Member Info for SeisNav

I've been looking at the numbers for chrome to try and understand what the margin might be in future. Here's a little spreadsheet with details from the previous few periods, yellow numbers are from RNS and blue is interpolated / extrapolated:

https://shorturl.at/rJHw7

You can see that costs stepped up from US$61 / tonne in H1FY23 to US$74 / tonne in Q4FY23 and remained reasonably consistent since then. I guess part of this increase was buying material in advance of Thutse starting up. We should probably expect to see another jump in costs in advance of Thutse 2 starting up, so potentially in the next set of results or in Q1FY25.

Revenue is more tricky to understand because the chrome price changed significantly during FY23. I guess the majority of the increase from US$66 / tonne in H1FY23 to US$86 / tonne in Q4FY23 was due to the rise in chrome price, but also Jubilee can change part of their output from tolling to market rate when the price is favourable so that muddies the waters a bit.

I've interpolated the revenue / tonne for Q2FY24 from the Q1 and H1 results and get around US$94-95 / tonne. Chrome price has remained higher since then so there is potential upside to that. The question is how much of a step up can we expect once Thutse 2 comes online? Any thoughts?

I'm surprised we haven't heard anything from Konkola yet, they were drilling in the hanging wall above the target almost 2 months ago and nearby drilling has the hanging wall thickness at a few 100m maximum. It may be that drilling continues to be very slow or they have had some technical issues.

Someone clearly has a large buy order in at 6p, these buys have been going on for a while now. Maybe the remnants of the Munkoyo shares being bought up?

I don't see sentiment impacting anything, it's clear there's plenty of buying going on since Roan completion was announced, most likely from an institution. They are hoovering up shares from somewhere. Meanwhile on the LSE message board....

It's not leaky, it's seriously undervalued.

No. Yes. Yes.

To be clear, I am still very positive on the copper strategy overall, despite the setbacks, the constantly evolving strategy and everything else!

They are already successfully processing material from Munkoyo so we know that this key element has been achieved, they can process oxide and mixed oxide / sulphide material successfully. The unknown is how much can they concentrate that material at source prior to transport to Sable. This is something they have plenty of experience of already from chrome operations and personally I am pretty confident in that aspect. If this one type of processing on its own is successful then that would be a huge win.

Roan is important right now, as the first of these modular concentrators to go into production, but over time I think it will become less important to the overall operation, with the big prize being the small scale mines with much higher grades. That will drive up the copper production at a much faster rate than the low grade waste or tailings can. That will provide the cash flow to develop these lower margin projects.

I think it's important to maintain balanced view of the company, considering the negatives as well as the positives, otherwise you can become blind to the risks. Not everything is rosy in Zambia, that's the reality. There's drought, power shortages (load shedding recently increased to 17 hours a day) and a host of other challenges to overcome. If you ONLY focus on the most optimistic outcome (Mikie) you are not doing yourself or anyone else any favours.

Obviously some people are looking to influence the SP one way or another by what they post but we can't assume that anything which is not favourable to the company is done with malice. People can be frustrated, especially if they are sitting on a significant loss, thats human nature. It's much easier to be positive when you are in profit. In the end we all have to make our own minds up about our investment here, taking into account all the facts.

Having said that Jubilee have overcome many challenges to get to the point where Roan is finally up and running. Loadshedding can be dealt with using backup power (at a cost). They have a local water supply.

Next step is to see what Roan can actually produce from the low grade waste they are processing. Not that long ago Leon was telling us it should ramp up to 1000 tonnes cu / month. More recently he stated 8000-9000 tpa (~700 tonnes / month) depending on grade. That's quite a discrepancy. What I'd like to see going forward is much more clarity on what the feed grade is and what the output is, split into oxide and sulphide concentrates. That would allow investors to better understand how well they are performing against the promises.

