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I haven’t looked in detail at Sylvania’s operations but from what I can see they don’t currently generate earnings from chrome so I’m assuming that all chrome produced is kept by the host mine company and they get to keep the PGM rich feed. The new agreement is a 50:50 JV for both PGM’s and chrome, so I guess, like Jubilee they are looking to get more exposure to the chrome market to offset the drop in the PGM basket.

If it is the case that they don’t currently generate any earnings from chrome (please correct me if you know different) then they are going to be hit harder than Jubilee by the drop in PGM basket price because they are not benefiting from the current strong chrome prices.

“Fastmarkets’ weekly chrome ore, South Africa UG2/MG concentrates index, cif China was $286 per tonne on Tuesday August 1, up by $1 per tonne (0.35%) from a week earlier.

“I’ve heard that the latest offer in the seaborne market is no less than $290 per tonne after the stimulus was announced,” a Chinese chrome ore buyer source said on Tuesday.”

Thanks Jonah,

My take from those graphs is that the value put on Jubilee's current PGM / Chrome operations is about 5-6p, with only 1-2p attributed to copper and cobalt. We already know that Roan & Sable are producing at least 520 tonnes / month of copper, which should mean total earnings of approximately double PGM / chrome alone. That's before factoring in the increased chrome earnings (at a much higher margin) and increased PGM ounces from the recently announced contract.

For those reasons I think a fair value in the near term should be closer to 10-12 pence. That's before the new chrome plant on the Eastern Limb which will have the dual benefits of increased PGM / chrome production and also reduced transport costs which will improve the PGM margin significantly. If they get this Northern Refinery deal in Zambia over the line then I can see the share price increasing significantly from there. That's before factoring in anything for cobalt which hopefully will come into play by next year if not sooner.

If you're in it for the long term then for my money it's a strong buy at these kind of levels. All in my opinion of course.

I thought it might be useful to compare the share price performance of SLP, a pure PGM / Chrome producer, with that of JLP:

https://tinyurl.com/yvwb9vv4

I've overlayed the estimated JLP PGM basket price on both. You can see that with SLP the share price tracks the PGM basket very closely up until the end of 2022, when they had some positive news which lifted the share price. I've extrapolated what the share price would likely have looked like without that news and you can see it continues to follow the PGM basket.

Looking at the same graph for JLP, the share price started to drop following the PGM peak but then recovered somewhat when the Mopani MoU was announced. It then continued to drop with the PGM basket but maintaining a small positive offset of 1-2 pence. I think this is probably the contribution of copper and cobalt to the share price.

I’m wondering if Stargate is a BOT account that harvests data from the internet, I’ve seen similar before on this site. The account is just page after page of similar chartist stuff. I’ve reported the account anyway.

I should say Mopani also has the capacity to refine cobalt but Chambishi Metals was the only refinery registered with the LME producing ‘A grade’ cobalt metal.

Https://www.fastmarkets.com/insights/cobalt-market-outlook-five-key-factors

This is worth a read if you want to understand a bit more about projected future cobalt demand. The price forecast towards the end shows an increase starting next year and steadily building over the coming few years. Perversely, we don’t want to see a massive increase in price because that is likely to drive the development of other battery chemistries which use less or no cobalt. Just look what happened to rhodium when the price got unsustainably high. Anyway the growth of Indonesian cobalt production is likely to keep prices under control.

Point number three is an interesting one, the development of cobalt refining capacity outside of China. The only cobalt refinery in the region which can produce 99.9% pure cobalt metal is…. You guessed it, Chambishi Metals.

I think Donkey is on very shaky ground. Yes, he’s a Wonky Donkey 🫏

Those licenses have nothing to do with the JV, they are the Zambezi ones further south west.

You’ve overreached yourself there ac123,

Your timeline is well off if you think AA should have been drilling half a decade ago when the first significant mineralisation wasn’t found until 2019 and we weren’t even in talks with them officially until 2020…. Something stinks and I regret to inform you that you’re the source.

I’ve been deliberately staying away from here as there’s not much to say until we get some news but thought I’d point out that the Anglo Exploration license application has vanished from Zaco. Usually when a mining license is granted then all other applications fall away….

That is all :-)

Nothing much was made of it in the last update but copper production tripled from Q3 to Q4, with an average production for Q4 of 520 tonnes / month. This is pretty much where Leon said Roan should be at by that stage, with production set to reach 700-800 tonnes / month post year end. This sets a new baseline for production which investors clearly haven't picked up on yet. Of course we don't know the impact of the upgrade on the next couple of quarters but the baseline has been set and things should only get better once the upgrade has been completed.

