Member Info for Jammer1

The "new" 80K chrome plant is an existing mothballed Samancor owned plant across the road at Inyoni. Jubilee are now managing it and bringing it back into production with improvements to the chrome processing circuit. The 3 year contract with the Samancor subsidiary which owns the plant is on a toll basis. The chrome concentrate produced will be Samancor's, Jubilee will be paid for the processing and making a margin from it, as well as being paid an additional amount over 3 years to cover their capital costs incurred improving the chrome processing circuit and bringing the plant out of its current mothballed status. The key statistics are the 3 year contract guarantees a minimum of 40000 tonnes of ROM ore per month and Jubilee are able to retain the tailings and take them across the road to extract the PGMs for their own benefit. This contract could increase to 80K tonnes a month and be extended for a longer period, but that will largely depend on Samancor. The additional PGM feed from the "new" plant and the new Windsor 8 plant, supported Jubilee's decision to extend the existing PGM processing facility at Inyoni. This was all set out in an RNS last year.
The other potential sources of PGM feed mentioned earlier are intriguing.

Gray,
Leon set out the three phases for project Roan in the recent webcast about 11.5 minutes in. Each phase produces a higher and higher grade of copper concentrate, and the third phase is expected to be implemented at end July 2021. So could be in full production on Roan running at 10K tonnes p.a. by end 3rdQ this year.

The regulatory route to monetising the Star Zinc project has clearly not been as simple and straightforward as was indicted to shareholders. Without Jubilees backing and support of Galileo I would have been more concerned. Looking at things from a Zambian regulatory perspective I am certain that in some way a Zambian National has to be involved and adequate financing and operational readiness to exploit the asset has also to be in place these days. Jubilee ran into a huge issue when they first got involved with BMR as the mining licence needed to exploit the Kabwe tailings was cancelled and this led on to BMR eventûaly being delisted. It was only Jubilees intervention with the Zambian authorities that saved the day. A very good silent partner for Galileo to have.

Ella you will need to look at p98 Note 27.2 in Jubilee Metals latest report and accounts. This confirms they now own Enviro Mining Limited and its subsidiaries. It is now a matter of finding the best way of carving out the residual rights which Galileo had paid BMR for, which reside within these Enviro companies, in a way that the Zambian authorities can approve.

Ella,
To cut a long story short BMR are now a public company without a listing, so their shares are illiquid. Jubilee Metals in effect pull all the strings at BMR, they own nearly 30% of their shares and Colin Bird is chairman of Galileo and of BMR and of Jubilee Metals, so he has a lot of conversations with himself ( and the Jubilee Board). BMR is in effect a shell company now, with one asset, a royalty of 11.5% of the profits from the Kabwe tailings project now completely owned by Jubilee Metals. Jubilee Metals also now own the Enviro companies in which the legal title to Star Zinc as well as the large scale Kabwe mining licence resides, which covers the Kis hitu prospect. My understanding is Jubilee completely recognise the agreements that Galileo had with BMR and are working with them to try and sort out the titles and mining licences for Star Zinc and Ka****u in a way which will satisfy the Zambian regulatory authorities.

Market sentiment has changed and if one just looks over the last week, PGM prices are falling. After the huge increase in early January the PGM prices were bound to fall a bit, especially rhodium which went through the roof to an unsustainable level. But comparing the PGM net basket price using today's Johnson Matthey prices at 9am London time and the calculation method set out in the broker note on 8th July 2020 from W H Ireland, the net PGM basket price to Jubilee is 13% HIGHER than what it was on 31 December 2020. The chrome price is also 10 to 15% HIGHER than at 31 December 2020. The copper price is also slightly HIGHER than what it was on 31 December 2020. Yes there was some dilution, but that was going to happen anyway as the "debt" owners were always going to use the option to clear the debts through an issue of shares at the low locked in price. So what has changed other than market sentiment? If anything Jubilee is in a better place as of today than it was on 31 December 2020.

