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Every $100 rise in Gold is an additional $2.5m straight to the bottom line at 25,000 Oz per year. Typical Gold bull run as political tensions rise and fiscal policies become strained.

https://twitter.com/KitcoNewsNOW/status/1140378661792542721/photo/1

Without stating the obvious the only objective of the processing part of a mining operation is to produce a high grade concentrate that goes to the smelters. The higher the grade of feed ore the less processing that is required and thus the lower the processing costs. In theory if the ore is of a sufficient high % then no seperation is required, just crushing and grinding - CB thinks this is 30% by the way.
Kabwe can process zinc ore without any additional high grade ore but it's a bit like running a car on 4 flat tyres - it will work but its just not very efficient. Leon, his Chemists and Ops people will work out the correct ratios to maximise returns and this is where the quantity of third party ore will be decided.
3rd party ore is absolutely standard across the industry with standard contracts in place. Ore and concentrates are regulary sampled (that is also how the BMR royalty will work) and the payments to the third party.
The below link explains the whole concept in a pretty straight forward way - if it does not work search for "introduction to lead and zinc smelting business - nyrstar"

https://www.nyrstar.com/~/media/Files/N/Nyrstar/results.../zincleadsmelting.pdf

Vanadium looks like it has turned a corner. An incredibly valuable asset if it can be firmed up - let's see what the future of the drill results shows us.

Well what a strange RNS that was - you don't usually get an RNS informing us of what is already known (although a much better summary) or one that informs of news/political instability around the world.

Certainly not a pump and dump as suggested below - CB owns too large a proportion of the company and he will not be dumping so that does not make sense.

Issuing an RNS doesn't make potential byers inteerested or not - so that is an irrelevance. So, in my view that leaves only 3 possibilities:
1) CB & GLR have suddenly decided to get news flow moving to increase the momentum in GLR to increase the SP - bearing in mind what is most likely to come at Star Zinc and also a rising gold price for our lesser know asset.
2) GLR need to get the SP moving because getting a decent price for Gelnover at the current SP is difficult - which means they are actively speaking to potential buyers.
3) GLR need to get the SP moving because a rights issue is on the horizon - I think they are OK until early next year unless they need to spend money to supply Star Zinc - see my earlier posts on this and very much depends upon how a deal is structured and if they use contracted mining (which I am sure they will).

Can't think of anything out of the ordinary at the AGM, nothing has been mentioned. Anything contentious is usually notified to the markets before hand.

Nice to finally see a few blue days !! Gold at over $1,300 / Oz and the £/$ at 1.27 all help to put that little bit of extra shine to the margins.

TBTT - I would be very suprised if there was much difference in the Chrome content of the Chrome concentrate. The feedstock to the mill has little impact upon the % of the mineral in the concentrate. E.g. Gold mined at 1.7g/T or 10g/T will not affect the gold in the concentrate i.e. usually 100g per bag. The higher the grade going in just means less waste rock and thus a much cheaper processing operation - less to crush, grind and leach to give the same mineral % in the concentrate.

For DCM the tailings have already been crushed and ground and we are now dealing with the 30% of Chrome that has got away - hence fine chrome. It is not a direct like for like since I do not know the condition of the tailings - e.g. for Coarse they may be largely Dry tailings whereas for Fine they may be largely Wet tailings - both will lead to different processes for extraction and thus different costs for processing. Since JM do not routinely split them out we may only find out the cost comparison from either a comment in an RNS or until the earnings are shared - thus all Capx costs have been paid off from earnings and as such we can work out the Revenue in that time and the approxiamte costs to give earnings to pay off the debt.

I do remember that DCM tailings are 20% corace Chrome and 60% Fine Chrome with the remainder PGMS's and waste material. JM have gone on record to state that the final material will be amongst the highest grade PGM in the world so expect a PGM operation in maybe 2021 once the permits have cleared and the "refined" stockpiles are formed. The coarse Chrome plant from DCM is seperate from the fine Chrome plant so we now have a coarse Chrome plant awaiting a project at minimal CapX. This will be a running theme with JM and will enhance margins in the future years.

