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Interesting deal, and seems a good move. Assuming our fine chrome recovery developed for DCM can be applied here, then there's a high potential of increasing recovery rates and profitability.

It also secures the supply of PGM material being delivered to Northam, where 2,800oz PGMs a month are targeted, and could mean that part is now a much longer life project than just a couple of years that was originally assumed.

A major positive here is that the bulk of the purchase cost is being funded through finance, which shows that lenders are now willing to fund us to buy assets based on future earnings. A small amount of dilution also involved, but its only the equivalent of about 16% of the purchase cost.

One thing that is a little unclear is whether the 1.8 million tonnes of material is the material we already own the PGM rights for, or whether this is additional material.

Saw this and thought it may be of interest as they are on the North Slope. Eni's strategic plan shows that they're preparing their expenditure for exploration on the basis of oil being around $60 for the next 3 years, and they still expect to achieve an increase in cash flow at those prices.

https://www.eni.com/en_IT/investors/strategy/strategic-plan-2018-2021.page

Not long to go before Christmas and the end of the quarter, hoping we'll be able to end the year with some good news to give us a good start for 2019. Maybe news will be with us soon that the fine chrome recovery at DCM has started, and perhaps an update from Hernic on whether they've hit 2,500oz for the 2nd month in a row. Would be great if the speculation around sable is also confirmed, but I wouldn't be surprised if that's going to take a bit longer, all depends how far advanced they are with negotiating any deal.

Thank you brom for all your time spent posting and keeping us up to date with a whole range of relevant matters. I find your posts far more helpful than some posts that crop up. I did find it quite amusing though at the suggestion you had inside info and had bailed out. I've no idea how anyone could have inside info on the success of the winx drill which hasn't started, the future for Yukon when analysis isn't complete, a farmout out for unconventional when the process hasn't started yet, and finally the conventional farmout out when the target has been given as year end with possible extension advised from the start if interested parties want more time.

From what we've seen so far the funding facility may not cover it unless the terms are renegotiated. It'd probably count as buying an asset which isn't what it's for. It's possible that we might have enough cash to cover it. £6.3m cash at the end of June, and that should be rising now with increasing production at Hernic. It's also possible that with the increasing earnings and other projects coming on stream we'll be able to borrow money fairly easily to buy it.

Where the existing funding facility will come in would be to pay for renovation/improvements/expansion of sable.

There's a bit of info around on Sable if you google it. It's owned by Glencore, and is currently on care and maintenance. It was built as a zinc processing plant and has zinc tailings in situ, appearently of a good grade. It was later converted to copper and cobalt to process material from the Ruashi mine in the Democratic Republic of Congo.

So it opens up some new possibilities, with more zinc tailings and also copper/cobalt involved, which LC/CB have referred to on multiple occasions now, plus a link to another country. It also has a sulphuric acid plant, with the excess production previously sold to other copper producers.

As for the price, Glencore bought it in 2011 for 190m Rand, approx. £10.5m. So we're not talking mega bucks here, and since its costing them money being on care and maintenance, then perhaps there could be a good opportunity for a deal here.

It's always possible that can happen, although BMN's rise did take a little longer than a month. It went up in a few big jumps over the course of about 18 months. 2p to 8p in March last year, then stayed around that level for a year before jumping to the 20p+ range in March this year, and jumped again to 40p+ in Oct/Nov.

The reason is down to Vanadium and the sky high prices. When BMN started its rise last year they weren't producing and were loss making, so we're in a better position than they were.

And encouragingly for us they've jumped to that mid-cap value before the earnings have hit their end of year accounts.

Mid cap does look a very remote goal at the moment, but CB seemed more determined than ever to keep mentioning it in the webcast. The difference now is that he's referring to being valued on earning multiples rather than his belief we should be valued on the potential of our assets, with a rough timeline given of next year and into 2020 for those earnings to come through.

Does he have a point? It may be that through a bit of luck (and misfortune for BMR) we have stumbled into ownership of a huge earner at Kabwe that is within our technical ability to develop, and earnings from current projects may be enough to fund the development on our own as well.

But anyone who looks at both our history and Kabwe's history under BMR ownership would be understandably sceptical that it's going to produce significant earnings anytime soon.

However, piece together the information out there and it's now looking more possible than ever imo. May take another 12-24 months for it to really take off though.

I don't know what the split is, but tbtt's estimate seems reasonable. From what I understand the two elements are fairly interchangeable in catalytic convertors, so it wouldn't take much for the current palladium demand to switch back to platinum. But we're talking about big supply chains, large scale manufacturing and contractual commitments on quality/performance of those components. So once a specification is in place I doubt it would change much until a full redesign of the component takes place, which wouldn't be too often.

bobbill, yes you're quite right, LC gives those figures, which are a lot higher. My take on that is that he started off with saying its on the basis of 40 tonnes per hour. In reality I don't expect the plant to run at full capacity continuously, so I've been a bit more conservative. Also, if you look at the grades for the various tailings piles, some have much higher % than the average, and some have much higher proportions of zinc or lead. It would make sense that they cherry pick the best tailings for the metals that have the highest prices at the time. So I've just done the rough working using the average grades, as I've no idea which stockpile they will be processing first.

mogli - the 130,000 I've assumed would be around 10800 per month, so not far off, and hopefully a lot more to come.

