Jubilee Metals Share Discussion Threads

[billyboy2fromiii] 27/10/2019 09:01

Hi Bullster,

Interested in your estimated earnings figures.

Have you taken account of the profit share for the Windsor PGMs? My understanding is that we truck the material to them (obviously at our own cost), they process it (for a fixed fee) and the resulting profit is shares with us receiving the majority (split unknown as far as I as aware). I cannot see that you Windsor estimate takes this into account?

Regards, BB2.

[lostabillion] 27/10/2019 05:24

Undertaker, your thoughts on share price movement are similar to mine.

Leon has given us clues which suggest that we could accelerate way beyond 30p.

10p within the next 8 weeks is likely imo with a proper rerate around the middle of next year.

Happy if it takes a bit longer as I remain a firm buyer whilst the share price is in single digits.

Something else to bear in mind is that we have approx £60m worth of PGM’s just sitting there at DCM. That is almost our entire MCap!

Slight spanner in the works is that we are a sitting duck for a takeover.

I too will not be selling a single share prior to hitting 35p and even then I’ll review and continue holding if the company continues to grow at pace.

The business model is easily scaleable and will be implemented in yet to be announced countries around the world as per Leon’s clues, hence my belief that the share price will rise beyond 35p.

[undertaker] 27/10/2019 00:11

Plat - the SASS is an interesting topic... will do some more reading on it.
I'm sure they will close down the benefits in a few years time before I get to take advantage!

I reckon we will be at 10p before the end of this year...20p+ by Dec2020.

And they ain't getting my shares for less than 35p!

[frogkid] 26/10/2019 18:58

This time next year Rodney

[plat hunter] 26/10/2019 18:57

Sorry GFA i meant 2020, which takes us to next christmas

[goingforarun] 26/10/2019 17:47

PH, just to confirm you’re calling 10p for December 2020? Can never figure out yearends!

[plat hunter] 26/10/2019 14:19

I'm basing that on 3.5 times EBITDA with a continued same rate of growt btw

[plat hunter] 26/10/2019 14:17

10p inside 4 weeks of 2019 full year results and 30p by full year 2022

[gsg] 26/10/2019 13:32

Palladium price still potentially explosive.

[mutley walters] 26/10/2019 12:27

I felt sorry for the chap who sold out recently at 3p after 5 years probably ground down by the relentless campaign of trolls like niloc deadaloss trousersnake etc. I would suggest its not to late to take the hit and get back in with a reasonable run of luck we could be way north of 10p in a year or two. I believe the tide has finally turned here

[gsg] 26/10/2019 12:01

Goingforarun. You 're falling behind again. Get those legs and brain pumping.

A game changer for "Hernic", as defined by the broker.

[goingforarun] 26/10/2019 11:19

Surely Kabwe is already a game changer! How many games do we need to be in! LOL

[gsg] 26/10/2019 09:52

1MM. Yes it does point to strategic alliances, which is encouraging.

It would be good to get Bullster's expertise, as to what the potential addition of 8-10ktpa of chrome would do to the overall figures at Hernic.

Currently Jubilee will be carrying the cost of chrome production at Hernic and then handing the chrome back to Samancor. Still a great deal but as the broker note says, getting ownership of the chrome would be a game changer for Hernic.

[lostabillion] 26/10/2019 09:51

Feel free to disagree but I think JLP are heading for MidCap by middle of next year.

[1madmarky] 26/10/2019 09:27

GSG - I'm pretty sure that the deal with Northam is (or certainly was intended as ) part of a wider strategic alliance .

If this is the case, we could see any number of relatively small deals whereby JLP secure feed material to existing infrastructure owned by Northam or Samancor.

[goingforarun] 26/10/2019 08:53

Great if these could be bought out of cash reserves!

[gsg] 26/10/2019 08:42

Great announcement and great broker update.

The key to a further big leap forward at Hernic is the potential deal on the chrome rights, which requires Samancor to sell their ownership.

Surely they must be in detailed negotiations on the chrome, otherwise why put the spotlight on it?

Also the hint in the announcement and broker note that there may be future opportunities between Jubilee and Samancor could be very interesting, and might make SLP a bit twitchy.

