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I was just looking at that Jonah, I see they are quoting a chrome price of US$335 for 42% chrome. I’ve been assuming a lower figure in my estimates so if that’s representative of what JLP are actually earning it’s a nice little boost.

There’s quite a lot packed into the RNS which I think the average punter will miss, I just wish Leon would be a bit clearer on the details, not everyone is a chemical engineer!

Here's some graphs I put together which you might or might not find useful: https://tinyurl.com/3nvumz5t

The first is a scatter plot of earnings per tonne of chrome with the chrome price. The data is a bit thin still but it should give a ball park estimate of chrome earnings.

The second shows net cost per copper tonne and number of tonnes sold. As per the notes, I've removed the cobalt credit and the extra charge for power to Sable, to give a more level playing field. Note that the last two columns are quarterly updates but the cost per tonne should been unaffected.

The last plot shows PGM unit cost with PGM ounces. You can see the step up after the Eastern Limb deal was announced, as transport costs start to affect the unit cost. Producing more ounces locally from the new contract should cause this to fall as the percentage of ounces from the EL drops. Also once the EL chrome plant gets going it should come down significantly.

I thought I'd post this tonight as I suspect the board will be busier than usual with idiots this week!

Just thought I’d pop by, now it seems the license issues are finally in the closing stages…. What a surprise to the the usual suspects trotting out the usual tired nonsense! Oh well, see you when the announcement happens!

Says IE as his finger hovers over the buy button!

Bushytailed is a lying trader who will say anything that supports his current position.

Keep reporting him… if enough people do then he will get banned. I might start reporting him on all the other boards he spreads lies on as well.

Chrome ore market morning review on 18 August 2023

Fri, 18 Aug 2023 01:29:00 GMT

www.ferroalloynet.com: South African chrome ore 40-42% concentrate price is 295-300(bulk). South African chrome ore 42-44% concentrate price is 335-340(bulk). South

WH Ireland quote between 40-42% in the research note so thats what I’ve been using for pricing.

I've been looking at the numbers and trying to get a better understanding of how a change in chrome concentrate price translates to revenue and earnings. The majority of our production is currently at a fixed margin with a small percentage from the fine and ultra-fine chrome at market rate. Here are some plots I did of the data from the 6 monthly updates (bear in mind this is unaudited data):

https://tinyurl.com/yaprrbky

The things that stand out for me from the last update on 31st Dec 2022, although chrome production increased from the previous update, both revenue and earnings decreased. Part of the reason for that is a drop in the chrome concentrate price but that on its own doesn't account for the size of the drop. It's possible that the power issues which affected the Windsor plants have affected the higher margin fine and ultra fine chrome circuit and that production was ramped up on the lower margin chrome to cover the production shortfall.

Assuming the Winsor plants are now fully operational again we should see a bounce back in revenue and earnings in the next set of numbers for the period to 30 June 2023. If you look at the chrome revenue / tonne it tracks the chrome concentrate price pretty closely so from that we can extrapolate the chrome revenue / tonne based on the current chrome price. It should be somewhere in the region of US$95/tonne. Similarly we can extrapolate the attributable earnings / tonne to the current chrome price, I estimate it should be US$16-18/tonne by 30 June 2023. From July onwards there is the additional chrome production at a significantly higher margin (roughly 20%).

Assuming a figure of US$16/tonne for earnings on 1,260,000 tonnes production would give roughly US$20 million in earnings. Using US$18/tonne would give roughly US$22.5 million in earnings.

The chrome production from the recent contract according to the RNS should be at approximately 5x the current tolling margin which should equate to roughly US$20/tonne. The initial target of 200,000 tonnes of chrome concentrate would add roughly another US$4 million in earnings (although I don't think we will reach that in the current financial year).

So in total we could well be looking at US$20-25 million in earnings from chrome in a 12 month period, assuming the chrome price is maintained. This is significantly more than we can expect from PGM's at current prices.

