Member Info for TigerByTheTail

I am wondering if all is well with Jubilee's Kabwe tailings asset. (Note: I don't mean Jubilee's Sable plant, just the mountain of tailings at the old Kabwe mine that Jubilee obtained from BMR).
Over the past few months we have learnt:
1. That Sable will also produce copper, even though it was bought to produce zinc, lead, and vanadium. (Indeed, the first copper has already been produced).
2. That plans for a vanadium line have been shelved. (Note: the Kabwe tailings are very rich in vanadium, the Star Zinc willemite ore is not. Officially, this is due to soft vanadium prices, but this explanation doesn't quite convince me).
3. That plans for the lead line have been pushed out to 2021. (Again, the Kabwe tailings are rich in lead, the Star Zinc ore is not).
4. Also, we have had no news about the conversion of the BMR holding in Kabwe into the planned royalty. In fact, we have had a total news blackout from BMR and from Jubilee about BMR for some time.
From these facts, I sense that there is an obstacle preventing Jubilee from processing the Kabwe tailings through the Sable plant. I don't think it is technical - the acid-leach process is well understood. Rather, I sense it is either legal or bureaucratic. Has somebody brought a lawsuit against the directors of BMR over the sale of Kabwe? Is there some kind of injunction in place? Are there problems with the licence that covers the tailings? Are there unresolved environmental issues?
I've sold out of Jubilee for the time being due to these concerns, even though the PGMs part of their operations must be generating a lot of cash right now.
For Galileo, this is potentially good news. The zinc line at Sable is due to complete in Q2 2020. If my suspicions are right, then they will need a source of high grade willemite zinc ore to feed the plant, not in addition to the Kabwe tailings, but instead of them. I believe this can only come from GLR's Star Zinc; I don't think anybody else mines willemite zinc in Zambia.
Does this make sense, or am I adding 2 + 2 together and making 5, or even 22?

This is a summary of Johnson Matthey's latest report on the state of the platinum, palladium and rhodium markets. Highly recommended background reading.
https://www.kitco.com/news/2020-02-12/Palladium-deficit-expected-to-widen-in-2020-Johnson-Matthey.html

This is a summary of Johnson Matthey's latest report on the state of the platinum, palladium and rhodium markets. Highly recommended background reading.
https://www.kitco.com/news/2020-02-12/Palladium-deficit-expected-to-widen-in-2020-Johnson-Matthey.html

Hi Mike!
Just remember, mining sector average P/E = about 13.
Typical P/E for an African miner - 5 to 10.
So how much for an established, profitable, long life, cash rich, dividend paying South African PGM producer? SLP has got to be worth a P/E of 8, hasn't it?
Now wait for the interims due on Monday and see what the actual P/E of the six months up to 31st December was. And then remember that since then palladium and rhodium prices have jumped some more.
IMO, SLP still has a very long way to go before it is correctly valued. This share pretty much proves Simon Thompson's point that markets are not all that efficient, especially when it comes to valuing smaller companies.

I don't think South Africa is toxic. Difficult, yes. But no worse than that.
It's strange to me how people will put money in gold mining companies that operate in Russia / Ukraine / Mali / Burkino Faso / Azerbaijan / Tanzania and so on, but not in a South African one. At least as regards South Africa, Russia, Ukraine, Azerbaijan and Tanzania I do know well of what I speak. And, IMO, South Africa is BY FAR the safest investment option of those countries.

HUM could easily afford a dividend. A final dividend yielding 1% would only cost the company about $1m at the current share price - that's really very little given HUM's cash flows.
There are a lot of funds / investors who will only put money into companies that pay a dividend. So even a small initial divi would be worth announcing.

My take on it is that Hummingbird is trading at a substantial discount because the market simply doesn't trust the company to deliver on its promises.
Hummingbird just need to deliver guided ounces at guided cost, and perhaps also deliver some Yanfolila exploration success, whilst not wasting any money chasing vain dreams of empire. Announcing a maiden dividend (even if small) along with their audited final results (in May?) would also help.
I'm not a huge fan of this company, as everybody knows. But there is a price for everything, and the current share price here is unreasonably low, even allowing for HUM being a single mine operator in Mali. As long as the gold price doesn't tank, and no bad things happen, I think the share price will look much better here by midsummer.
New Cora results OK. But very deep. What they need is a high grade oxide zone near the surface, that they can dig out and heap leach to make some "starter" money.

PAF seems undervalued to me, given the guided EPS issued recently and other news.
Perhaps the interims will jolt enough people into taking a fresh look at PAF and realising that?

