George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
BMR posted their 2019 accounts up to 31 December 2019 on 23 December 2020. For me the interesting aspect was a more detailed explanation by the new chairman (Colin Bird of course) of what the Kabwe Project actually consisted of and confirmation that the BMR royalty had now reduced to 11%. The Kabwe project is being implemented in 3 phases
Phase 1, the upgrading and commissioning of the copper refining circuit with a targeted capacity of 3,000 tonnes of refined copper per annum ( from local suppliers of copper rich material);
Phase 2, the implementation of both the zinc and vanadium refinery circuit with an initial targeted capacity of 8,000 tonnes per annum of zinc contained in a high grade zinc concentrate suitable for the market and 1,500 tonnes per annum of vanadium pentoxide (utilising the Kabwe tailings and local zinc rich material); and
Phase 3, the implementation of the lead refining circuit with an initial targeted capacity of 11,000 tonnes per annum of lead contained in a high-grade concentrate.
No time scales given, that is up to Jubilee to state, and hopefully we will hear more in January's operational update. But this is the first time I have seen that future from copper and zinc from local 3rd party miners is included and will contribute to the BMR royalty. It is very likely that the copper earnings for the Kabwe project have already started.
Northern, I think your earnings figure is on the low side. Personally I am expecting at least £35m ( a minimum of £20m in October to December) and that is being conservative about anything that comes from the copper side and allowing for the Xmas break. In particular the PGM basket price should be averaging over $300 more than the average in the 3 month period July to September on the back of the surging rhodium price.
Thanks for posting the Kitco survey. Everyone overlooks the most important PGM as far as Jubilees short term financials are concerned and that is rhodium. Probably it cannot be traded so easily. Although only 8% of Jubilees PGM basket by volume, it is now around 50% by price. This little known PGM is in deficit and its current booming price is significantly funding the large CAPEX programme as the copper strategy unfolds.
In the cheapest 3 shares list today. To be faithful the site has been tipping Tharisa all year especially from April onwards. Must have helped today.
The Iridium content in the basket is more difficult to refine I believe and the margin retained by the refiner is far higher than for platinum, palladium and rhodium. Based on a broker note on Jubilee Metals, it seems their agreement with the refiner only returns 50% of the iridium metal content value, but 85% of the rhodium, and 90% of the palladium and platinum values. So great to see the iridium price going up so significantly but if Tharisa receives something like what Jubilee does the iridium figures being set out here may need to be halved!
The article below, found by billyusa on the other board, explains what has been going on at DCM and why Leon has not been able to get a PGM processing deal over the line so far.
https://www.news24.com/fin24/companies/mining/legal-tug-of-war-shutters-one-of-sas-richest-chrome-mines-20201218
In effect Leon is now in charge of the company. Colin has taken a back seat. It is his strategy that has turned the company around, and he is executing the deals which have positioned the company with such exciting growth potential. With the results the company are now showing he is worth every penny. Furthermore I believe he had a reduced salary in the recent past when the company's profits and cash flow position did not justify a higher salary. Don't know if the large increase was partially catching up for the lower salary in the poorer times.
My big concern is what is the succession plan to replace Leon should anything unfortunate happen to him?
Not worried about him being poached. He has complete control to show the world you can build a processing company to the size of a major "mining" company but without a mine, and prove all the so called experts wrong.
Tharisa have recognised this and are already testing a small scale refinery. Of course they can also improve their margins, so they have indicated they will be developing their own refinery ready for when their offtake agreements with SBSW and Impala come to an end.
Sorry gsg/ highly geared. I meant to have credited to you with this from other board. My original draft did so and then I had a problem with posting and missed you inadvertently on reposting. Very interesting find by the way.
Alerted to this copper and cobalt refinery in Kitwe area currently under care and maintenance. Jubilee interested? Shows Jubilee's strong position now importing copper concentrate for refining is taxed.
https://www.metalbulletin.com/Article/3915245/ERG-placing-Chambishi-refinery-on-care-and-maintenance.html
zambiareports.com/2020/12/14/muz-seeks-govt-intervention-kcm-liquidation-case
3cardbrag TW was commenting on the rise back to 11p and is very positive. His family trust is after all a shareholder! He believes that now Jubilee’s market cap is well above £200m the company is attracting the interest of more institutional funds. He has an initial personal target of 16p and forecasted profits of £60m or FY 2021. He really likes the developing copper strategy and diversification away from South Africa. He seems to have become a big fan after interviewing Leon on his Mineprophets investor show back in early July when he realised that the copper strategy could easily double the company’s profits in a couple of years and nailing Leon to accept a dividend was on the cards in 2022.
