Member Info for Jammer1

I don't know for certain if this is the cause of some funds selling holdings of Sylvania, but after the Woodward fiasco where his very poorly managed funds suffered a liquidity crisis due to the inability to sell holdings of illiquid or illiquid small company stocks, there is now some nervousness about small company holdings within funds. For example there is some nervousness about the Miton UK smaller company fund, especially after its poor performance over the last 24 months. It has a reasonable holding in Jubilee Metals and this holding is a potential overhang on that particular stock, particularly as its fund value is declining quite quickly due to some poor stock picks and a cashing in of units by investors.

Kaiser B, Leon stated in the Crux interview (just less than 30 mins in) that the fine chrome process is transportable into other metals and was being installed in Zambia ( presumably at Kabwe) to classify and recover fine copper particles. In the RNS of 17 September 2019, it was stated that physical separation equipment was also being installed in the copper recovery process so that cobalt could be recovered from the copper production. Looks like they have installed and begun testing quite transformative copper processing methods at Kabwe during the 4th quarter 2019, not only to produce revenue but to prove their credentials to the Zambian government and other big copper players. Be interesting what is said in the next Kabwe update on this particular topic.

One big unknown Billyboy is how the profit share at Windsor PGM works. I assume your calculations have taken into account the costs of all the raw materials we are supplying and transporting to Northam? Have you also taken into account the raw material costs at Inyoni after the $21m payment is complete? I also assume your figures are at the operational earnings level and not at the group level after depreciation, amortisation, finance costs etc are deducted? Who knows you may be right but until I see the operational earnings figs for H1 2020 accounting year I haven’t got much of a clue. Nor does it seem does Shard as the promised revised broker note is still to be seen. The other big assumption you have made is that Kabwe earnings will completely replace the Windsor PGM ones when they appear to be finished at the end of 2020.

Fellowship, even if you are right about the motives of a section of BMR Watch, which I doubt you are, you seem to be over concerned about a group of BMR shareholders that have limited power to achieve anything at BMR particularly as Jubilee holds 30% of the BMR shares. Jubilee in effect control the limited strategic options open to Borelli and the BMR Group, and probably will decide when he should go, unless he decides to jump ship himself. It is most likely this will happen once Jubilee is in a position to secure the Kabwe small scale licence under their own control, and the Zambian authorities agree the transfer from BMR . I just cannot see how you conclude their apparent thwarted actions to try and remove Borrelli then leads them on to want to short Jubilee. They know that it is probably only Jubilee that may help them get something positive out of the mess they have found themselves in at BMR., so why would they want to hurt themselves?

Fellowship where is your evidence for the shorting by BMR Watch?

How noticeable it is that as soon as there is a dip in share price this board starts to see attacks on the company's management. Other than when there is institutional activity, the share price is determined by private investors. And many PIs, even if they believe in the long term prospects of the company, are traders with part or all of their holdings, particularly after a significant spike in the share price.. Kalan is a good example of this and he has been quite open about it and appears to have largely called the shorter term share price movements correctly. When there is relatively low transaction volume, traders will inevitably move the share price quite excessively one way or the other, as it does not take a lot of buying or selling to move the share price one way or the other. Whilst I also accept sentiment comes into play in the short term as well, and a placing generally produces negative sentiment, it is far from the whole story for the correction we have seen over the last few weeks.For me I am delighted to see the lower share price as I can top up at a lower price as I build my holding taking an 18 month to 2 year view on the prospects of the company.

Another excellent tailings metals recovery business paying dividends is CAML. They have over the last couple of years diversified into lead and zinc recovery to supplement their copper metals project.

To be fair to Jubilee they have clearly indicted they are at this stage going for quick growth and all profits will be reinvested in the business. The platform put in place over the last couple of years to support rapid growth has been quite remarkable. The PGM price surge has come just at the right time, and if maintained Jubilee should have considerable cash flow coming in during 2020 to support the next phase of growth. Hopefully the chrome price will recover as well.

Yes, an interesting comparison. Sylvania are along similar lines.But so far I don’t think DRD has so far started to diversify by metal or geography and are vulnerable to both the political situation in South Africa and gold price. Will there be tensions re speed of development with their new significant shareholding partner?

Thanks for the detailed research MT. Much appreciated.

At the end of each month’s PGM production Jubilee estimate the revenue that it will produce. But the final revenue amount is not determined until 4 months later, and it is based on the average PGM basket price in the month running up to that date. For example the final revenue figure for March 2019 production was determined by the average PGM basket price during the month of July, and April’s PGM production during the month of August etc. There has been a significant increase in the PGM basket price since the end of June, none of which is likely to have been taken into account when calculating the reported revenue for the last financial year. I have calculated an extra £1m or more could be be added to the total revenue for the first half of the 19/20 financial year, such has the increase in the basket price been since the end of June. And it will all fall straight down into the pre tax profit line. You only need to look at Sylvania Platinum’s Figures in the appendix of their corporate presentation for the quarter up to 30 September, to appreciate the impact on profitability such a bonus can have.