Sumo - Yes multiple years of tailings, at the initial rate about 50 years! But if they increase the throughput the length of the project will reduce. However, should still be good for at least 20 years or so.

edzi - yes that does appear to be what they're saying, in effect they plan to concentrate the tailings, so that not as much needs to go through the plant, and that the 40 t/ph plant would effectively be processing the equivalent of a lot more that 40 t/ph of tailings.

I've been looking into the earnings estimate of $60m that was in the proactive investors article to try and gauge whether this is realistic.

In a nutshell, I now think its possible based on a few bits of info from the webcast and BMRs old figures for the amount of metal in the tailings. In the webcast I picked up on following info:
1. Plant being built is to process up to 40 tonnes per hour.
2. Gross profit margin of around 40% is what they're aiming for
3. Vanadium content around 1% of the tailings, and earnings from vanadium will be more than for zinc even if the current Vanadium price is halved.

From the BMR information on the tailings, the average content across the 6.3M tonnes is around 5.5% zinc and 5.5% lead. The grades vary with each stock pile, but those are the averages.

So there's enough information here to make a few rough calculations, with some assumptions. The assumptions I'm making is that the plant won't run at 40 tonnes per hour continuously, so I've worked with a figure of 30 tonnes per hour for 12 hours per day, and they won't recover all the metal, so I've assumed an 80% recovery rate. Applying these numbers gives:
- Approx 130000 tonnes per year to be processed
- Will yield around 5800 tonnes of zinc and lead, and 1050 tonnes of Vanadium per year
- At current prices, revenue would be approx. zinc £19.5m, lead £6.3m, Vanadium £47.3m = Total revenue £73.1m
- At a gross profit margin of 40%, this would leave approx. £29m in earnings ($37m).

Now add in earnings from Hernic, DCM and Platcro, its not too far fetched to see us adding another £16m when all projects are fully opperational to get to £45m (approx. $60m) a year, especially with Hernic's earnings for last quarter being £1.9m (equivalent to £7.6m per year), and that platcro may produce more PGMs than Hernic.

All in my opinion of course, and still a long way to go.

It'll be because the last trade of the day yesterday shows as 2.7p, an after hours trade and higher than anything else yesterday. Ignore that after hours trade, and the trades today are up from yesterday, but what shows on the risers board depends on just how the system calculates % movements.

Always difficult to guess which way this is going to head in the short term. The rise so far this week is very good, but we're still a long way off getting back to the SP pre-kabwe and BMR. Is this a spike or just a correction where we'll get back to the 4p range we were in last year?

Good to see a positive article that isn't fixated on the price of platinum, which we won't be as affected by when Kabwe is up and running.

Interesting line in the article which says "some market watches confidently predict that Jubilee's earnings could go as high as US$60m per year in a relatively short time".

Working with a low P/E of 7, that would give us a market cap of $420m, or approx. £330m, equivalent to 25p a share! Quite a jump from where we are at the moment. Using our current operations as a guide for profit margins, I reckon that we'll need to see revenue of around $210m per year to generate those kind of earnings, which would mainly have to be attributed to Kabwe as there's no way our PGM/chrome operations could get anywhere near that.

So any thoughts on whether that's realistic?

It would be good to see some estimates from JLP on how much vanadium there is and how much could be recovered, along with the timescales for building the V circuit. Until then its rather academic, we may have a huge amount of value sitting on the ground, but we may not. Lots of uncertainty with this, so I don't expect we'll see any recognition of this in the Mcap until we know what the plan is.

Looking back at the past 2 years, we've had an investor presentation 26th Nov 2017 and an Operational update 1st Dec 2016. Both of those would count as an update on all projects.

So an update on all projects by the end of the year would be consistent, but may not be anything to get excited about. Figures crossed though that it will be the start of the transformational news!

Less than that Spinefx, assuming no announcements are going to be made over weekends or from Christmas eve onwards, that gives us 24 days to Friday 21st Dec

Speedy, my thoughts on your question "Why do we need to deal with funders who charge such a high cost?" - Business finance is pretty similar to personal finance, the more you need to borrow money to progress and the lower your income is, the chances of getting a good low interest rate deal are very small. If you don't actually need to borrow money and you have a high income, its very easy to get a great deal.

That's the position JLP were in when financing Hernic. We needed the money and were loss making. If the project had been a failure, we wouldn't have been able to repay the loan. That all makes it high risk for a lender, and our options on lenders willing to take that risk would have been limited.

Now we are starting to generate decent earnings and repay loans from those earnings, our options for finance will have increased.

If you think $50k for 1920 acres is high, have a look at what Repsol paid for 2 blocks (536B & D) on the edge of their current leases, which are about halfway between Winx and Icewine. Over $500k for 2880 acres.

OK, thanks for the info brom