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Nobody thinks that you idiot. The spike in 2021 was very profitable for all PGM producers including JLP. That kickstarted the entry into Zambia. Relying on one commodity (like gold for example) is a risky business. Jubilee is expanding into a multi commodity, multi jurisdiction company. Buy a cheap disused facility, get it up and running within 18 months…. Repeat. You can’t do that with a mine. To quote our Chairman:

“ I believe that the Jubilee business model is superior to the traditional mining model, where projects have reached absolute levels of design size so large that they take decades and many billions to come to fruition. Internal rates of return are higher, the time taken to first saleable concentrate is shorter and hence the peak funding requirement is lower.”

And thats from someone who has worked for some of the biggest mining companies.

We all know that you sold out of JLP way too early and missed the big payoff, then invested in HUM and watched that price collapse…. If there’s a clown in the room I think we know who it really is :-)

This mornings chrome concentrate price:

www.ferroalloynet.com: South African chrome ore 40-42% concentrate price is 290-295(bulk).

I just saw the Ministry of Mines had put out a reminder about applications from the 70th/71st round that there is a deadline to take action by tomorrow.

https://twitter.com/zambiamines/status/1669345718606397442?s=61

This jogged my memory that there was an application in the 72nd round for a SML on the same application Anglo are applying for (the SML application is an old one from 2019). That application for the SML was listed as deferred (meaning more information was needed) with a deadline of 24/06/2023. Could it be they can’t process the Anglo application until the other one is sorted out? Just a thought.

From the Ministry of Mines website:

“ The Permanent Secretary says, the application process works on an automated first-come first-served basis; hence clients do not need to know anyone working in the Ministry in order for their applications to be processed ahead of others.”

So it’s certainly supposed to be first come first served per each license area but how they process the applications overall is less clear. I can see examples of licenses that were submitted much later than Anglo’s but which have already been granted.

I can’t help thinking that if Anglo had been a bit quicker off the mark in applying for those two extra licenses, things would already be finalised by now. They missed out on one license to Tertiary Minerals and they were lucky that nobody else applied for the other one before they did. Licenses applied for on 21/11/2022 were first in the queue to be processed. Hopefully 32582-HQ-LEL, which was applied for on 23/11/2022 is in the next batch to be dealt with!

I noticed that 32124-HQ-LEL which was applied for on 21/11/2022 is now updated in the Cadastre as active as of 2 days ago.

Drilling typically seems to get going in June, the latest we have drilled from memory was December. Also depends if Anglo want to put in place infrastructure to drill through the rainy season.

Interesting that your first response is negative when they have just acquired such a highly prospective license. The geophysical/geochemical data from arc minerals suggests there is great potential there.

Https://www.ferroalloynet.com/chromeore/analysis-10.html

I had to trawl through the announcements to get the values

Admittedly you would want to see a longer period of time to see if it’s a genuine trend but I’m prepared to take Leon’s word for it (I can’t be bothered to type in any more numbers! 🙂).

I wonder if they also have any plans to renegotiate the current fixed term contracts to get a better cut of the chrome margin? Some of the contracts were coming to the end of their initial period in the next couple of months I believe.

I was interested to see if PGM and Chrome prices do tend to follow opposite trajectories as Leon has stated, so I plotted data for 40-42% chrome concentrate price against PGM basket: https://tinyurl.com/459bxe4y

You can see that they do indeed follow that general trend, so it definitely makes sense to be trying to negotiate contracts where we get a higher cut of the chrome margin to offset any weakness in the PGM price.

Thanks Jonah, I was finding it difficult to keep track of what was going on with the various chrome plants so a summary is helpful. The RNS suggests that the Chrome footprint is expanding so I don’t think they are replacing another contract with the new one, I think this is in addition.

The summary I did says they are uplifting a minimum of 30,000 tonnes / month of tailings from the Eastern Limb to Inyoni and also potentially 16,500 tonnes / month of RoM as well. It would make sense to stop transporting that as soon as they can process it on the Eastern Limb and the new contract could fill that gap nicely. If that is the case then not only would we be benefiting from the increased chrome production and margin but also a massive reduction in transport costs which were last quoted as US$198 / PGM ounce, if you calculate that for 40,000 ounces of PGM’s that’s quite a large number!