Looking at Colin's prominent position in photograph of attendees, the names of attendees and his position in the meeting room, it looks like Colin has set up the meeting. Hence the prominence of Jubilee in the article. It probably shows just how far Jubilee have come over the last 20 months with their Zambian government relationship since the lost licence debacle at Kabwe in the early part of last year. It has been more than hinted by Leo in the Crux interviews that Jubilee has been reviewing the tailings owned by the Zambian government, and it would be no surprise if they have highlighted the gold potential in some of them in the first place.
I agree with you J58 about the timing of the commencement of the copper cathode production, and the last corporate presentation showed production commencing in October with a target of 250 tonnes by this year end, before ramping up in the first half of 2020.

3rdQ could not have gone much better. Two significant pieces of work completed to budget and close to on time with as little disruption as possible to production. Benefits to start coming through with 4thQ, where company is ideally positioned for a bumper quarter to hit the forecast bbls/day target for the year. Free cash flow should be terrific aided by encouraging reduction in OPEX costs per barrel, with more to come.

TotalTrader, In the strategic report section under Licensing and Risk on p13 of BMR's annual report up to 31 December 2018, it states the small scale licence has an expiry date by October 2020. It says nothing about the large scale licence so perhaps I have got the expiry date for that licence wrong. But the small scale licence is the critical one for the Kabwe tailings project.
It is possible this date has already been amended, but I have seen nothing to confirm so.

TotalTrader, the small scale licence which enables the recovery of metals from the Kabwe tailings is held by Enviro Processing Ltd, a Zambian registered company (EPL). Jubilee holds an option, at its sole election, to acquire 100% of the issued shares of Enviro Mining Limited (“EML”), a subsidiary of BMR and the company that owns EPL.
The large scale licence is also currently held by EPL. Jubilee has no interest in this licence and would want to see it carved out before exercising their option to acquire 100% of EML and its subsidiary EPL.
Galileo want to acquire the large scale mining licence and have already paid BMR for the option to obtain it and the rights to the Kash* tu prospect. This is referred to as the Kabwe Residual Rights Option. But finalising this option is subject to the Zambian authorities approval.
I am sure Jubilee will elect to proceed with the purchase of EML once the Kabwe Residual Rights transaction has been approved. This would also need to be approved by the Zambian authorities. Once approved BMR will have no further interests in Zambia and Jubilee will have total control of the tailings project.
I am not sure where I saw that the large and small scale licence renewals were due in the Autumn of 2020, but I will let you know as soon as I can.

Never mind the jiggery pokery of the £5m, what's more important is when and if this option is going to be used. As far as I understand things everything links in to the small scale and large scale licences, both of which need to be renewed in the Autumn of 2020. Jubilee do not want the large scale licence and I suspect some liabilities which come with it, but Galileo does because of the Kash*itu prospect. So the option will probably not be used until Galileo have secured it. All subject to the Zambian mining authorities approval of course. So please if anyone is going to the AGM, please ask for some clarification on the whole Kabwe licences issue, and in particular their renewal next Autumn.

Kalan, I thought you were basically a long term investor, but you seem to be going way over the top about what should be a short term dip in the share price. After the recent incredible run the share price was due a breather anyway.

Congratulations on your short term share price calls recently. Dipping in and out of the market can be a dangerous game though, but I am sure you are very aware of that. But for someone who normally submits balanced views you seem to be letting your emotions get the better of you.

My time horizon is to look about 18 months ahead, and as far as I can see if there are no operational or political calamities or a very large fall in the PGM basket prices, most things look rosy. The recent deals should produce a significant cash flow surge starting particularly in about 4 to 5 months time. Currently the chrome operations are delivering next to no earnings, so Jubilee needs the PGM operations to really deliver. Although the PGM operations are going well and both will be ramped up quickly I expect, the cash flow will not be immediate as we don’t get paid for the PGMs until about 4.5 months after they are produced. Currently the existing DCM and Windsor chrome operations are delivering next to nothing in earnings due to the very low chrome price. So for incoming cash flow Jubilee will be relying over the next few months on their PGM operations, plus the coarse chrome earnings now about to start at Inyoni which will deliver quick cash flow. But because of the cash flow delay from PGM operations, and the extra working capital needed to ramp the PGM operations up further, Jubilee was potentially facing a cash flow squeeze in the first quarter of 2020, unless it slowed down some of its developments. The placing which I welcomed and as far as I was concerned was not done at a bad price either, has provided the contingency needed ( to cover rolling blackouts for example) to keep all of the projects developing as fast as possible, and deliver the “trains to the station at the same time.”