Thanks Agricore, all useful information. Generally I don't take my calculations beyond revenue and earnings because I don't have that kind of financial background. It's good to know what else to look out for.

Thanks Nelson, that makes sense. I’ve always found accountancy to be a bit of a black art… maybe I should take a course!

Thanks Northern, so if I understand correctly the capitalisation costs applied per tonne of copper should drop down as copper production increases. I guess the numbers should be buried in the financial report somewhere, I’ll have a look for that later.

Also a typo in my previous post, should have read:

“ I think the potential earnings from chrome could be considerably higher than in FY2023”, not 2024 (obviously!).

Agricore, I do still produce estimates for each financial period, I just haven’t bothered posting them here lately, I was waiting until Roan is in a more steady state production so the numbers are more predictable.

My estimate for FY 2023 is very similar to yours at ~ US$34.5 million earnings (gross profit) before any deductions.

I haven’t looked at FY2024 yet because there are too many unknowns at the moment, once we know what happening with the Roan expansion then I’ll take another look.

I think the potential earnings from chrome could be considerably higher than in FY2024 (I’ll do a separate post on that later) at between US$20-25 million. That’s assuming that the power issues at the Windsor chrome plants have been resolved and chrome prices remain at the current level.

The PGM target of 42,000 PGM oz is (I assume) just from Inyoni and with the potential for a further 10,000 PGM oz from the recently announced chrome contract there is the potential for further ounces potentially using the JV. If the new chrome plant on the eastern limb gets going soon there is also the potential for that to contribute to the current financial year as well as significantly reducing PGM transport costs.

One thing that confuses me is the addition of capitalisation costs to the copper production costs starting in H2 FY2023. I’m certainly not an accountant but I know we have at least one qualified accountant as a regular contributor here, maybe they can offer some insight into how the capitalisation costs will affect production costs as copper production ramps up?

There is also the fixed charge to secure power at Sable which was US$300 / tonne in H1 FY2023, I assume that this is a recurring cost rather than a one off. At 10,000 tonnes annual production that should drop down to about US$50 / tonne.

Rather than responding to him just hit the report post button, lower right of each post…. I report every single one of his posts as trolling.

I’ve noticed over the last 3-4 days there has been an unusual trading pattern with lots of small buys, it looks like there’s a big buy order in which is being accumulated in small amounts. Yesterday looks like an attempt to shake a few more free.

The big sell, which appears to have been designed to shake the tree, was bought back again after hours last night… don’t fall for it!

We all know there are only two reasons people like you post on these boards:

1. You like to troll, in which case, get fecked.

2. You think you can affect the share price by posting vague rubbish with no reasearch, in which case I refer you to point one.

Do you honestly think your vacuous posts are going to have any effect on the share price? Maybe like your pal Bushytailed you think you have some special power to make people sell at will? The market will do what it will do and nobody including you or me has the power to change it.

I’ve been buying today because I continue to see the future value in the company, as do the Institutional Investors who have been adding. If you disagree with the professional investors then maybe you should look elsewhere… bitcoin maybe.

You've used that line before Scott. Is it really that difficult to see what might turn it around? Here's a hint:

Increased Chrome and PGM production ✓

Increased chrome earnings margin ✓

Copper production increasing ✓

Cobalt hydroxide is production ready when price increases ✓

Closing out the Northern Refinery deal in Zambia

Potential deal to process the Mufulira S l a g project, the highest copper / cobalt grade project in Zambia

Building the Eastern Limb chrome plant when permits granted

Completing the PGM facility on the Eastern Limb

That should do to be getting on with.

The irony of BT telling everyone to learn how metals are processed! Maybe he thinks you can just order a team of metallurgists and chemical engineers from Alibaba as well? Jubilee is in the top three chrome producers in South Africa and thats without owning or operating a mine or the associated mine costs. Sylvania are in the lowest quartile of the cost curve for PGM production… well guess what, Jubilee are even lower because of all that chrome, fine chrome and ultra fine chrome.