Member Info for TigerByTheTail

World Platinum Investment Council touting the wonders of platinum...
www.zerohedge.com/news/2019-07-15/more-precious-metal-how-platinum-improves-our-world

My take on the Xtract Resoures news is that it goes to show that Colin Bird and Leon Coetzer are now deeply interested in obtaining a copper/cobalt tailings project in Zambia, and that they are exploring every opportunity possible.
I think the Xtract Resources deal will turn out to be one that has been rejected for Jubilee (too small, too far away from Kabwe), but which Colin Bird still felt was a profitable enough opportunity for one of his smaller companies.
By the way, the copper that was processed at Sable by Glencore came by rail from its mines in the Congo. But transporting ore over a distance by rail is far cheaper than by truck.

The Tanzanian government effectively threatened Acacia with the loss of its mining licence for North Mara (their best gold mine) on Friday.
Like it or not, Acacia's troubles read across to Shanta. Equally, if Acacia / Barrick did manage to settle their dispute with the Tanzanian government, then Shanta's SP would benefit, I'm sure.
I wouldn't hold my breath on the Tanzanian government refunding the VAT, either. Just being allowed to operate at all in Tanzania is something!

I believe that market rules dictate that Galileo can't publish a Net Present Value (NPV) for Star Zinc as they haven't issued a formal feasibility study. So here is my down and dirty attempt at a NPV. I've tried to be conservative and pessimistic throughout.
Basic Assumptions:
1. Production of 12,000t of contained zinc per year over 6 years for a total of 72,000t (see recent JORC);
2. Receipt of first revenue in July 2020 (should be easily achievable unless there are major delays in the issuing of the small scale mining licence);
3. Assumed zinc price: $2,500 per tonne (about average for last 3 years);
4. Split of revenues with Jubilee (who will process the ore at Sable): 50/50. (It won't be this simple, of course, as there will be a sliding scale according to the quality of the ore delivered, etc.. But I think this is a pretty good number to start);
5. Star Zinc upfront capex and working capital requirement: $2m (I think this is pretty pessimistic, given we are talking about a simple contract mining and contract trucking set-up);
6. Star Zinc running costs per year: $2m (Colin Bird's own figure)
7. Zambian government own 5% share of Star Zinc and GLR 95%;
8. Discount rate applied to NPV: a highly conservative 15%
= NPV (15%) $38.64m (for Galileo's share of Star Zinc project)
= IRR of 203%
Further exploration at both Star Zinc and Ka****u offers considerable upside potential on this basic model, as does Glenover.
Current mcap of Galileo = less than $3m!!!
In short, IMO, AIM has simply mispriced Galileo's shares. And by a lot. Even allowing for the uncertainty of the mining licence grant, and the need to raise money to start operations at Star Zinc, the share price here should be more like 1.5p to 2p right now, rather than 0.5p.
Thoughts / comments, anybody?

Mkango mentioned in this article:
https://www.theafricareport.com/15263/us-china-trade-war-opens-a-market-for-african-rare-earth-suppliers/
The article also mentions Galileo Resources (GLR), which IMO is a good investment, but as a zinc prospect, and NOT because of its rare earth / phosphate deposit at Glenover, which is going nowhere. Inevitably, it also mentions Rainbow (RBW), which has been discussed previously on this board, so I won't bother going through all the negative stuff again.
Mkango currently trading just above cash in hand, which is pretty ridiculous. But there it is.

Hi Bring!
The 26th June 2019 RNS is a JORC compliant resource - albeit only inferred. So that item can be ticked off the small scale mining licence application list, I think.
"Galileo is pleased to announce the completion of an independently reported initial inferred resource estimate ("MRE") in accordance with JORC 2012, for the Company's Zambian Star Zinc project ("the Project") near Lusaka. The MRE reports Inferred zinc resources with reasonable prospects of future economic extraction of approximately 500,000 tonnes at 16% Zinc for 77,000 tonnes of contained metal above a cut off grade of 2% Zinc. This includes approximately 340,000 tonnes at 21% Zinc for 72,000 tonnes of metal above a cut off grade of 8%. The Company has a 95% interest in the Project. The Zambian government holds a 5% interest. "

Hi Juxtapose!
Yes, I think I did read that wrong. The ACAM warrants should only come into play (effectively as a penalty for lost interest) if Jubilee elect to repay the loan early. So much the better. It would have been one hell of a deal "sweetener"!
IMO, the share price action here is mostly normal "churn". Volume is not big, and both those who took part in the last placement, and almost anybody who bought heavily in the last year (such as me) is sitting in decent profit.
By and large, I don't think the wider market has fully realised that Kabwe/Sable is indeed happening, that it will start operations quite soon, and that the revenues from it will be huge. I also don't think the market has realised the full potential of the Platcro chrome / PGMs hub (especially when a fine chrome line is added); and indeed the full implications of the fine chrome process for the wider chrome industry.
In short, AIM is just being sleepy old AIM. Hopefully, it will wake up soon.

Just to finish up the maths:
ACAM are due to receive 108,781,861 warrants exercisable at 2.81p in March 2022.
Based on the current number of shares in issue, this represents about a 6% potential dilution.
As I imagine Jubilee's share price will be far into double figures by then this is indeed a nice "sweetener" for ACAM.