Https://tinyurl.com/y39ayk8a

This is an updated summary of the South African operations based on past RNS details.

Thanks for the calculation Chester, as you say without having a detailed breakdown of ore costs and chrome margin it’s hard to make any accurate calculations, that’s something we really need to press them on at the next AGM, the level of reporting detail really needs to be more in line with their peers, they are way behind in that regard.

Having said that the jump from ~4% to ~20% margin is very significant. The company has no control over the basket price but they can mitigate against falling prices by:

1. Increasing production of chrome and therefore PGM’s

2. Increasing the margin paid on chrome price, which is generally stronger when PGM’s are weaker.

I did email Leon directly with some questions about the announcement but (as usual) no response so far. I wanted to know how they were planning to process the extra 10,000 ounces of PGM’s if Inyoni is already at maximum throughput. My guess is that these ounces will replace the material currently trucked from the Eastern Limb, we don’t know exactly how much material is being trucked each month but the transport costs imply it is quite considerable. Could this mean that they expect to start building the new EL chrome plant very soon? The fact that Leon didn’t do any interviews after the last RNS (as Northern pointed out) makes me think another announcement may be imminent….

Charts are very good at predicting the past… not so reliable on predicting the future. They can’t predict when a key RNS is going to land for example. Depends on your timeframe of course, most people who invested here are in because the business model is very compelling and the potential rewards are huge for those patient enough to ride the highs and lows. BT wants to make it all about the here and now because thats all he’s interested in to make a few quid. My timeline is a bit longer and my expected rewards are a lot larger. Each to their own of course but at least be honest about your intentions, nothing any of us say here is going to affect the share price.

Looks like there is appetite for buying again, the sells (presumably the recently taken up options and warrants) are being mopped up.

The numbers you quote bear no relation to reality, a simple read of the RNS will reveal you are nothing but a bare faced liar. You sold out too early in JLP and then invested into HUM… which promptly tanked. What a genius eh?

When are you going to produce the calculations to back up the utter drivel you spout? Even the numbers you quote are wrong.

Scott you do understand that the “brutal downward trend” as you chose to put it, is a direct result of a fall in the PGM basket price? They will benefit again when PGM prices start to turn upward. Other similar companies have had a similar effect on SP but they don’t have the bonus of diversification into copper…. When it becomes apparent that we are delivering copper cathode month after month then it will be reflected in the share price.

Charles, the new agreement is with a mine on the Western Limb, this is in addition to the planned expansion into the Eastern Limb. However I suspect that there will be more announcements to come in a similar vein based on this:

“ As Jubilee looks to expand its chrome and PGM production by entering into new long-term partnership AGREEMENTS, Jubilee intends to position itself as a stronger participant in the revenues from the sale of the produced chrome concentrates.”

I agree that integrating operations directly at the mine sites will cut down on transport costs. With just the PGM rich feed needing to be transported to Inyoni for further processing.

The key thing for me is getting a better balance between exposure to PGM and chrome prices. Leon has said before that the two markets tend to be in opposition to each other so when PGM prices are strong, chrome is weaker and vice-versa. Having more exposure to chrome means that in the end our net PGM earnings / ounce will be less affected by fluctuations in the PGM basket.

I’m not sure what the current price for chrome concentrate is but assuming US$300 / tonne, the initial target of 200,000 tonnes of chrome concentrate / annum at a margin of approximately 20% equates to US$12 million earnings / annum and that’s without including the extra 10,000 PGM ounces / annum…. Not bad for for capital investment of US$8 million!

The thing I’m wondering is, if they now have an increased target of 2 million tonnes of chrome concentrate / year, will they also be looking to increase Inyoni’s processing capacity again? As far as I understand it, we are already at throughput capacity with the current 1.2 million tonnes / year so what will we do with the extra PGM rich feed? Maybe forward planning for when the Eastern limb PGM facility is built, that way nothing has to be trucked from there back to Inyoni for processing.