Leon certainly should be able to reiterate no equity dilution. Since September the company should have operational cash flow of around £5.5 to £6million a month. if the high PGM basket price continues for the rest of the financial year ,they should not even need any more debt to fund their large portfolio of known new projects, and a £60m PBT for FY 2021 is well on the cards.
Isnt the Impala mine net door available as well? Although Jubilee is the minnow in the sandwich, it has the key card. Buying either or both of the other mines would not be that attractive without Jubilee's block of PGM mineral resources to ensure an adequate life of mine.
Ragnarlothbrok, I think Phoevus was indicating that they should be able to improve the chrome extraction % before the remaining material is put through the PGM beneficiation. Doing this would automatically increase the PGM grade in the material.
As Kaiser_B has stated investors/speculators have totally different reasons for selling, and the reasons are more often or not related to the belief the share price is valuing the company too high! If you are a longer term investor, then the SP movements from day to day or even month to month are not that relevant unless something fundamental has changed that needs you to review the assumptions you have made about the company's future growth. From my viewpoint nothing has changed at all, so the growth story presumably you invested into is intact. If anything I am encouraged to invest more. With a bit of patience you should get the reward you expect, provided of course the assumptions you made were realistic and correct at the time of investing. Personally I have an initial target price of about 16p to be reached in around 12 months as the copper strategy in particular starts to deliver. Others are far more bullish in this time frame. It will be particularly interesting to see how the market reacts if the operational earnings of £30m to £35m that I expect for the first half of FY2021 are announced in mid January. Another potential large catalyst to the SP would be a positive announcement on Tjate, where it is believed there are ongoing discussions.
I must admit I was a bit cynical initially about the fine chrome DCM project. Technical excellence no doubt but could it make money in the current chrome environment. I put to Leon rather cheekily that it looked a bit like a Concorde project. Very courteously he pointed out the error of my ways. I was looking at a plant and not the process and how part or all of the process could be adapted in other areas. At the time it was becoming clear that Jubilee was to be the first company to be able to profitably take the copper out of low grade tailings and convert them into copper cathode. The key to the early part of the process was the learnings and knowledge we have gained in developing and running the ultra fine chrome facility originally at DCM. It has been the technical key to unlocking the 3 large copper tailings projects announced, with a fourth one by the looks of things on the way. It looks like parts of the process have now been incorporated at Windsor and will be at Windsor8 and at the over the road Samancor chrome plant at Inyoni. The increased efficiencies have no doubt secured the large ROM chrome ore supply contracts guaranteed at least for 3 years. So the DCM ultra fine chrome project itself may have lost money but what an investment it has turned out to be.
There are of course the standard political risks of operating in South Africa and Zambia. Operationally the copper returns are not yet proven but the proof of concept copper tailings operation that has been running at the Sable refinery since the beginning of the year has substantially de-risked the operational side as well as indicating the sort of margins that can be expected. A few months ago the funding risk for me was a big issue and how much the cash cow operations in South Africa would be able to support the large CAPEX of about $100m for the expansion in South Africa but in particular for the copper projects in Zambia, That issue has to a large extent now gone away. Banks are clearly wanting to lend for the copper projects and the surging PGM basket price means the $100m should be easily supported by the huge amount of cash now being generated with profits of £60-70m being forecasted for 2021 alone. Could the commodity prices badly turn against Jubilee. Very unlikely as deficits are now expected in all of the platinum group metals as well as copper in the near and possibly medium term future. Jubilees core metals will be at the heart of the green energy revolution. The macro winds look very favourable. The risk of financial problems on the chrome side of the business have also been substantially de-risked with only moderate exposure to the depressed chrome prices. The new ROM chrome ore supply contracts not only guarantee supply of feed to the chrome plants over the next 3 years but also large amounts of additional feed for the PGM operations. The chrome margins should increase significantly in 2021 despite there being a depressed chrome market. Internally Leon has built a very capable management team over the last 2 to 3 years, consisting of high quality process and project engineers. Jubilee has a reputation for processing excellence and for building projects on time and on budget. The real test has now arrived as to the managements team's capabilities as they have a demanding and busy schedule ahead of them over the next 12 to 18 months.