . A new improved feed system was being installed at Inyoni which must have disrupted production unless all done in the Xmas break
4. A bottleneck issue was resolved for the huge increased feed rate at Windsor PGMs which presumably disrupted production.
With the operational issues for the higher level feed rates now resolved, we can probably look forward to a bumper half year of PGM earnings provided there s not a collapse in PGM basket prices and there are no significant power outages. Maintenance of the current PGM prices could lead to PGM earnings of more than £16m over the next six months, double that reported for the first half.

Sorry meant Woodford not Woodward.