Jubilee Metals Share Discussion Threads

[sleveen] 07/8/2019 18:41

and one final thing from note 14 inventories:

"During 2018 £ 1 036 298 (2017: £ nil) was recognised as an expense for inventories carried at net realisable value. This is recognised in cost of sales.

----> so the asset value of inventory fell by £1m in 2018


and note 2 in the Chrome section in Monday's update:

2 = Project earnings include project expenditure on plant and equipment as well as negative stock value adjustments for FY2019 applying metal prices as at the end of FY2019. It also includes all incurred operational costs and management services costs


-----> the missing million value includes reduced valuation of the PGM material (as happened in 2018), equipment and all incurred operational costs, which strongly suggests to me that the $1.2m transportation costs incurred will be treated in the P&L as a CASH cost for 2019. That's the cleanest way of treating it IMHO.

[1madmarky] 07/8/2019 18:17

Thanks sleveen,
I think even I get it. ... So basically nothing to worry about by October should have the money plus profit in the bank.

[sleveen] 07/8/2019 18:17

For the full story:

Goldibucks7 Aug '19 - 15:30 - 13431 of 13452

“August is an inflection point because it is the start of JLP doubling it's earnings thanks to Windsor PGM's.“

Will they though? 85% of Hernic has to be shared at some point, DCM is loss making, and PlatCro Chrome made just £267k in Q2 19. You could have a scenario where H1 earnisleveen7 Aug '19 - 16:06 - 13434 of 13452

Listen at 54 mins re PlatCro, working capital costs of tranngs are shot to pieces as PlatCro PGMs is ramping up. Then it’s a case of can PlatCro PGMs make up the slack let alone increase H1 earnings.

It’s all about Kabwe now but as we saw when the license got temporarily revoked, the issues Glencore and Vedanta had with the Zambian government, and the high 35%-40% tax rates for miners and processors in Zambia, it’s not the easiest country to make after tax distributable profits in.


sleveen7 Aug '19 - 16:22 - 13439 of 13452

Goldi

"85% of Hernic has to be shared at some point"

NO. Hernic will continue until mid 2021 (JLP website), so assuming full production in Q1 2020 that's about 18 months of double PGM production.


"DCM is loss making"

NO. Commercial production was announced in March 2019. Production has improved substantially further to July as announced Monday.

[sleveen] 07/8/2019 18:05

In layman's terms Goldi is correct but only for 2018 accounts.

The MMMM is indeed the $1.2m transport cost as stated by Leon in the Nov 2018.

You're very welcome to post on LSE bb, I'm not a subscriber merely a lurker.

[lostabillion] 07/8/2019 17:57

Sleveen, can you put into layman’s terms so that others can fully understand what you are saying ;-)

[gsg] 07/8/2019 17:47

Thanks for that info sleveen.

[sleveen] 07/8/2019 17:35

Consolidated in to the above post.

[sleveen] 07/8/2019 17:18

Please PM me.

[eblitz1] 07/8/2019 17:01

Sleveen
Can you go on the private BB as I would like us to get in contact
If so please let me know

[sleveen] 07/8/2019 16:57

14. INVENTORIES (Balance sheet 30th June 2018)

Raw materials and consumables are carried at cost. Raw materials represent 400 000 tonnes of PGM material purchased for Jubilee’s PlatCro project at a cost of £1,100,000 plus capitalised costs of £ 90 817 to transport the material to Northam Platinum’s Eland Platinum operation, where the material will be processed.

It is expected that approximately 270 000 tonnes out of an estimated 1 250 000 tonnes at PlatCro will be utilised in over 12 months, which is equal to a stock value of £862,000.

During 2018 £ 1 036 298 (2017: £ nil) was recognised as an expense for inventories carried at net realisable value. This is recognised in cost of sales.


The JLP FY end is 30/6/20xx


---> so some PGM material was transported to Eland at a CASH cost of £91k in FY 2018 (as Goldi states) but this CASH cost was capitalised on the balance sheet in the FY 2018, for amortisation when PGM production commences in 2019 (now cal Q3 2019).

---->as we now know Windsor is about to start production following 200k+ PGM material transported in FY ending 30 June 2019 as stated in the project up date on Monday.

----> Given the annual PGM transportation transportation figure of 270k tonnes that is about equal to the $1.2m in the webcast plus the £91k of PGM material transported in 2018.