Also, on the subject of "short" project lives...
Platcro is processing fresh chromite ore from local mines, as well as reprocessing tailings.
The Platcro project is effectively open-ended.
(FWIW, I agree about the time restrictions to the DCM and Hernic projects).

Hi Juxtapose!
I think you may have that wrong.
ACAM can't forward sell any shares without issuing a conversion notice on their original loan, and they haven't done that yet. No market maker would touch such an arrangement. Effectively, it would be a naked short.
For now this is just a standard (non-convertible) loan at a (fairly hefty) 12% interest rate. The "sweetener" for ACAM is that they will receive a lot of warrants (3.055m / 2.81p) at 2.81p in March 2022. That should make a nice bonus for them.
Yes, this is not a cheap way for Jubilee to raise capital. But the Kabwe deal is still a very good one - just look at the targeted earnings. I guess the ACAM deal is just what had to be done to get the finance.

Hi Bring!
This is from the Jubilee RNS:
"Jubilee is pleased to announce that the ZCCPC has granted final authorisation for the Acquisition with both Jubilee and Glencore acknowledging that all CPs to the Acquisition have been satisfied. The final administrative process for the Sable Zinc Kabwe refinery handover and share transfer has commenced with the parties agreeing to target completion by the end of July 2019."
As the Star Zinc offtake deal will likely legally be between Sable and the holding company for Star Zinc, I believe it can be announced only when the actually Glencore-Jubilee Sable deal has formally concluded. So, yes, I'm thinking we have a couple of weeks to wait on this.
I would think the small scale mining licence application for Star Zinc will follow very soon after the offtake deal is announced. I assume GLR are working on the paperwork for it already.

Hi Parfett!
Yes, it looks like the Tanzanian government is loading pressure onto Acacia and Barrick to get the deal done as soon as possible.

Damn, forget about this silly website...
That's d i r e c t o r s t a l k . n e t
No spaces, of course.

https://www.*************.net/interview-jubilee-metals-group-adding-to-earnings-while-aggressively-pursuing-further-projects/

Hi TopCatz!
Yes, that thought occurred to me as well. Is the copper refining at Kabwe effectively large scale testwork for the much trailed but not yet announced Zambian copper/cobalt tailings project?
If so, we might get a public announcement of it in the next few months. One thing is for sure, the piles of copper tailings in Zambia are simply massive - they dwarf the tailings of Kabwe, and that was once the world's largest lead mine!

Yes, that's the first of my milestones passed.
The next milestone should be the signing of the offtake agreement between Jubilee and Galileo.
There are still some final legal formalities to complete for Jubilee's Sable deal (due to be inked by the end of July, according to the Jubilee RNS). I would expect the offtake deal to be signed immediately after that . (I assume it has already been negotiated by now!)
Onwards we go. IMO, this share is still massively, ridiculously undervalued...

Excellent RNS.
- Sable deal approved and now formally completing. First production of zinc concentrate and vanadium pentoxide should be in December.
- Fine chrome process at DCM working well. Expect rollout of process to Platcro and Hernic soon.
- Slight delay on PGM production from Eland (Platcro PGMs), but first saleable PGM concentrate should be produced in August.
That's really not too shoddy!

Just to add how modest my 2p target is:
434m shares currently in issue;
Allow for 20% dilution to raise sufficient finance for start-up of contract mining operation (ballpark figure) = 527 million shares in issue
527m x 2p share price = mcap of 10.54m GBP.
This for a company mining 72,000 tonnes plus of zinc at a very low cost over a six year period, with a lot of unexplored resource potential to extend "mine life"!
As long as the Zambian government doesn't delay issuing the small scale mining licence for Star Zinc, I make the maths pretty compelling.

Hi BMR!
I'm going for an immediate target of 2p by the end of the year - that's already more than a three bagger!
I can see two things that would slow any rise above that down in the middle term:
1. There are 50m warrants at 2p expiring on 12/4/20;
2. BMR can sell 25% of their shares at the end of the year, and the other 75% by June 30th next year. Judging by the past experience with Jubilee, BMR will dump those shares on the market as soon as they are able to.
Neither of these obstacles are unsurmountable, but they will slow any rise down. I'll reassess if and when we get nearer to my target price.
Good luck with getting some money out of Borelli for the longsuffering shareholders of BMR!

I just doubled my holding here.
After last night's and this morning's RNSs it seems to me that both sides (and their highly paid advisors) recognise the necessity of concluding this deal.
The current Barrick offer is worth 197p at today's prices - almost 10% above Acacia's current share price. My guess is that the final agreed price will be less than the 271p Acacia want, and around Barrick's book price for Acacia (244p, I think).
So there is plenty of upside here from the 181p I just paid. Set against this, is the downside risk that the takeover talks fail (not necessarily negative in the long run, but leading to a whole new world of maybes in the short term), and also the risk that the price of gold and Barrick's share price fall dramatically over the next 10 days or so (unlikely, methinks).
Hopefully, I haven't completely miscalculated!