With regards to chrome, prices are still holding up very well, actually increasing this week to US$286-290 / tonne for 40-42% chrome concentrate.

These are the two revenue streams which will drive earnings in the short term and production of both is increasing. Investors are too focused (in my opinion) on PGM's because that has been the main earnings source up until now. PGM's time might well come again but not at the moment.

Just make sure you use the ‘report post’ link in the bottom right of every post… best way to clear out the trash is for everyone to report it. If they get reported often enough they will get suspended, or in the best case the account will be deleted. I’ve managed to get a couple of them completely removed in the past… small victories :-)

Do you not think if the Market Makers wanted to communicate with each other they would be more likely to just pick up the phone? Or have their own WhatsApp group? Maybe they’d rather just put their intentions out there in the open for those ‘in the know’ eh?

Mikie, I understood that they should have been able to produce up to 125 tonnes / month of cobalt metal independent of copper production by the end of May.

Maximus the guidance was that they had stopped production pending a higher cobalt price. As they haven’t given any further guidance I presume this still stands, especially as the price now is slightly lower than when they stopped production. Time will tell though.

Sable shouldn’t be totally idle (in theory) even if Roan has to halt production, there’s still the third party ROM delivered direct to Sable for leeching. Leon said during the dry season that could be the equivalent of 100-200 tonnes Cu / month.

Mikie, I was wondering about that myself. I guess it depends on the ability of Roan to keep operating during the upgrade. During the Analyst's Call on 20th March Leon was asked about the cobalt price at which they would be looking to upscale production and he said they had a target of US$37,000-38,000 / tonne to be sure that there was a real upturn in demand rather than a one off order. He also said they were still producing cobalt at that point, the metal price at that time was US$33,900. In the Company Update RNS on 24th April he stated that cobalt production had been halted pending better prices... the metal price at that time had gone up to US$34,600!

As Leon has said the LME price is not necessarily a reliable indicator of the cobalt hydroxide price which is more order driven, also the payable percentage is another unknown. It's difficult to know exactly at what point they might decide to restart production but I guess if Roan has to be shut down during the upgrade then it might happen... assuming they can make money doing it.

Gotreal, yes I think it shows quite well how investors are still focused on the PGM prices and in particular the rhodium price. The funny thing is that rhodium is now contributing less to the basket than platinum is so if anything they should be looking at the platinum price! Here's an updated plot with more dates, I can't display regular intervals because there's no data for the weekends which throws the numbers off a bit. https://tinyurl.com/4fpa8zrt

Here's the quarterly price summary with PGM basket included: https://tinyurl.com/43mu3scf

If you compare the numbers with those quoted for Amplats you will see that they are almost the same, which is a bit surprising considering the PGM split is quite different to Jubilee's.

Here are some comparisons I did quite a while back, comparing the PGM split quoted in the WH Ireland note (which I use for my calculations) with known data for mines on:

the Western Limb: https://tinyurl.com/ywckeezh and

the Eastern Limb: https://tinyurl.com/5fz2vnyh

The PGM split quoted by WH Ireland is almost identical to the Tharisa Mine, which is just down the road (30km) from Inyoni, which gave me confidence in using those numbers, although I've tweaked them a bit to get my calculations to match with the actual numbers in the RNS's. You can also see that in general the platinum / palladium content is much more even on the eastern limb and the average agrees very closely with the Amplats average.

Dorf, you are certainly better placed than me to understand what's going on in South Africa, I'd agree that if power issues start to affect production then it could very quickly trigger a rally in PGM prices. Here is a quarterly summary of prices that I made from my spreadsheet, some might find it useful in trying to gauge earnings:

https://tinyurl.com/2p8vtf7y

Platinum and rhodium are the two key elements when it comes to the PGM basket with platinum making up about 60% of the ounces produced and rhodium due to its price. You can see that platinum has traded in a fairly narrow range for the last few years whereas rhodium has varied dramatically. The recent big sell off of rhodium has severely impacted the PGM basket, but there are signs that it has reached the bottom and buyers are starting to return... has it been oversold? Time will tell.

With the PGM basket at current levels we will probably be earning more from chrome than PGM’s so it definitely makes sense to be aiming to capture more of the value in the chrome output. The construction of the chrome plant on the eastern limb should greatly improve the profitability of the PGM’s too, with reduced transport costs bringing tailings from the eastern limb to Inyoni for processing. If you look at the figures from H1 FY2023 the transport costs were US$198 / PGM ounce. That equates to US$3.6 million in H1 or US$7.2 million for the year! So building that chrome plant will bring both increased capacity for chrome / PGM’s and also massively reduced transport costs.