Member Info for NorthernShark

Results out this morning and for those in doubt about what the increase in metals prices can do for the bottom line then have a look as its a good read across to what we can expect.

Come on Leon - would be nice for you to get the last quarters results out as I am sure they will be in hand by now...

Shuttts - not a miner - a re-processor of waste materials.

The difference being its lower risk as the material is at surface and uses much less manpower

Jonah - I agree regarding the refining capacity. There are a number of mothballed sites in the country so this may be more economically viable to use than expanding capacity at Sable.

Ultimately both would be very nice as it would allow us to produce north of the 25ktpa current target.

Northern

WOBF - I remember previously that the Cobalt process was complete and functional. Roan is cobalt light whereas Elephant is a higher grade so may need to wait until next year for substantive cobalt amounts.

Details of the ROM ore could be interesting as this could be cobalt rich potentially.

I would guess Leon may do a couple of interviews in the coming days which may provide more snippets.

Northern

I am with Sumo on this one, would prefer to keep expanding to get more copper or a foothold in other metals or markets.

Dividend can wait for a couple of years for me unless we start getting priced out of other deals which seems unlikely.

Northern

AW - I agree the actual numbers should be much higher especially with the cobalt.

I always try and be a little conservative with the numbers until I see some of them filtering into the P&L but suffice to say I am more than happy to be sat on 916k shares at an average of 4p.

The future as you say is very bright indeed!

Northern

Certainly seems our copper projects have been timed well.

Executed when the copper price was $5.5k a tonne. At $10k a tonne thats another $112m profit a year when we hit 25ktpa output.
I am also of the opinion that there are more deals in the pipeline for copper in Zambia and the medium term aim will be significantly higher than the 25ktpa.

Start of the journey for me, certainly not the end and haven't come across a better investment in my research but if others have I would love to hear about it.

Northern

Gshiv, whilst I would also like a quarterly operations update I am happy to wait as the strategy continues to play out.

Copper coming on stream as many analysts think it will get to 10k/t in short order and we did our deals at 5.5k/t - margin improvement and return is outstanding. I would also think the increased cashflow will be bringing forward plans for Elephant 1 and 2 or expedite other deals which I believe management are working on now.

That coupled with the increasing basket price for PGM's, reducing the cost of production and getting more control over feed source keep me very happy with my investment.

The market may wake up to this growth play at some stage but I am happy to hold and see the strategy play out.

Northern

Metal Pricing
? Average PGM basket price for the quarter increased by 37.1% to US$3 290/oz (ZAR49 273/oz) in Q2 FY2021 vs Q1 FY2021 and up 80.5% vs Q2 FY2020
? Following continued strength in PGM prices post-quarter end, current spot basket price for Tharisa's prill split is US$4 011/oz with spot prices for the major PGMs as follows:
o Platinum US$1 239
o Palladium US$2 630
o Rhodium US$27 823
? The PGM markets remains tightly balanced, with a bias towards supply deficits, particularly given production constraints at some of the larger producers. Demand for all PGMs remains globally robust
? Average metallurgical grade chrome price for Q2 FY2021 up 14% to US$155/t (ZAR2 304/t), vs Q1 FY2021 of US$136/t (ZAR2 114/t) and up 20.1% vs. Q2 FY2020 of US$129/t (ZAR1 965/t). The current market price for metallurgical grade chrome is US$155/t to US$160/t
? Demand for chrome ore remains healthy and Tharisa, despite the logistical bottlenecks experienced in South Africa, has been able to deliver its products. Prices are expected to remain elevated, in part to compensate for the increase in freight costs.

Bodes very nicely...

Northern

Looking at past releases we could well get an update next week.

I know they said they would only do half yearly but with so much going on at the moment I would be surprised if they didn't.

Would be great to be able to do some comparables to the broker note as well...

https://www.piworld.co.uk/2021/04/09/stockopedia-piworld-virtual-stockslam-april-2021-hosted-by-damian-cannon/ from the other board - JLP 52mins in

Northern

So my take for what it is worth:

1. No value for Tjate
2. No JV profits from Roan or the two elephants
3. 70% value on the copper projects (risk)
4. 50% value on the Kabwe projects (Zinc, Lead etc...)
5. Economies of scale on the copper production cost not included (identified as potentially $27m a year)
6. Zinc - nothing in terms of income in 2022 yet looks like the project will be commissioned Q3 of this calendar year
7. Copper seems light in 2021 if we have already produced 1,400t
8. Cobalt price and assumption of 1% cobalt content which if I would need to cross reference against the elephant numbers but seems a little low.

So all in all happy with a 21p valuation with so much more "potential" upside. I am more nearer Sumo's 30p to be honest.

Northern

Having read through half of the note it looks rather conservative for me! Will give full reasons when got through all the report

Jammer,
Agree with your points. There is that much going on at the moment there should be regular newsflow right the way to the full year earnings numbers.

I am also expecting some big business development news in Zambia off the back of Colins comments in the RNS yesterday!

Hopefully they release a quarterly report for Q1 as could make very interesting reading!

GShiv,
My tracker using Johnson Matthey monthly average prices and our basket % and smelter pay (based on last detailed broker note) is as follows:
Jul-20 $1,308
Aug-20 $1,594
Sep-20 $1,756
Oct-20 $1,768
Nov-20 $1,858
Dec-20 $2,002
Jan-21 $2,245
Feb-21 $2,516
Mar-21 $2,876

Northern

https://www.youtube.com/watch?v=t03LsWgC05o From the other board.

Leon clearly excited about the copper. Cobalt less of a by-product for Roan but significant for Elephant (Q3 21 indicated)

The best part - will achieve 25k tpa "well within 4 year target"

Homey, my bad - I mean't earnings as well of $2,100 so like-for-like comparison

Homey,
Can't agree with your assessment - why would JLP sign all the lower margin chrome deals unless they had a route to process the PGM by-product? Nobody has given any official timescales on Eland as far as I am aware so I would think we may expand Inyoni further to take up the slack - if you have official word then please share it with us.

Metals prices are what they are and is outside the control of JLP but I think the basket price is currently around $2,100 rather than $1,500.

The scope to grow earnings through copper and cobalt will be the growth catalyst and a very large one.

This is just my opinion however and would be interested to hear others on the subject

Jonah,
I noted Colin only referred to our current resources as medium term! I thought we had 20 years+

Hence if this is his term of reference then long term involves??

Northern

Chart,
I think we have done a small bolt on or two as they mentioned 5 copper deals and I can only recall Roan + 2X Elephants.

Reading Colins blurb again and I think we are looking at something big/massive in Zambia!

Northern