Hi No Excuses!
I see the Windsor chrome / PGM hub (formerly Platcro) as being sustainable in the long run, as it should be able to access new sources of chromite locally (as long as chrome prices recover).
However, I don't see a long run future for Hernic / Inyoni. The current tailings have a fairly short life span, and Samancor (the owner of Hernic) have announced steep production cutbacks across all their mines (29% of production, 40% of their workforce). My belief is that Hernic will top their list for mines to be put on care and maintenance, and it will be shuttered soon.
My own "key" questions regarding JLP are as follows:
1. The recent Platcro/Windsor and Hernic/Inyoni deals have turned JLP into a sizeable chrome producer, as well as a PGM producer. If PGM prices hold up, and chrome prices recover from the depths they are currently in, then JLP will become hugely profitable. But will they? Will Leon's gamble on chrome come off?
2. What is going on with Kabwe? By this I mean the Kabwe dumps material and the small scale mining licence that covers it, and not the Sable plant. The recent RNSs put more and more emphasis on using Sable to process "outside" material (i.e. the copper line, frequent mentions of buying in zinc ore from 3rd party sources (presumably GLR), the abandonment of the vanadium line etc.). I begin to think that there is a problem with Kabwe that we are not being told about, perhaps related to the restored licence, to BMR, or to environmental issues.
3. Tjate has immense potential value, but it requires massive capex to bring into production. Some day a major will buy it, but only when they are confident that PGM prices will stay high for a decade to come. When will that day come? Will it only be if and when hydrogen fuel cells are widely adopted? If so, that's could be a while away.

I just thought I'd post this again at the top of the thread.
www.investorschronicle.co.uk/comment/2020/02/10/exploiting-market-anomalies/ GLA strong buy
IMO, it's a fine article in itself, as well as a strong buy recommendation for SLP. I found the section on EMH very good.

Hi Kalan!
About EUA suspension - not EUZ!
I think we're about to find out that the authorities have put a stop to the blatant lies and hype at EUA. It was too obviously a scam. I hope you're not holding.
FWIW, I speak fluent Russian, know Russia like the back of my hand, and even know the top people at Norilsk Nickel. It was always ludicrous to think Norilsk would pay huge amounts of money to buy an asset in their backyard up in the Kola peninsula. That's just not how business gets done in Russia.

Simon Thomson in the Investors' Chronicle on PGMs and SLP:
https://www.investorschronicle.co.uk/comment/2020/02/10/exploiting-market-anomalies/

Simon Thomson in Investors' Chronicle on PGMs:
https://www.investorschronicle.co.uk/comment/2020/02/10/exploiting-market-anomalies/

Well, I'm glad I bought a couple more tranches this morning first thing! And thanks to Simon Thomson for pointing out the obvious to IC's readers.
SLP still crazily undervalued at these prices, based on any fundamental measurement I know.
Why this share isn't in the 70s or 80s is a mystery to me.

Please compare and discuss:
EUA - 190m pound capitalization; c. 5,000 ounces platinum production p.a.; 1 x overhyped palladium exploration target waiting for licence.
SLP (Sylvania Platinum) - 130m pound capitalisation; $36M in bank (no debts); c. 75,000 ounces existing rhodium, palladium and platinum low cost production per year; very low P/E; 1 x underhyped palladium exploration target (Volspruit) waiting for final licence.
If anybody can convince me why my money should be here and not there, I'll sell up and invest in EUA!

Hi Barna!
I was thinking exactly the same thought as I typed my post as you were typing yours.
I'm tempted to raise this question on the EUA board.

I'm puzzled, and a little concerned, about the disconnect between SLP's fundamentals and its share price.
GIven its mcap, its cash pile (nearly 10p per share), and its incredible current profitability, by all rights this share should be trading far higher than it is.
Is it that investors are worried about South Africa? Is it simply AIM's notorious market inefficiency? Or what?
Russian palladium play EUA is a hyped-up piece of garbage. It has nothing except about 5,000 ounces of platinum production per year, and a pretty laughable palladium exploration play. But it's market cap is 190m pounds - nearly double SLP's. Are many AIM investors really that naive and under-researched?!?

UG 42% chrome concentrate trading at $136/t, according to Metal Bulletin. Same price as Jan 24th - it is essentially flatlining along at the bottom.
Hopefully, prices will improve. But so far Leon's big bet on chrome production is not paying off. (Not that any chrome producer anywhere will be making money at these levels).
PGM prices holding up remarkably well, despite the coronavirus impacting automobile production in China and now South Korea (Hyundai/Kia). See kitco.com for latest figures.

https://www.kitco.com/news/2020-02-05/Endeavour-not-on-Tinder-for-acquisitions-after-dropping-Centamin.html
The path of true love ne'er did run smooth! Really bad use of metaphor by the CEO of Endeavour, IMO.

Hi Bluebelly!
IMO, you've got that 100% wrong. You backed the right horse, and the market is backing the wrong horse.
EUA is a hyped up piece of garbage. I say this as somebody who speaks fluent Russian, and who worked in the Russia for 20 years, and who knows the top people at Norilsk.
It's gobsmacking that EUA is valued the same as the highly profitable SLP and JLP put together. AIM madness strikes again!