The next big target has to be to fully utilise capacity at Sable. In order to do that they are going to need concentrator modules at Projects M and G. What's the timeline for those to be constructed? I hope we get more detail on that in the coming update, hopefully arriving this week.

Chrome has undoubtedly been the star performer over the last 12 months and as Gray rightly says, without the higher chrome prices and the wise move into higher margin production, we would have been struggling. I'm hoping we get to see the full impact of Thutse on the numbers in the next update. With Thutse 2 on the way then maybe investors will start to appreciate the potential there. Having looked at the satellite images for Thutse I can see significant construction going on so I think Thutse 2 will not be too far away from being ready.

I still think PGM's will recover to some degree, due to further attrition in the higher part of the cost curve but when that might happen who can say?

Peggy’s been around for years, he’s a troll, pure and simple. He’s here because he likes to get a rise out of people. The more you respond, the more he likes it. It’s like catnip to him. The best thing you can do is to filter him and deprive him of what he wants. honestly you will soon forget he’s even there.

Https://x.com/NavSeis/status/1824761231187521879

I realise it won't mean much to him but interesting for genuine investors to appreciate where mines and anomalies are located around the Domes region. It's something you won't appreciate just by looking at one project in isolation or by looking at the cadastre....

All deposits and major anomalies are located around the base of the Domes.... for obvious reasons... fluids tend to follow the path of least resistance, ie, downhill. Are Arc's licenses located in the ideal place... you bet they are.

"Over a thousand negative posts on a stock you don't even hold."

That's certainly a lot of posts for anyone but especially for someone who had never posted on ANY exploration companies before he started to target Arc. Odd that isn't it? You would think he might want to shut up and learn something.

Https://miningaim.co.uk/charles-archer-blog/f/whats-anglos-angle-in-zambia

Interesting speculation about Anglo and KCM which potential to impact Jubilee....

You've been banging the same drum for years Summit, what do you expect to achieve? Do you think the board is going to resign en masse because you want a company which is very clearly (to anyone with a brain) in a growth phase to be issuing dividends? It ain't going to happen no matter how much you bleat about it.

Two copper concentrator modules for projects M and G and then in theory, Zambia should be generating good cashflow and be able to stand on its own without relying on South African operations for support. With Thutse 2 imminent then I can easily see South Africa generating north of US$50 million / year in earnings. At that point things should really start to take off.

Of course the first half of that period was before Thutse was fully ramped up too so not fully contributing. For the second half of the year revenue / tonne should be significantly higher because Thutse was contributing for the whole period.

Well the average chrome price for that period was ~US$287 / tonne and it has remained significantly higher since then so I don't see why it shouldn't be higher. Production has also increased significantly and as far as I'm aware there have not been any load shedding issues recently, both of which may help to bring down the cost / tonne.

Weekly chrome concentrate update... slightly up this week, reported at US$310-315/ tonne. Quarterly Average this quarter so far US$313 / tonne compared with previous quarter average of US$309 / tonne.

That’s true Northern but unless they are prepared to pay a premium for ethically sourced product then I don’t see it being economically viable at the current price. I suspect that’s why the Mufulira project has been relegated to the back of the queue, a big part of that was the high grade cobalt in the waste. Also looking at the trials they did with Draslovka, copper recovery from tailings was very good but cobalt recovery was very low… maybe something they can improve but again at the current price, is it worth the effort?

On the positive side, there was news recently of a cobalt sulphate plant in planning for Zambia, presumably in support of the plans for locally produced EV battery manufacturing. That takes the cobalt hydroxide that we could produce and converts it into cobalt sulphate for use in batteries.

Nelson, I don’t see the cobalt price recovering any time soon because the market is being flooded with cheap product from DRC and Indonesia. It could be years before demand catches up with supply with EV take up slower than expected. Any mention of cobalt has disappeared from the website, at least for now.

Hopefully we might see Thutse 2 contribute before the end of this quarter as well, although it's probably wise to build in at least a month delay onto any stated timeline!