£29m next calander year in my model Bobbill, plus a mere £19m for Kabwe !! Your number is probably right as earnings always fail to deliver to plan particulary on new projects.

I am forecasting a profit after tax in the 2019/2020 Financial Year of about £16m - time will tell if I am right or wrong.

34Deg, good summary. I agree with your general principle and what is interesting in the earnings margin of the Chrome business. Even at £3,117k of revenue and £1,309k of margin it comes in at a very healthy 42%

Taking your numbers DCM FC would have had a Revenue of £346k in Q1 giving Platcro CC a revenue of £2,771k. I agree that DCM FC would have ran at a loss in Q1 and using your number of £240k means that Platchro CC would have generated earnings of £1,549k in Q1. So Platchro CC would have an earnings margin of 56% !!

So the earnings margin is potentially much greater thanh originally thought and gives a good indication of the net earnings margin for the Chrome business once DCM and Platchro are both runnning at full tilt.

Maybe it's a case of the value of the stockpiles is not sufficient to build a large scale processing plant. Not sure how firmed up the underground resources are. In that case the Ore needs transporting to an existing processing plant and I have no idea where the closest plant is - anybody???

I doubt Jubilee would treat it as a tailings project - too many elements to break out that is not part of their expertise. So it's a case of shipping the Ore to a processing plant or the underground resource are very good and it's worth mining and building a processing plant.

Answers on a postcard anyone ?!?

So the question is what is the catch?? REE have increased in price massively over the last few years so I get that Glenover is a much more tantalising offer than it was 3-4 years ago.

I hadn't placed much emphasis on the REE's but MM reminded me of the values so I thought I would very quickly calculate it. The values are slightly fightening so I really need somebody to do a cross check for me.

Go to pages 62 & 64 of the 2012 Geological report for Glenover, this gives the 4 rock ore types and then the split of REE's. The %'s are reasonably similar across the rock types so I have just used Apatite Breccia. La2O3, CeO2, Nd2O3 & Pr6O11 make up almost 90% of the REE basket so I have just used these for simplicity. Taking the %'s of these 4, Glenover stockpiled ore has a basket price of $27,000 per Tonne and that's conservative.

Using 70% of the 35,588T of REE to allow for recovery rates etc then this gives a number of $960m of stockpiled ore.

Somebody please check these figures - but these numbers are frightening if true. I did a check against Lynas corporation who's REE basket price /T is $19,000 and even that gives a $498m stockpiled resource. No mining risk with stock piles so it could equate to a sale value of £30-£50m. Maybe I have missed a decimal place somewhere whilst rushing but I cannot see where that is.

The big question is - if these numbers are correct what is holding back a sale, surely it should be a no brainer for somebody to buy it and it should be a priority for CB - so where is the catch ?

Hi DM, looks like you had the problem bequest of all explorers - buy early and it's dilution after diliution after dilution - I have had a few of them myself !!

Galantas is now out of the exploration and planning stage and is now into the mining phase. That means the risk side is very low but the reward side is very high. At 25,00 Oz per year the EPS is almost a half of the sp and with the increasing gold price it could turn out to be as high as half. After that it's a move to 50,000 Oz and increasing the resources. At these prices it's a bit of a no brainer really.

Of course this is Aim so if you intend to buy in and get out in 6 months then the sp could be anywhere !!

Have a look at Ross Beaty - he is one of the largest shareholders in Galantas and an incredibly succesful investor who is very picky where he invests. In fact outside of his own companies I think he was only invested in 5 other companies and one of those was Dalradian so that is a good plus point.

Gold looks to have broken through its range and heading upwards as the Trump/China trade war intensifies so for me it is looking very good.

Hernic - Where there is waste at no value to others / a liability then there is always a deal to be done !! I would be amazed if a Hernic Fine Chrome plant is not completed after Platchro fine chrome is completed.

Very true MH on the fine Chrome side. Often overlooked with about £120 per tonne of revenue but I think JM are after about 100,000T of concentrate per year or £12m of revenue. Not sure about the final margin but circa 30% has been quoted so £3.6m per annum. Earnings share at 50:50 after CapX is paid off maybe in late 2020.

