Member Info for NorthernShark

"During this period overall production rates are capable of being maintained in excess of 600 copper units per month before offering the opportunity to increase to beyond 1 000 tonnes per month once Roan returns to full production."

From the last RNS.

Https://www.bloomberg.com/news/articles/2024-01-30/india-steel-demand-set-to-grow-up-to-10-top-mill-says?leadSource=uverify%20wall

Steel demand in India rising by 10% according to this article which should chrome prices.

ATB

Northern

Seisnav,

Correct in terms of there is £21.5m of losses which can be offset against future profits - view this as a balance sheet asset. The exact impact will depend on which countries profits are made / costs incurred but I am sure they are taking advice on how best to maximise the benefit.

In terms of the capital investments generally all costs will go to the balance sheet until the asset has been comissioned and then the asset will be depreciated over its assumed economic life. So for example if the Thutse module has a forecast 8 year life at $8m then it will incur $1m depreciation cost to the P&L each year. Business development costs can also be capitalised.

Cash flow is a whole different ball game due to timings of payables/receivables and advanced payments for build slots for example. Only those on the inside will have sight of this and thats where the CFO will make their money.

I will also take a look at how the PGM containing material is treated. My guess is they are creating more than is currently being used with the residual stockpiled until the PGM basket price recovers or they get additional processing capacity. I can't see them using the JV at this stage but would be a source of additional cash if required - albeit at very thin margins.

Lots of moving parts so the key thing for me is production profile as opposed to a full P&L. As long as the production profile keeps increasing and they have a good handle on cashflow then should all fall into place.

ATB

Northern

Jonah,

I think it would merit an RNS if nothing else but to confirm it is going ahead. There should also be some more detail as to how it will operate, expected timescales etc...

ATB

Northern

Summit,

My suggestion would be to have a look at the balance sheet and production profile.

I think you will find there has been lots of progress in developing the value of the company.

ATB

Northern

Kalan, Not sure I agree with your assessment.

Roan is delayed by 8 weeks and has had well publicised issues. The positive is they have completed enough of the work that they can bring parts of it back on line at 60% of the forecast capacity (600t rising to 1000t per month when compete) so its not like nothing is being produced.

Chrome - as you point out is self funding the expansion. When complete we either carry on expanding via new profitable opportunities or it becomes a long term cash generator for the group. Amazon re-invested for years to get market share so I have no issues with this course of action as long as there is enough material from quality projects to go after - if this ceases to be the case then stop the investment.

PGM's limited to own feedstock. My view with the expansion in Chrome activities is they have plenty of feedstock (they mentioned this at the AGM as well). They are currently only putting this through Inyoni which is the most profitable route. They have access to 3rd party sources via a JV but at todays prices it doesn't make sense to do this which I agree with).

The one issue I have is there has been no mention of the bulk trials for the tailings which should have been complete in early December.

ATB

Northern

Summit, they would still need to re-manufacture the part and my guess is they will now prefer local manfacturing as they will have more control over this.

Whilst the delays to Roan are obviously frustrating I agree with Bass that they do thankfully appear to have been conservative with the numbers on copper.

Another 2k from Sable as well with the sulphide expansion.

No third party PGM production so Inyoni operating at or near to full tilt.

Chrome rising nicely in the face of sustained higher prices.

ATB

Northern

People interpret seemingly the same data in different ways - thats what makes a market!

Completely agree SeisNav!

All I now see are green boxes where how should I put it "very low or no value" posters are putting forward "opinions/drivel".

ATB

Northern

Chester,

I think they may stockpile the additonal PGM material rather than processing it via the 3rd party mainly due to the fact that at todays prices the margins will be very thin given the JV split.

My feeling from the discussions at the AGM were that there will be other redundant capacity becoming available due to the impact of the lower prices on the mining sector as a whole.

The ideal scenario would be to pick up a plant on the cheap just as PGM prices rise!

I also understand people want news in real time here but Leon does have a lot on his plate!

We will get updates in due course which will hopefully confirm progress on a number of fronts namely: 2Q Production, Thutse Expansion, Project M implementation, Roan Concentrator Comissioning, Mufulira S**g Project, Sulphide Circuit Expansion at Sable and the IRH SPV project plan.

Just going through the list demonstrates the near term potential for Jubilee!

ATB

Northern

Berenberg and the like remind me of the operators of the matrix board speed limits on the motorways - most of the time the numbers bare no resemblance to reality and all they do is create confusion.

Seisnav, that figures and would indicate there is a decent working relationship between the two parties. Possible acquisition target for JLP in the future I would imagine!

ATB

Northern

Great find Seisnav - I kept listening to Leons wording in the interview but couldn't find anything myself so appreciate the research (as always!)

Northern

Telly, timing is everything and unfortunately the circumstances are not ideal!

Points I took from the call:

1. It is worth reminding what has been built in the last 4Y going from 40k Chrome to 1.4mt chrome and the associated PGM's.

2. JLP got first mover advantage in SA and have proved they are the top of the tree in terms of processing ability and capability.

3. They have secured the prime assets in Zambia and are now at the point of having solutions for each of the three types of feed.

4. The new copper project is huge and accelerating this will bring a step change to JLP.

If the PGM prices were not in such a depressed state this would have been self funded. I view the raise as a loan to get the new project implemented then they will be capital light and cash generative. At this point as muted on the call then share buybacks become feasible which I would hope cover all the shares issued in the raise and then some!

Lots of newsflow to follow early in the new year and a very exciting time to be a shareholder of this company!

ATB

Northern

Jammer,

I disagree that the SPV will only be selling concentrate. The following passage is taken from the RNS:

"Preliminary estimates of production and financial metrics indicate the potential to produce approximately 2,000 tonnes of copper per month from four processing modules at an estimated cost of US$3,800 per tonne of copper. The production cost per copper tonne assumes that 60% of copper production is refined to produce copper cathode with the remainder either toll refined or sold into the market."

My question is - will the 60% increase with the extension at Sable which the fund raise will cover?

ATB

Northern

Frog,

My emotional response is very similar especially as those at the AGM were told this wouldn't be the case and that was just over a month ago!

From an investment case I would like to see how this brings the projects to fruition quicker - are we talking 12m down to 6m or 12m down to 10m. If it is the former then I am happy enough.

Sable expansion - my thought is this could have waited as the plan was to sell the sulphide concentrate to the market. I would like to see how much additional capacity this provides and what this does to the economics.

Mufulira dump - would be good to see this moving.

I get the sense that the speed of certain projects has caught them out but are trying to leverage the opportunity which I agree with.

A commitment to do a share buyback when Mufulira and the 350MT projects are up and running would help as well but guess thats wishful thinking at this stage.

ATB

Northern

Key Short Term Catalysts:

IRH SPV formation by 30/1/24

Project M - Module Capacity Decision 13/12/23 and Deployment by 09/08/24

Roan new front end implementation - any day now

Mopani S**g - SPV formation and plan to implement

Semi bulk trials for tailings process - was due 13/11/23

With this in mind we should get more news before the festive period or at the latest very early in the new year.

ATB

Northern

Agreed Mikey - looks like a crass own goal or worse some form of deliberate act to mislead shareholders!

Check the RNS Frog

RNS just confirmed there is no vote required and is an administrative error