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In effect a repeat of the interview on pro active last week. The short term issue is that the actual financial results for FY 2022 will not be good due to the delay at Roan and probably a longer effective closure of the PGM circuit during the first half than expected, together with still significant JV reliance and escalating transport costs. The PGM prices have held up well despite the Chinese lockdowns probably as a result of the Russian situation. It will not be until the first half of the FY 2023 that the financials will start to reflect the true position but how much will the market look forward? The other worrying aspect is that Jubilee has still not set out the capital cost of the Northern copper strategy in Zambia , the final deal for the refinery with Mopani or the exact means of funding it. They were far from clear about the full cost of the Inyoni build and it’s impact either. They are now going to have to be much more open and hopefully the change at the top will result in that.
Potential yes! But as always there is no clear guideline on just how much the whole Northern Refinery strategy in Zambia and the expansion to the Eastern Limb is going to cost and how the very large capital commitment is going to be met and over what timescale. At a time of shrinking operating margins due to rampant inflation of costs , and certainly short term concerns about commodity pr ices as a world wide recession potentially looms, it is of no surprise to me that the share price cannot move forward. I was not impressed either with the sudden treatment of the chrome as a by product to try and cover up the large increase in the PGM costs of production in the current financial year.
We have the following potential benefits contributing to post tax profit increases next year
(a) no repeat of the £17m write off, although the size of the Tjate asset in the balance sheet is a concern unless a deal comes along
(b) a significant increase in chrome revenues which should translate into additional post tax earnings
(c) anticipated significantly lower production costs for the targeted 50K ozs of PGMs
(d) commencement of the Roan copper although that will only be significant in Q2 Cy 2022
(e) possibly better PGM mix with a higher rhodium content.
PGM prices look as though they are going to be relatively weak until mid 2022 with the continuing chip shortage for car manufacturers. I am expecting a large drop in PGM revenues compared to the 2021 FY which will result in a sharp contraction in the post tax profit contribution from this source. I am hoping that post tax profits n FY 2022 will be similar to this years but I fear principally as a result of a much lower amortisation figure in FY2022.
As has been already stated 2022/23 (and then 2023/4 with cobalt potential ) are building up to be stellar financial years as the copper production really gets off the ground, and hopefully the chip shortage has been resolved for the car production. But steel yourselves for what will appear to be poor half year financial results in January 2022, as Inyoni was closed for a large part part of Q3 CY 2021.
One potential negative in the accounts is a law suit pending with Riverfort .We also have high inflationary pressures on costs as well.
The amazing construction and technical work that has been done last year and now into the new financial year has set up the stellar financial performances realistically expected for FY 2023 and FY 2024.
See the RNS of 15 Sept. part of the placing proceeds are being used to expand the cobalt circuit at Sable in order to test out the process facility for the proposed new cobalt refinery as part of Northern refinery developments. This implies some cobalt will be produced but probably not that much in 2022.
The placing has not discounted the need to raise additional loan funds IMHO. There is a large amount of investment required to bring in all of the parts needed to execute the three copper projects. Unfortunately this has not all been clearly set out. It is quite possible that nearly all the profits made in South Arica will be retained in South Africa to invest in a new chrome/PGM PGM facility in the Eastern Limb. That would leave just this fund raise, and the gradually increasing copper profits from Roan and 3rd parties to fund the large remaining capital spend needed to get the remaining two copper projects up and running with in house refining.
Yes it appears so, as it was dated yesterday. A lot of the interview covered why in due course Jubilee should be rated at least as highly as miners, if not more highly. The points made are interesting but have been made before, and to prove that reprocessing of mine wastes will become an industry in its own right will take some time.
Dorfan, the info re 50k PGM ozs is in the penultimate paragraph of the 4 June RNS. Inyoni was closed for an unknown period in June to integrate the new chrome ore processing facility to the PGM processing facility in the final commissioning stage.
If I recall shareholders were promised an update on the elephant projects by the end of 2nd quarter. Would be nice to know the phasing, projected costs and cobalt expectations in more detail. The new copper refinery options for the expanding production should be due soon as well. Fingers crossed.
Jubilee must have to start in earnest in processing and cleaning up the Kabwe tailings dumps. They must have had to commit to the Zambian government to get their small mining licence renewed last Autumn. In a Criux interview Leon indicated a budget of $11 was needed to complete the zinc processing and modern tailings requirement. The zinc part is well underway, about 40 % complete last year at the time of the Crux interview. The last target date I heard for commencing the commissioning of the zinc processing was by the end of Q3 2021.
Certainly. A deal on or with a large mothballed refinery(Eurasia II believe have one in Kitwe area)is surely in the wings. I was surprised Jubilee was prepared to give up long term some refining capacity at Sable to a 3rd party offtake when it needed it itself , unless a new refinery deal is in the wings.
Braemore has agreed to advance the equivalent of US$ 5.0 million funding (“Initial Investment”) to Tanganika’s owners Horizon Corporation Limited (“Horizon”) which investment will be applied in part for the continued project development of a second copper tailings dam of similar size, held by Horizon.
This is from the RNS last June when we first heard about Elephant 1. The $5m was a loan.
Apparently the transaction came about as a result of an unsolicited approach from Jubilee. If the option agreement proceeds into JV transactions ( and Jubilee will hold most of the Aces in the negotiations!) Caerus could proceed far earlier than they had expected to monetise some known small high grade open pit resources as well, providing some high grade ROM ore into the processing facilities Jubilee would have to build. Bit blue sky at the moment and three years away?, but it will be interesting to see how all of this turns out. I can't imagine Jubilee are contemplating going into Cyprus just to process the dump and potential small scale ROM resources Caerus own.