Where there are asterisks just put words in *************interviews followed by .com

https://www.***************************/jubilee-metals-group-extraordinary-growth-just-the-foundations-interview/412956316?utm_source=mailpoet&utm_medium=email&utm_campaign=new-interviews-available_1

Interesting picture of the "construction site" at Inyoni for the expansion of operations there to be delivered early in 2nd Q. 2nd it

Westlad, Colin always underplays the regulatory requirements! The Star Zinc project still needs a small scale mining licence and to a large extent an official offtake agreement with Jubilee Metals , which is probably a done deal behind the scenes. The good news on the Star Zinc project is Jubilee has confirmed about 40 to 45% of their zinc processing project is completed and the plan is to recommence the processing build in early Q2 with completion during Q3. I cannot see any exploration work being undertaken on Kash itu this year. The funds available will be prioritised for the copper project and any needed to get the Star Zinc mining underway. Galileo have not yet officially got their hands on the large scale mining licence at Kabwe needed to proceed with the Kash itu exploration, and I would suggest the Star Zinc project will need to be monetised before any work starts at Kash itu. I say officially as at the moment Jubilee actually hold the large scale Kabwe mining licence and although Galileo has bought the rights to it, it cannot be officially transferred to them without the Zambian authorities approval. I understand Jubilee is assisting Galileo to try and get this particular issue resolved.

Well TBTT if you really believe JLPs much vaunted processing skills is a myth, why are the worlds largest chrome ore miner Samancor placing their faith in them for the next 3 years to process 100,000 tonnes of ROM chrome ore? Why would Northam allow JLP to refurbish and tweek the design of the processing plant they are using in the JV? You seem to have no interest in seeing any positives at all in JLP and are beginning to come up with statements that make no logical sense, to validate your position. . End of discussion.

TBTT, thanks for your post setting out your view of the risks for JLP in particular.
Certainly agree with point 1. Until say 12 months ago Jubilee was quite a small company, which had just become profitable. It is having to grow up rapidly as its metal processing skills become far more recognised. CB is not the right person to be chairman now, and yes its governance needs to be strengthened. The sale of CBs shares to my mind is the beginning of his "retirement" quite possibly at the next AGM in November/December 2021. Financial reporting has recently improved now a full time CFO has been appointed.
2. The points have been well made re the political and sovereign risk in Zambia. But spreading geographical risk away from South Africa into different metals is a good thing isn't it? Yes my preference would have been to a jurisdiction like Australia. But that might still be coming in the not too distant future! I believe you are completely wrong about the Kabwe project. The COVID closure of the borders last year put the development of the zinc processing circuit on hold. It has been 40% to 45% completed and work should be resuming there at the end of Q1 2021. The small scale licence has just been renewed for 10 years so the authorities cannot be that unhappy .There has already been investment in a new facility at the Kabwe tailings site to capture water running off the tailings containing heavy metals. They are being neutralised and reused at the Sable refinery.
3. Your comments about execution apply for projects up to about 2016. They had problems at DCM which were none of their making. Since the Hernic project was won, the execution has been very good. Their financial position would not be transforming like it is if it hadn’t been, would it? Being a metals processing company and NOT a mining company, it owns relatively small amounts of tailings, and has to JV with mining companies or tailings owners, something it has very successfully done. JVs with Samancor and Northam don't come easily, and they must be very good at processing chrome and PGMs. Over the last 2 years they have also become owners of more assets. Originally the Hernic agreement was a JV on poor terms for JLP, But now the entire operation at the renamed Inyoni site is owned by JLP, so they can completely control it, and from what was already a good efficient processing operation has now become an excellent one, with record production over the last two months of 2020. As far as I am concerned the copper processing risk in Zambia is a relatively small one. They have successfully run a proof of concept at the Sable refinery since the start of 2020, converting economically with very good margins low grade tailings into A grade copper cathode, much to Glencore’s amazement who didn’t expect the tailings they left behind to be monetised.
Blue chip institutional investors are now beginning to back JLP. They cannot see the level of risk that you appear to.