The company will be very well positioned on both of PGM and chrome operations in the second quarter next year, especially if the PGM basket price can be maintained and the chrome price improvement occurs as the company is expecting. And yes in this scenario we could see a massive surge in earnings at that time.

Staycalm, thanks for the info from Shard. Very reassuring the placing shares will be in sticky hands! Did you ask Shard about producing a new broker note with a share price forecast after all the dramatic positive events since their note early this year?

Sumoskier, although it was not entirely clear, Leon was solely referring to the coarse chrome processing at Inyoni. Until the recent Inyoni chrome transaction, the coarse chrome was being produced by Jubilee, and all of the processing costs were being paid by Jubilee, yet Jubilee received none of the coarse chrome revenue. After the chrome transaction, for no additional processing cost the revenues for the 9000 to 10000 tonnes of chrome concentrate produced per month will now come to Jubilee. There will actually be some other costs like delivery of the raw materials to the plant, and in particular an allowance for the cost of the chrome ore material Jubilee has purchased through the transaction, but even allowing for these additional costs the coarse chrome earnings should increase by around $750,000 a month even at the current low chrome prices, assuming current volumes and efficiencies are maintained. And with no CAPEX or other development costs, this amount will fall straight through to the operational profit bottom line. However, as Jubilee is now in complete control at Inyoni, there will be further chrome earnings upside, as the intention is to take the processing rate from its current average of about 42k tonnes a month up to 50K tonnes a month, increasing the coarse chrome concentrate output by an equivalent amount. And on top of that, but after further CAPEX in a fine chrome circuit, there will be further potential upside in the overall chrome earnings at Inyoni.

Even with chrome prices at very low levels, the return on the $16m investment should be excellent by just taking into account the potential chrome earnings at Inyoni over the next 3 to 4 years. And there may also be further upside if there is extractable chrome in the 1m tonnes of tailings near to the Windsor plant. Just think what would happen if chrome prices increased by just $20 to $30 a tonne of concentrate. If that happens this deal will be seen to be unbelievably good for Jubilee.

I am pleased the cash funding hole that was becoming clearer has now been plugged. At least the placing does not appear to have come along with additional warrants, and hopefully will put a new floor under the share price in the short term until the rapidly improving operational earnings come clear in the first quarter of 2020.

Jubilee are certainly backing an improving chrome price in the near time. Hope they are right. The fine chrome build appears to have already started at Windsor as in the report and accounts it states Jubilee is implementing a recapitalisation programme to expand and upgrade process efficiencies, including Jubilee's fine chrome process targetting completion in Q1 2020. They might need this facility to help keep the local third party chrome ore suppliers solvent, by offering little if any additional cost of processing, enhancing their chrome recoveries by around 20% and in exchange keeping their tailings for Windsor PGM. I also presume the latest 1m tonnes purchased in the Inyoni deal will be going through the fine chrome processing.

The operational earnings figure is much lower than I expected but again no explanations. Maybe some clues would come from a detailed operational update, which is now well overdue. Can we hope for one next week? My best guess is we might just about have positive operational earnings from both the DCM chrome and Windsor chrome operations at the moment, and in the 3rd quarter 2019 their was next to no positive earnings from Windsor PGMs as the presumed positive earnings in September were offset by the probable negative earnings during commissioning and ramp up through July and August. But we should not have to guess? The over 5000 PGMs ozs figure looks remarkable, but what does it include? Is that all for the joint venture, or is a significant part of it from the tailings already at Eland and owned by Northam? Come on Jubilee turn the corner please and stop offering what look like great tit bits without any explanation.

0.06 pence is 0.06 pence,NOT 6 pence!

JLPpositive, DCM was loss making both in the first half of the 2019 accounting year and in the second half, when it had been hoped the fine chrome project would have contributed positively. It didn’t, as the ramp up took at least 3 months longer than expected and chrome prices dived. The fine chrome project had negative earnings and on top of that there would have been a depreciation cost for the newly built fine chrome plant and financing costs for the extra loan taken to finance its build. The first time the operational earnings turned positive was for the month of June.As far as a project profit is concerned, it will depend on when Jubilee determine the fine chrome operation was commercialised. If they choose the end of May, and capitalise all the costs and earnings losses for January to end May, then maybe DCM will contribute something positive to the profit line. Personally I am assuming the fine chrome project would have been deemed to be commercial after the first quarter when the ramp up started to occur.
In the first six months of the 2019 calendar year, we will of course have positive earnings from Windsor chrome, and a profitable contribution from that operation after depreciation of plant and finance costs. For simplicity and until I see the annual results, I have assumed the loss from DCM fine chrome is offset by the profit from Windsor chrome. Of course the good news is that the increasing output at DCM fine chrome for July and August, as shown in the recent corporate presentation, should equate to increasing positive earnings from the fine chrome project since the new financial year started on 1 July, which hopefully are greater than the depreciation and finance costs so the fine chrome project is now beginning to contribute to the bottom line profitability.