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I happened to notice when I looked at Google Earth that there was a new open pit being established about 3km ESE of Roan. I checked back and it looks like it was commenced around the start of this year. I was wondering if this was the source of the current feed at Roan because they said it was somewhere nearby. Out of curiosity I checked who the license owner is for that area and its ZCCM-IH who hold an exploration license for it but no current mining license is listed. Might be something or it might be nothing!

Somebody is buying Peel Hunt's shares otherwise the SP would have plummeted with that number of shares sold.

Yes Gray, I can certainly understand the lack of confidence given recent history in Zambia. Only another week to the end of June so I expect we should start to get news flow around then. If they can sign a deal for finance of the modules on the back of June's production that would probably go a long way to getting the vote through.

That was supposed to read "c o a r s e r material"!

i guess you could argue that they are holding back the information for fear of ending up in the same situation that happened in south africa, where they developed an industry leading approach but were not able to capitalise on it because the value of the dumps suddenly became apparent and they couldn't afford to buy them. they are clearly pushing ahead to acquire what they can asap before having to come clean on the numbers. let's hope the confidence is well justified!

it's pretty clear that roan overall has not performed in the way they expected it to, at least when processing the co****r material. what's critical though is the performance of the front end module as that is what will be implemented at the lwp and the mine sites. the little information leon has revealed suggests it is working at somewhere close to what was expected but the lack of transparency is frustrating to say the least.

No it's definitely not the Northern tailings dumps, it clearly says from the Nchanga Open Pit which is at Chingola. OB1 is short for Overburden 1. The tailings are at Luanshya and Kitwe.

I don't know if it's been referred to as OB1 in an RNS but Leon has certainly used that name in an interview or investor call. I don't think there's any doubt what the waste dump is, you can even see they have started trucking it away on Google Earth.

https://zumran.com/ob1-operational-site/

That's the key thing with Roan, previously they were processing low grade tailings through the sulphide circuit, as far as I know we have never been told what the throughput was or what the grade was or exactly how much that circuit was producing. In theory the circuit has a capacity of 70,000 tonnes / month but in reality I doubt they were putting anything like that through it. The average revenue / tonne was only US$6,191 because the majority of what they produced was sulphide concentrate.

The new feed is (according to Leon) largely oxides which will be separated and concentrated by the new front end module. Leon claimed ~85% of Roan output would be oxide concentrate so the overall revenue / tonne should be considerably higher, I would guess somewhere closer to US$9,000 / tonne at current prices. That will have a massive impact on the profitability but we still need to understand the cost / tonne. Does the previous guidance of US$5,500 / tonne still hold true?

Surely most of the 'debt' would be cleared by simply stopping the purchase of more RoM and selling off what you have processed. There's no point in buying RoM that you will never get the profits from.

Nobody knows Jonah, because it wasn't included in the RNS. The assumption is that they are going ahead with the deal because they have already sold part of it but that may not necessarily be the case. Maybe the details will be in the circular.

I have a feeling that a lot of things hinge on the production at Roan during June. Leon said this month was an important one in proving that they can successfully process this complex mixed ore. Decent results from that maybe the trigger to agreeing a deal to finance the modules for the LWP and elsewhere.

Drilling at Munkoyo was due to conclude around the end of June / start of July so they should have a pretty good idea of what's down there by then.

PGM basket still steady at around US$1,700 / PGM ounce, however chrome is on the slide again, which takes the edge off it. I guess they will have switched focus from chrome rich RoM to PGM rich RoM a while ago so we should probably expect to see less chrome and more PGM ounces in the H2 numbers.

Dru... I finally tracked down where the Grovenor Resources mine location is. Very probably the Grovenor project. Very interesting location and not just for Jubilee. I'm going to keep it under my hat for now as I think there's value in knowing where it is! 😉

'Is that net profit Seis?"

That's just an extra US$280 margin on each ounce assuming 44,000 ounces. It's likely to be more ounces than that because I'm not assuming anything for the JV. If you add another 5000 ounces from that it would be around US$14m.

Kind of ridiculous to see the SP sliding like this when we are in the best half year for chrome and PGM's in. quite a while.

The overall basket price seems to have levelled off at around US$1,690 / PGM ounce for now. That's about US$280 above the H1 average, which would equate to approximately an additional US$12m over a year. Just to give an indication of what we might be looking at.

Welloilbeefooked, they are not going to be always on the losing side. If the price is stable they it doesn't have an effect, if it falls they lose out, if it rises they gain. Yes looking to reduce exposure to that volatility would certainly be a good thing but I haven't got a clue how much scope there is to do that.

Looking with hindsight I do wonder how the business would have looked now if they hadn't got involved in Zambia and instead had use the cash from the PGM spike to invest in a chrome mine when prices were depressed. We would then have been in a position to fully benefit during the chrome and the PGM cycle. Oh well.

I was under the impression that most of the debt was due to the purchase of RoM and in the H1 numbers the margin was squeezed because they were buying RoM based on a price of over US$300 / tonne and selling for much less. The cost to buy RoM is directly related to the chrome price at the time and there is an approximate 2 month gap between buying and selling. In H2 the average cost to buy RoM should be much less due to that 2 month lag but the sales price will be higher resulting in a better margin.

Wouldn't it seem odd for Jubilee to buy RoM and then sell the business, letting the buyer then take the profits from selling it later? Maybe it would be better to actually wait and see what the truth is before making up your own truth!

Leon said in the interview it would be in the next few weeks. It would make sense to await results from Roan once it's been in steady production for a while.

Dru, I believe the LWP material is being uplifted from this location: -12.489555°, 27.854527°

Using my best Sherlock Holmes skills, I can see that the trucks are going North towards Chililabombwe, so probably not the nearby KCM refinery at Nchanga. I'm thinking this might(?) be where it's going: -12.442100°, 27.892388° (don't quote me on that though!) It's a leaching operation that has recently been constructed and the mineral processing license is owned by a Chinese company.

Not sure about the location you gave co-ordinates for, there are so many little open pit operations in that area!

For those who like such things, I noticed the Roan site has been recently updated in Google Earth and you can now see the completed section of the front end module which was still under construction in the previous image. If nothing else it's nice to see that it is actually producing concentrate!

The area covering the large waste project has also been updated and you can see where they are uplifting material from.

As far as I can see he isn't employed by Jubilee, he's a small fund manager that is invested in Jubilee and with concerns about the recent deal and the way the company is run. The same concerns voiced by many on this board over the last few years.

Anywhere in Africa has risk attached, including Zambia. You could argue that putting all your assets into one county and one commodity increases the risk, it depends how you look at it.

The deal was agreed in principle before the recent rise in PGM's. Leon isn't stupid, if he thinks this changes the overall outlook for the SA business then he and the board will no doubt re-assess it. The whole focus of the business was always PGM's, processing chrome was just a route to get to the PGM's. When prices collapsed they pivoted to processing higher margin chrome as a way to keep the business profitable, but also at a higher risk. The high volatility in chrome prices (down as much as 40% recently, before recovering) and the 2 month delay between buying and selling means you are at risk of loosing your margin and even potentially making a loss. Of course the upside is that all the time Jubilee are stockpiling PGM rich tailings for future processing so should prices recover they are in a much better position. We have to see if the recent rise is sustained and if they feel it makes a material difference to future prospects. You also have to bear in mind that if chrome prices fall significantly then our slim margin get's significantly slimmer.

Do you think the management has been accountable and transparent gotreal? If you do then I think you are in a tiny minority.

And another 687,919,906 bought! That's the majority of the placing done... looks like I'll be buying on Monday!