Add into the mix that the technology will go into Platchro and Hernic maybe in 2021 (my view) and it is a very valuable part of the business. It is only a matter of time before JM put the fine chrome plants into other major mines as well.

All going nicely to plan.

V will cost more than PGM to get to production but is vastly more profitable. I very much doubt JAN will take it that far. The asset will be sold which is good for all.

Hi DS - It mentions the resource body having a potential for 400MT but because it is not firmed up it does not use the number in its table. I have used 1/10th of this.

I have used 2 prices to give a guide, one is above current price and one below. The market is overshooting on the downside for Vanadium at the moment. It will recover (IMO). Much lower and it's uneconomical to mine for many companies which is not the price point that the market needs.

All my opinions of course - there are many that feel that the V price will head way above $50/Kg - only time will tell.

I thought i would have a play with some silly numbers this afternoon just for fun. So I plugged JAN's Vanadium resource into my NPV model. Very crude, I used BMN's numbers to give me the GM's / costs etc.

I only used 1/10th of the resource figures in the Brandon Hill report, I didn't have enough patience to extend the model for the full LOM and I used a 10,000T of V2O5 per year from year 5 - no small undertaking by the way. CapX I estimated at $500m with an ongoing Opex of $45m in the first 3 years and then $5m thereafter. I used a 10% discount rate and a 25 yr LOM (LOM is much much longer but the discount factor rapidly reduces the NPV after 25 years anyway).

The NPV came in at $1.1Bn with a 5-6 year return. I used a $40,000/T sales price, if I drop it to $30,000 the NPV is $750m. I didn't do the IRR.

Purely for fun but interesting numbers. Asset sales prices would be 1-2% of the NPV. Personally I think V prices need to be $40/Kg to make it really interesting but that is purely my personal opinion.

Let's hope this is the case and those 300m of drills and 72 samples are replicated across the whole area or at least 1/10 of it - we can but hope !!

For any V experts - It's just for fun so I have not taken much reagrds for V / V205 / Flake %'s etc etc. which I know has a bearing.

I think that is conclusion that we are reaching Swizz, many might not agree yet but once the dust settles and the carnage subsides it is an interesting story again with cash in the bank.

Uni - interesting background on JP and his team. I like a team with a proven track record and they have that in bundles. Those 25m shares might look like a good investement in the future. Do you know if the structure of those deals was through equity or cash? If cash then how was the money returned to shareholders? I will do some research myself if you don't know and see what I can find.

Who knows, JP and his contacts might even have a home for a Vanadium asset !

Couldn't find anything on that Quindell, I looked last night. However I am not saying that it is not the case, the JAN guys like most on AIM own so many offshore investement companies it is virtually impossible to decipher. But again, it's one thing owning shares it's another getting the money out. So even if they owned a % of ValOre they would need a special dividend to get the money out - fees are just not going to cut it.

Part 2

So now lets assume that the board are startegic or greedy - I don't really care which as long as I get a return.

Concert Party (mates club) owns 60% and they naturally want to get the highest return going. They can only get a return in 3 ways - a dividend through earnings, sell the company or sell the assets and pay a special dividend. Salaries are just not that exciting even they way they have all set up their tax free enterprises.

Assume the Vanadium asset looks good, the price will recover from it's lows and it is a potential metal of the future. If I am a Vanadium comapny looking to purchase I don't want PGM's, but then again neither really do the board, the returns are poor. I can sell the Vanadium as is for a low price or sell the PGM side, use the money and firm up the Vanadium resource knowing I have strong interest in the market and I can sell it for many times the value of the PGM business. If the PGM business does work, OK we have an interest in it and thus a hedge for the future along with a speculative Uranium play.

So the deal and timing for the PGM does look like madness - in my experience that either means it is madness or there is an ulterior motive. When the board own 60% their is a strong vested interest so I am going to go against my usual instict of madness and think that maybe there is more to this.

Just some thoughts for discussion. I could bash JAN all day for what they have done but I am hoping there is a flip side to it. Does not take away from the fact that the timing is terrible, the communication and "leading" on has been terrible. But I am a realist and know that the timings and expectations of a PI are usually very different from those of a Company.