Member Info for NorthernShark

Shorn, look into the notes in the accounts. Costs which have been capitalised within business development area. Conroast plus a number of other process innovations which must have demonstrable value or they wouldn’t be capitalised. Leon has also stated they will not publish their processes - as he knows stuff the rest of the market doesn’t.

Mikie, love the enthusiasm. My workings underplay any metals supercycle as that could be short lived. Fact is Jubes makes good margins even with lower metals prices. They will still play when the mines are in C&M. Fundamentals great and only scratching the surface. For those who think our methods can easily be replicated look at the notes to the accounts and see the innovations in process technology. Shrewd investments by the management paying off.
Said to my missus I may top slice a few this morning as my average is 3.8. She wasn’t having any of it. I will give it 18 months at least as only then will we see the real value

Must have failed due diligence. Looks like a tiddler compared with what we have on the deck now!

Given Leon has had a couple of nibbles at Australia before I can't help but think this is the next geographical destination (once he has mopped up another billion tonnes of tailings in Zambia of course)

This was mentioned on a recent webcast. BHP still have issues with the dams at Leinster and are classed as potentially very dangerous. The nickel price is strong so may improve the project economics to the point the two dust off the plans and resurrect,,,

Acquisition of additional copper refining capacity in Zambia would be my guess. Will fill Kabwe and then some with the concentrate already on the books. A number of operations have been mothballed so we maybe able to pick one up close to one of the projects.
That said given the margins Jubes make it could be PGM's or Chrome as well

Getting value out of Tjate would be like a second serving of gravy on a Sunday dinner served in a giant Yorkshire pudding!

Good spot Shiner. I ran the numbers on the margin and got to 90+% but am sure costs for the Kabwe facility may be elsewhere or could be treated as part of the plant setup Capex so will need to wait for that.

I have used this site http://www.platinum.matthey.com/prices/price-charts to plot historical metals prices based on the basket split and smelter % posted on here. For Q2 PGMs I am forecasting £20.5m revenue and £16.1m earnings (1.37 £/$) and 15,000oz production (based on Q1 margins)
If the quarter is replicated for the remining half year I get £82.1m revenue and £64.4m earnings. This is for PGMs only and does not include Chrome, Copper, Cobalt or any increase in PGMs as part of the Inyoni increase in capacity.

This will be sensitive to the Rhodium price which is the main driver of the basket price

gshivers
There will be some cobalt sales as part of the number but will be relatively minor. I would guess circa 400-500t of copper cathode has been produced in the last FY. If they have scaled up other ROM material in the first 6 months (as has been previously communicated) as well as the 100t/mth from own tails we could have averaged say 250t/mth or 1500t. Say 1000t being conservative so possibly another $3m profit in addition to PGMs with room to the upside.
Key question is how quickly our own concentrate can be processed at Kabwe and the speed of the ramp up - hopefully more details as part of the 6 month operations review

Northern

If they can re-visit the nickel project in Australia with BHP that would certainly be interesting given the price of Nickel recently. Solid country and working with a major but would rely on BHP. They do have a significant issue with the tailings dams however...

gshivers - Most of the Chrome (85% I seem to recall) is now on fixed margin agreements. I would take the margin from the next results and extrapolate as I would think it will be as accurate as you will get.

Northern

Jammer, this is why I prefer to look at EBITDA as a number of the other variables will depend on the policies Jubilee adopt in the books. In terms of taxation we also need to remember this from note 7 of the accounts:

"The Group has estimated tax losses of £16 million (2019: £30.2 million) to carry forward against future periods."

There will also be increased income from JV's until the initial payback is complete and the JV's resort to the normalised profit share arrangements.

Either way the numbers are going north and I personally am awaiting a brokers update so I can adjust my own calculations on forward earnings / margins etc...

I am awaiting an updated broker note as we may get some updates on:
The unknowns in terms of the copper.
1. How quickly does it ramp up (from 2021 to full capacity post Elephant)
2. How much profit are we making from the JV's on the concentrators once the costs have been paid off (which may distort the books for a while)
3. How much excess concentrate will be sold onto the market (i.e. the amount which we don't have the refining capacity for)
4. How much cobalt will be produced and at what margins
In addition the other circuits at Kabwe starting with the zinc then the others (margins?)

For 2021 we may also have expanded the PGM capability at Inyoni which will add another 1k oz per month.

Very much looking forward to the operational update at the end of the month. Maybe we will even see the copper/cobalt split out as another earnings stream in the update which would be really helpful

I am now knee deep in this but don’t think we have scratched the surface in terms of SP. I could slice but don’t know of a more compelling investment so will stay long and strong! Respect all strategies but having been in this for about 10 years and average of 3.7 this could be my golf retirement plan.

Financials wise I would like to see a revised broker note but based on previous estimates and news released I roughly estimate EBIT of £70m (2021), £121m (2022) and £168m (2023).
30p+ by end of 2021 but would hope for more given the obvious earnings growth potential

Jammer, you may be right. I try and be conservative with the upside a bonus!

Looking forward to seeing the production and margin numbers for the end of Q2 (Last week in January if reflects last years timing). Earnings should hopefully top £30m and give the market another indication of full year earnings potential here.
Probable news - commencement of copper production, next copper deal and DCM
Possible news - Tjate or another as yet unknown project could add further stimulus.

All the best everyone.

2021 promises to be a very interesting year! Long and strong Jubes!

Cavey - you mention Conroast

9.2.2 From the Accounts - Conroast is being used to good effect

Included in business development costs is an amount of £ 281 231 (2019: £ 943 366) which relates to the ConRoast technology, converting and autoclave process, CVMR® process and leaching and hydro-processing. During the period under review the ConRoast process has contributed to the process solution being developed for the Group’s Windsor PGM Operations which is the key reason for Jubilee receiving a premium for its produced PGM concentrates free of any chrome penalties. The Windsor PGM Operations commenced production during H2 2019.

Early retirement for me as well Mikie if it does what I think it can. My only fear is a takeover.

Interesting to hear that there are mothballed copper smelters in Zambia as they can't get enough locally sourced concentrate... Zambia could become a whole lot bigger than I originally thought. Zinc prices rising as well

As per the annual report Leon has 23million options between 3.5p and 6p strike price.

He has plenty of skin in the game!