Now here's the thing , 200k+ PGM material was transported in FY ending 30/6/2019 hence the magnified missing million mystery (MMMM) is a CASH cost but it may be CAPITALISED in the 2019 accounts and amortised when production starts BUT Leon in the Nov 2018 webcast clearly states @ 54mins that the PGM material will incur a [CASH] cost of $1.2m. Note future tense, now whether this will be accounted for as an asset and capitalised we don't know yet.

Given the MMMM it is likely that is will be treated as a cash cost and not capitalised.

One thing I am sure about is that whatever accounting treatment is used Colin and Leon will be castigated for doing it that way.

[cernunnus] 07/8/2019 16:50

Freedom. Not paniced and sold,still holding. I would have thought you had been around long enough to recognise various price actions, anyway we shall see, hope i am wrong.

[eblitz1] 07/8/2019 16:25

At least we can say this is probably the first time this BB has been constructive
as there is plenty to talk about

[freedom97] 07/8/2019 16:25

I think too many pi's are guessing & speculating on here. Better just to contact Leon and get the facts. Maybe time for Leon to do another webcast to stop all this speculation etc.

[sleveen] 07/8/2019 16:22

Goldi

"85% of Hernic has to be shared at some point"

NO. Hernic will continue until mid 2021 (JLP website), so assuming full production in Q1 2020 that's about 18 months of double PGM production.


"DCM is loss making"

NO. Commercial production was announced in March 2019. Production has improved substantially further to July as announced Monday.


"and PlatCro Chrome made just £267k in Q2 19. You could have a scenario where H1 earnings are shot to pieces as PlatCro PGMs is ramping up. Then it’s a case of can PlatCro PGMs make up the slack let alone increase H1 earnings."


NO. See my previous post above, $1.2m working capital due to transport of material to Eland.

[eblitz1] 07/8/2019 16:21

Goldi
Thanks you have answered one big question,

[eblitz1] 07/8/2019 16:20

Hi All
I'm no accountant but if what freedom is saying is correct and you take into consideration the equipment bought and put in at Hernic and DCM together with the one off costs of wages, it doesn;t seem to be bad at all. It's the bloody presentation that is making people jumpy. As I said I'm not an accountant but if there has been an uplift in chrome and the figures and the power outage at Hernic in the first half of the year, where are the smoke and mirrors. I do get bloody frustrated but when the new PGM come through it SHOULD drop to the bottom line depending on the deal with Northam and then you have the Kabwe Sable deal. I just wish they were more transparent

[goldibucks] 07/8/2019 16:18

“Does that solve the £1m mystery?” No. They add transport costs for PlatCro PGMs to the carrying value of Inventories. See note 4 of the 2018 Annual Report. Transport costs will go through project earnings for PlatCro PGMs when the tailings at Eland get processed.

[freedom97] 07/8/2019 16:12

Why are some saying 'placing'? as if blaming the share price drop on a placing about to hit.

Goldibucks has already said he's sold at least 2m this week, which is what panicked some others to sell, wrongly thinking something bad is happening like a placing! So now that Goldibucks has said he's not planning to sell any more, then selling should slow down and buyers will snap up the bargain shares.

I presume those saying 'placing' are the ones that panicked and sold some of their shares, so now trying to buy them back.

[sleveen] 07/8/2019 16:06

Listen at 54 mins re PlatCro, working capital costs of transporting the 220k tonnes of material to Northam/Eland is $1.2m.

Does that solve the "missing million" mystery?

[frogkid] 07/8/2019 15:35

Well, my patience is running out on this. Always another hurdle.

[goldibucks] 07/8/2019 15:30

“August is an inflection point because it is the start of JLP doubling it's earnings thanks to Windsor PGM's.“

Will they though? 85% of Hernic has to be shared at some point, DCM is loss making, and PlatCro Chrome made just £267k in Q2 19. You could have a scenario where H1 earnings are shot to pieces as PlatCro PGMs is ramping up. Then it’s a case of can PlatCro PGMs make up the slack let alone increase H1 earnings.

It’s all about Kabwe now but as we saw when the license got temporarily revoked, the issues Glencore and Vedanta had with the Zambian government, and the high 35%-40% tax rates for miners and processors in Zambia, it’s not the easiest country to make after tax distributable profits in.

I sold another 400k at 2.97p. Still hold 3m. Not planning to sell any more.