Member Info for NorthernShark

Has to be Leon as nobody else has 3m at 6p (Leon has 4m and Colin 2m). He still has 20m left but takes his shareholding to 3.5m.

Reference: Annual report

If you look at the last broker note (July 2020) the Copper production ramps up alongside the Zinc so this would suggest that the two processes will run at the same time using different processes.
One other snippet
"Sable Refinery has a current capacity of some 14kt/yr copper cathode. The expansion to 25kt/a would entail a modest capital cost, but as our model shows this is more than covered by the additional cash flow that the project generates. At full production we also expect the operating cost to fall. We currently keep our operating costs fixed at $2/lb but believe that this could fall by at least 25% at full production."

Copper costs come down as production ramps up so not just additional volume but additional margins as well.

A good read for those looking to get more of an idea about what Jubes are all about

Bit out of date but there ZCCM have just acquired Mopani from Glencore

"In April 2000, Mopani purchased assets of the Zambia Consolidated Copper Mines Limited (ZCCM) comprising underground mines, a concentrator, a smelter and a refinery at Mufulira mine site and underground mines, open pits, a concentrator and a cobalt plant at Nkana mine site in Kitwe".

As the Glencore debts need to be paid back first JLP may be able to get access to the concentrator and smelters in a short term basis until the mine is sold? We have tailings in Kitwe...

XTR News Release today - re:Eureka

Looks like Colin is starting to mine copper in Zambia at Eureka and will be trucking ROM ore until they have built a small concentrator.

"The Eureka small-scale mining licence, comprising 345 hectares, is accessed by a 100km dirt road from Kabwe, west of the Zambian Copperbelt district"

More short term feed until Roan fully functioning?

Ray, just to confirm copper concentrate will come from Roan, not Sable. The concentrate will be acquired and used at Sable to create (A Grade) copper cathode (which we are already producing). Roan will create a long term sustainable feed source to ramp up production levels at Sable.
Northern

Shiner, I agree - I think they will make an announcement as Roan commences and hopefully a view on the ramp up schedule.

I also think there must be some conversations with the Zambian government about how to monetise the Mopani assets it has acquired from Glencore

Jonah, I agree.
We may get something out of the blue which will be very nice but focus for me is on growing earnings in a consistent manner by adding projects and additional geographies to our portfolio in a controlled way.
To diversify metals I would like to see Nickel in Australia (Resurect conversations with BHP on Leinster) plus in the medium term a copper transaction in South America.
However in the short term building the pipeline in Zambia and SA through incremental projects will also do nicely.

Gshivers,
From the broker note I have the following (multiply the metal value by the decimal to get realised basket value)
Plat - 60% with 85% value (net smelter value) = 0.51
Paladium - 17% with 85% (NSV) = 0.1445
Rhodium - 8% with 80% NSV = 0.064
Plus small amounts or Iridium, Ruthenium and gold

The mix could also change with the different feed sources. But Rhodium does have a big price impact at the moment!

Northern

Elephant
"Under the Agreement, Braemore will provide all of the operational and capital funding required for the Project and will hold a right to 75% of all earnings generated by the Project until such time as 1.5 times of all capital invested by Braemore (being the aggregate of the Initial Investment and any further funding provided to the JV) has been returned by the JV where after Braemore’s right to earnings will remain at 60% for the life of the Project. Such 1.5 times of capital invested by Braemore will be interest bearing."
Roan
"Jubilee has secured the rights to approximately 2 million tonnes of ROM Material with the potential of increasing the ROM Material to 4 million tonnes as well as a targeted 2.5 million tonnes of copper containing tailings (“Tailings”) through the JV Agreement. Under the JV Agreement the parties have agreed to establish a 50/50 joint venture for the purpose of turning the Project to account."
Elephant 2
"Braemore is appointed as the exclusive operator and solution provider to bring to account the Tailings. In recognition of this right afforded to Braemore, the Tailings Partners are entitled to a future earnings share from the processing of their respective tailings by Braemore ranging from 17% to 30%. Such earnings share includes a capital charge allocated to each Tailings Partner by Braemore in respect of the capital expended by Braemore for the implementation and commissioning of the processing facility for the respective Tailings."

Hope this helps
Northern

WOBF - need to be careful on terminology.

The JV's on the copper are for turning the material into concentrate (Phase 1). The JV will then sell the concentrate (approx 25% Copper) to our Sable refinery at market prices. Sable will then refine the concentrate into A Grade copper cathode.
For Jubes they will make a profit from the JV (which will be split according to the terms of the various JV's) but also from the cathode ($4k cost so at todays prices $4k margin). We own 91.5% of Sable but can convert this to 100% which I am sure we will once everything us up and running.

Plus the cobalt of course.

What we don't know is the margin at the JV phase but Jubes will get all their capital back for building the concentrators before the JV partner sees any of the profit.

Northern

Shiner, my company advises organisations on their fleet strategy. From a supply side there is a massive change required from OEMs to go electric. Many have been slow to do so because they will have to write off massive investments as they re-tool production for EV's and don't necessarily have the financial capacity to do so - albeit the EU have just allowed huge scale subsidies as part of the Covid relief fund.
This is why Tesla is worth a heap more than the next 6 biggest manufacturers combined as they are quite a way ahead.
Infrastructure will change massively to support the change and we have only scratched the surface so far.

Also worth considering "a fully electric bus uses between 11 and 16 times more copper than an ICE passenger vehicle — depending on the size of the battery and the actual bus."

Daily fluctuations may happen but long term copper is only going in one direction

Shiner, very true. I work in the fleet industry and just look at how many UK councils have currently committed to net Zero Emissions (312) many by 2030. They have no idea how to do it yet but its a whole heap of vehicles and infrastructure and this will be mirrored across the world.

Biden commits to replacing the federal fleet of 645,000 vehicles with electric and introduce 550,000 charging points. Lots of copper and cobalt required...

https://www.nature.com/articles/s43246-020-00095-x#Sec16

"We find that in a lithium nickel cobalt manganese oxide dominated battery scenario, demand is estimated to increase by factors of 18–20 for lithium, 17–19 for cobalt, 28–31 for nickel, and 15–20 for most other materials from 2020 to 2050, requiring a drastic expansion of lithium, cobalt, and nickel supply chains and likely additional resource discovery"

We could become a Cobalt play if this scenario plays out... Leinster Nickel project anyone?

Earnings are gross profits. Corporate overheads, depreciation and tax amongst other items needs to be taken off before profit after tax. I would expect north of £50m+

Moneyhawk, I have been using 7 and 10 as different assessments of where I think the SP should be. Ultimately as the strategy plays out with the copper I think that will rise. It will also rise of the back of different country and metal exposure.

Northern

Ready, steady...

Application will be made for the Placing Shares to be admitted to trading on AIM and to be listed on the Altx of the JSE Limited, which is expected to take place on or about 21 January 2021 (“Admission”).

Good spot Shiner - nothing really of note apart from they are reviewing their numbers. Given what the previous ones said £60.8m PBT before the basket prices moved up, I look forward to seeing their new (upgraded) numbers for this and next year.

Strategy paying off!