[lostabillion] 26/10/2019 07:30

Shard Capital 25/10/19


Jubilee Metals Group
Taking control of Hernic
Jubilee has entered into an agreement with a subsidiary of one of the world’s largest ferrochrome producers “NewCo” to acquire 100% of the rights to PGM earnings from both current and future tailings at Hernic. Additionally, JLP has acquired the rights to a further c.1Mt stockpile of PGM-rich material. A further agreement at Newco’s election could give JLP all chrome rights to the chrome contained in current and future tailings. The deal allows JLP to take full control of the PGMS and removes the previous profit share structure. If the company also acquires the chrome rights, this would be a game changer for the operation.
► Background. Hernic Ferrochrome Pty Ltd was previously the owner of one open pit and two underground mines and four ferrochrome furnaces in South Africa – the operation that provides tailings feed for JLP’s PGM recovery plant. In September 2017, Hernic Ferrochrome entered voluntary Business Rescue, triggered when Mitsubishi, Hernic’s major shareholder and lender did not renew covenants in order to provide a moratorium with regards to repaying the Mitsubishi loans. The Hernic operation remained in production and is being acquired by Samancor (ref: Business Rescue Plan update 23-10-2019), one of the world’s largest ferrochrome producers. The result of this is a termination of the existing tailings agreement with Hernic and a new agreement with NewCo. We believe NewCo (K2018239983 South Africa Pty Ltd) to be a subsidiary of Samancor Chrome Limited, purchaser of the Hernic business.
► 100% PGMS. The agreement allows JLP to acquire 100% of all rights to PGM earnings generated from current and future tailings being processed at JLP’s recovery plant at Hernic. The total consideration for all PGMS contained in historical tailings is $5.1m, settled by JLP’s in cash.
► How is this different from before? Previously, JLP had a co-operation agreement with Hernic Ferrochrome akin to a profit share, whereby JLP retained 100% of earnings, but only until capex is paid back and JLP achieves a 30% return on capital. After this, a profit share kicks in, with 85% to Hernic and 15% to Jubilee meaning that attributable earnings to JLP from Hernic would drop off a cliff after this point. Clearly not ideal given that JLP’s Hernic reprocessing plant has the potential to be a long-life asset. Originally, we did not expect this to happen until 2022 but given the recent high PGM basket prices and efficiencies at Hernic, we understand the 30% return point would be approaching in the next 12 months. Thus, the agreement comes at a prescient point and to be clear, this earnings split is now defunct and JLP will retain all revenue and earnings from PGMS.
► Other benefits. The deal gives JLP full control of tailings re-mining and thus the tailings feed supply at Hernic, mitigating the main risk (consistent supply of material) at the operation. This will give JLP the ability to alter/increase the feed rate as required, not being dependent on the Hernic operation to deliver material. On the back of this, JLP aims to increase the feed rate to 50ktpm from the current average of 42ktpm. Furthermore, we understand that NewCo is likely to start increasing the mining rate at Hernic and JLP will be able to garner more information such as which reef is being mined and prepare the plant accordingly.
► More material. JLP has also acquired the 100% rights to a further 1Mt stockpile of Hernic’s PGM- rich material at surface located close to JLP’s Windsor (PlatCro) chrome operations. This material can be processed immediately at JLP’s Eland plant which JLP is pushing hard to take advantage of current PGM-basket price strength.
► Strong partner. Although JLP’s Hernic operation has been continuing production unabated, having the up-stream operations at Hernic in business rescue created a period of flux. Samancor, the world’s largest ferrochrome producer is a strong partner to underpin Hernic’s future and may also open up further opportunities for JLP.
► Chrome. JLP may also acquire the rights to all chrome contained in current and future tailings at Hernic, at NewCo’s election. This would be highly significant as presently, JLP processes the tailings and returns the chrome to Hernic. Thus, JLP currently incurs the opex for chrome separation but does not receive any chrome revenue. JLP estimates that this could add 8-10ktpa of chrome concentrate production to the group. If this option is implemented, it could also prompt JLP to incorporate its fine chrome recovery technology into the process which further boost chrome production and chrome revenue.
A landmark agreement for JLP which will likely transform the economics of Hernic, boosting revenue and earnings as well as providing significantly more control over tailings feed. We will incorporate the changes into our model once further details are known and republish forecasts once we have received updated guidance on all JLP’s projects. Hernic will be renamed Inyoni.
Market data
Ticker
Price (p/sh) 12m High (p/sh) 12m Low (p/sh) Shares (m)
Mkt Cap (£m) Markets
5.00 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00
Description
JLP 4.15p 4.30p 2.02p 1855.3m 77.1m AIM & JSX
JLP.L
Source: LSE
Jubilee Metals Group plc (“Jubilee or “JLP”) is a Johannesburg and London based mine waste processing and metals recovery company listed on AIM (JLP) and the JSE (JBL). The company has operating assets in South Africa and has recently expanded its footprint to Zambia. www.jubileemetalsgroup.com
Board & key management
Non-Exec Chairman Non-Exec Vice Chair CEO
NED
Technical Director
Colin Bird Dr Phosa Leon Coetzer Christopher Molefe Evan Kirby
Analyst
[e-mail] 020 7186 9008
Phil Swinfen

[mutley walters] 25/10/2019 22:38

Frogkid Corbyn Abbot and Thornberry ? You should take up writing horror novels that sounds worse than hellraiser