Visitor a very interesting analysis of THS v JLP. Whether JLPs current valuation is too high really depends on how much as an investor one believes in the copper strategy. If it works out as has been indicated, and as an investor you obviously need to make your own judgement on that, within 2 to 3 years JLP could easily be generating post tax profits and cash flow greater than THS. Forgive me if I have got this wrong but you did not mention that around 25% of THS post tax profits are not available for the normal shareholders! I certainly agree with you that Tharisa should at this stage in JLPs development have a much higher market capitalisation, but I believe that is more a reflection on THS being significantly undervalued at present.
I would also agree I never fail to discount anything Coin says about project timelines. But Leon Coetzer is a different person. Anything he has promised has to a large extent been delivered as expected and he has been in effect running the show at JLP for at least the last two years. How long Colin will remain as chairman, he is 77 years old, is probably not much longer.
In my opinion you are tending to judge Jubilee very much in the past, and not where they are positioned today. The new blue chip institutional fund investors, with Mark Slater one of the finest UK fund managers recently investing in the company, must believe in the copper strategy, and also be aware of the past difficulties and issues you have highlighted. To a large extent the copper strategy has been de- risked already as a significant proof of concept has been running at JLPs Sable refinery since the beginning of 2020. The purchase of the Sable refinery will in my opinion be shown as a masterstroke, as the copper strategy starts to fulfil its potential. Glencore had no idea what Jubilee's plans were on the copper front, or of their processing capability, and I am sure it will eventually be shown JLP acquired this asset at a bargain price. Yes JLP had to fund the purchase with expensive convertible debt, but 2 years ago JLP was not in a position to be able to acquire funding other than at a high price. It is on the back of the proof of concept test that JLP has now signed up JVs with 3 very large copper tailings owners with probably another large one about to be announced.The copper “life of mine” in Zambia is already 15 to 20 years as it will take this long to process through nearly 300 million tonnes of copper and cobalt tailings dumps.
The points you have made are of course correct BUT in terms of the liabilities sitting on the balance sheet they are to a large extent as a result of the immaturity of JLP as a company even up to just 12 months ago. They were in a weak financial position which resulted in dilution and liabilities to help fund the developments in Zambia and the large investment in South Africa over the last 4 years. The South African assets have now matured and are providing the significant cash flow needed.

With what appears to be a persistent seller, it probably indicates the importance of the new blue chip investor in the background to mop up the sales and support the share price around the 13 p level. As you say it will probably soon all come out in the wash with the holdings announcement(s) giving more idea what has been going on.

We might not get the update for 2 to 3 months. If I was the house broker, I would ideally want a good steer on the copper numbers from Project Elephant , which we should be getting in Q2, hopefully in April. They could perhaps use those to get a better idea of the sort of numbers that Project Elephant 2, and possibly to be shortly announced Project Elephant 3, could achieve. Ideally they would want a steer on any additional refining capacity in the pipeline and an indication of terms. Finally they would need confidence that Project Roan is delivering as expected if they are going to reduce significantly the risk weighted adjustment for the future copper earnings.

The message yesterday was the new II was there for two reasons. One to support the share price around the 13p level as there are potentially blocks of shares becoming available, either Rom the convertible loan holders or there is a large willing seller for whatever reason they have. I doubt at this stage it is the directors wanting to start cashing in on their share options as that would send a poor signal to the market. Second it seemed clear to me the new II wants to support Jubilee in its new phase of expansion probably into Australia maybe late in the second half of this year once it is clear the copper strategy is very much on course.

Thank you Billyboy for an excellent summary of the Webcast today and for publishing the link. The very good relationship between Leon and Colin was clear to see. It was interesting that Leon was quite protective of Colin, especially due to the crap coming from the huge hypocrite TW this week. Colin knows his time is up and it is now a matter of securing his succession in the best possible way for Jubilee. During the webcast it almost almost felt as though Leon was the chairman at times!

Jonah, I do recall Leon indicating in an online Q&A session, after the Mineprophets presentation I believe, that it was the techniques used in developing the ultra fine chrome facility that had been used in the processing of the low grade copper tailings at Sable refinery, and it was a major factor in being able to do this economically.

Quite likely you are right Kaiser_B.

Some good contributors have recently posted some sources for chrome ore pricing on the Tharisa board quite recently. I use these to check out what they were saying about chrome prices.

Shiner, I am only going on what I have seen in RNSs. A few months ago Leon was quite bullish about the chrome price, so the Board may have decided to take the chrome price risk for their facilities outside of Windsor. They may well be proved right as the chrome price has started to tick up nicely over the last couple of weeks. We do not know the exact contract details for the 3rd party chrome ore suppliers. My best guess is that at Windsor the offtake agreement(s) provides a chrome price to the 3rd party within the boundaries of the hedging arrangement less a tolling charge. This then ensures jubilee's margin is largely linked to how efficient their processing is. It also protects the 3rd party miner from ultra low chrome prices. It appears there are standard offtake arrangements at Windsor 8 for the 3rd parties, and of course all chrome concentrate produced at Inyoni is from Jubilee's own resources.
In a recent presentation at the Master Investor show Leon indicated a target margin of around $20 per tonne of chrome concentrate I believe. With the tick up in chrome prices and Windsor 8 and possibly the ultra fine chrome facility now running up to capacity, I am hopeful of a very significant improvement in the chrome earnings both from volume and margin in H2 of the 2021 financial year.