[plat hunter] 25/10/2019 22:06

Not here though... Oh dear, it seems that old habits do die hard. Decent PR team needed still

"Jubilee appointed as exclusive partner to recover the Platinum Group Metals from the chrome tailings and platinum rich surface material. Jubilee retains 100% of revenue and earnings until full capex repayment and project reaches a 30% return on capita"

[robers98] 25/10/2019 21:47

Good to see jubilee website updated

[shotbybothsides] 25/10/2019 17:54

Jubilee Metals PLC
@Jubilee_Metals
·
1h
Great research note from
@ShardCapital
outlining Jubilee's landmark agreement with NewCo which will likely transform the economics of Inyoni (Hernic), boosting revenue and earnings as well as providing significantly more control over tailings feed #JLP



► Background. Hernic Ferrochrome Pty Ltd was previously the owner of one open pit and two
underground mines and four ferrochrome furnaces in South Africa – the operation that provides
tailings feed for JLP’s PGM recovery plant. In September 2017, Hernic Ferrochrome entered
voluntary Business Rescue, triggered when Mitsubishi, Hernic’s major shareholder and lender did
not renew covenants in order to provide a moratorium with regards to repaying the Mitsubishi
loans. The Hernic operation remained in production and is being acquired by Samancor (ref:
Business Rescue Plan update 23-10-2019), one of the world’s largest ferrochrome producers. The
result of this is a termination of the existing tailings agreement with Hernic and a new agreement
with NewCo. We believe NewCo (K2018239983 South Africa Pty Ltd) to be a subsidiary of
Samancor Chrome Limited, purchaser of the Hernic business.
► 100% PGMS. The agreement allows JLP to acquire 100% of all rights to PGM earnings generated
from current and future tailings being processed at JLP’s recovery plant at Hernic. The total
consideration for all PGMS contained in historical tailings is $5.1m, settled by JLP’s in cash.
► How is this different from before? Previously, JLP had a co-operation agreement with Hernic
Ferrochrome akin to a profit share, whereby JLP retained 100% of earnings, but only until capex is
paid back and JLP achieves a 30% return on capital. After this, a profit share kicks in, with 85% to
Hernic and 15% to Jubilee meaning that attributable earnings to JLP from Hernic would drop off a
cliff after this point. Clearly not ideal given that JLP’s Hernic reprocessing plant has the potential to
be a long-life asset. Originally, we did not expect this to happen until 2022 but given the recent
high PGM basket prices and efficiencies at Hernic, we understand the 30% return point would be
approaching in the next 12 months. Thus, the agreement comes at a prescient point and to be
clear, this earnings split is now defunct and JLP will retain all revenue and earnings from PGMS.
► Other benefits. The deal gives JLP full control of tailings re-mining and thus the tailings feed supply
at Hernic, mitigating the main risk (consistent supply of material) at the operation. This will give JLP
the ability to alter/increase the feed rate as required, not being dependent on the Hernic
operation to deliver material. On the back of this, JLP aims to increase the feed rate to 50ktpm
from the current average of 42ktpm. Furthermore, we understand that NewCo is likely to start
increasing the mining rate at Hernic and JLP will be able to garner more information such as which
reef is being mined and prepare the plant accordingly.
► More material. JLP has also acquired the 100% rights to a further 1Mt stockpile of Hernic’s PGMrich material at surface located close to JLP’s Windsor (PlatCro) chrome operations. This material
can be processed immediately at JLP’s Eland plant which JLP is pushing hard to take advantage of
current PGM-basket price strength.
► Strong partner. Although JLP’s Hernic operation has been continuing production unabated, having
the up-stream operations at Hernic in business rescue created a period of flux. Samancor, the
world’s largest ferrochrome producer is a strong partner to underpin Hernic’s future and may also
open up further opportunities for JLP.
► Chrome. JLP may also acquire the rights to all chrome contained in current and future tailings at
Hernic, at NewCo’s election. This would be highly significant as presently, JLP processes the tailings
and returns the chrome to Hernic. Thus, JLP currently incurs the opex for chrome separation but
does not receive any chrome revenue. JLP estimates that this could add 8-10ktpa of chrome
concentrate production to the group. If this option is implemented, it could also prompt JLP to
incorporate its fine chrome recovery technology into the process which further boost chrome
production and chrome revenue.

[frogkid] 25/10/2019 17:26

Got all mine in me ISA. Never lied the idea of someone telling me what to go with me money. Mind you if Corbyn Abbot and Thornberry take over I'll cash the lot in.

[plat hunter] 25/10/2019 17:21

stick in a SSAS undie,

Set up a ltd company with companies house for £27 then use 25% of you SSAS to invest into your new company then take another 25% tax free of the remainder when you retire at 57 :-)