Jubilee Metals Share Discussion Threads

[ajs31] 08/8/2019 10:11

Thats exactly what I was thinking GSG. Why would he mention interest in companies (out of context).
He must have had talks to know of all the interest from the chinese.

[gsg] 08/8/2019 10:01

From Mondays Proactive interview.

I wonder what Leon is getting at? Could it be Tjate?


1.53 mins - "Platinum is starting to recover nicely. We see a lot more interest coming from Asia on platinum, platinum projects and (company?) with platinum interests"

[bullster] 08/8/2019 10:00

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It always was puzzling why Glencore wanted the pre production acid in the Sable Refinery deal. After all, a company the size of Glencore was collecting plenty of acid from their smelters, plenty for their needs you would think. Then the copper penny dropped.

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[gsg] 08/8/2019 09:04

Not directly related to JLP but shows the PGM sector is booming. Tjate anyone?

[bullster] 08/8/2019 08:55

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34DegSth,

What do you think ?

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[sharenotes] 08/8/2019 08:35

Far be it for me to comment, but you may find that there is no supply shortage regarding your ‘purpose.̵7; Lucky you!

[bullster] 08/8/2019 08:18

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sharenotes,

Forgive my probing, your intelligence quotient may be too high for my purposes, anyway.

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[sharenotes] 08/8/2019 07:51

I think we are barking up different trees here Bullster (you may want to address 34DegSth directly) but, for entertainment purposes, it certainly won’t be $165 per tonne of concentrate produced.

[bullster] 08/8/2019 07:44

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What does JLP charge them for services provided ?

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[sharenotes] 08/8/2019 07:41

I think one line might do it .... ‘3rd party ore suppliers.’

[bullster] 08/8/2019 06:59

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sharenotes,

Explain to me, what you think JLP own and do operationally at Windsor Chrome, then i'll know how to come up with some answers.

edit.... 3 lines should cover it.
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[sharenotes] 08/8/2019 06:19

On a separate point; numerous references are now being made to the yield inversion in the US bond market (historically, a good indicator that a recession is forthcoming). Trump talks about how the US economy is doing great, yet on Twitter is calling for the Fed to aggressively reduce interests rates. Makes no sense whatsoever, unless he is a bond watcher too? Currency wars, trade wars and so on, whilst taking up a lot of air time, are not the biggest game in town. All currencies are now falling with respect to gold and that’s the key. Paradoxically, when the yield inversion flips, this should not be read as good news. It will rather indicate that money is flowing out of the bond market and it has to find a home. Will it flow into the stock market, precious metals or cryptos? For me the question is rhetorical, but what do you think?

[sharenotes] 08/8/2019 05:55

I find it unlikely that the loss of performance at Platcro (Windsor) is largely due to the lower chrome concentrate price.

From 10th December 2018 RNS:

‘Jubilee acquires major chrome operation currently processing 75 000 tonnes per month for a consideration of £8.6 million.’

From project information as detailed on JLP’s website:

‘25,000t per month of material processed during Q2 2019.’

A reasonable question is why has the processing of material reduced so dramatically?

[goldibucks] 08/8/2019 00:24

Finally, Hernic. I concede I hadn't noticed the Shard reference to the 85% share not kicking in until 2022. Initially if you recall, some people on this board wouldn't even accept it was 85% and were saying it was a typo. The Hernic profit share has never been correctly reported, even the Shard note talks about a "30% return on capital" which is meaningless unless your clarify whether that's a 30% return in total or a 30% return each year. If it's a 30% return in total, they made just over £4m in the 5 quarters to 30 June 2018, just over £4m in the 2 quarters to 31 December 2018, and just over £4m in the last 2 quarters to 30 June 2019. So by my calculations, as of today, they have recovered their original £13m investment.

A 30% return in total is another £4m roughly or 2 quarters of earnings. Shard are saying the 85% share doesn't kick in until 2022 which is great if it's correct but it must mean JLP are getting more than just a 30% return on their investment in total because by my calculations, they will have that by the end of 2019. If they are getting another 2 years at full share they aren't describing the terms of their profit share accurately. The return must be 30% on their investment each year which is great. I'm wondering why they don't process more slowly because that would could drag out the full share for years. I'm sure there are lots of penalty clauses built in on both sides to ensure both sides play ball.

Some food for thought. By 30 June 2019 they have processed over 1m tonnes of tailings at Hernic. There were originally 3.3m tonnes with 17,000 tonnes of arisings getting added monthly. They are processing about 500,000 tonnes a year. Therefore, by the end of 2021, they will have processed about 2.25m tonnes. Hernic must be generous partners indeed to allow Jubilee to process 2.2m of the 3.3m original tailings, excluding arisings, before they get a decent share of the earnings as owners. However, you look at it, they are making about £8m a year from Hernic and losing 85% of that, whenever it happens, is going to be painful. If they don't sort out their other projects, it could be the end of them.

Having had 3 stints as a investor, Jubilee disappoint time and time and time again. The PGM basket price rose strongly in H1 19. Who wouldn't expect progress on Hernic earnings? Unbelievably, it flat lines. Multiple investors on this board were telling us how much the higher basket price was adding to earnings. All of their predictions turned out to be wrong.

Platcro Chrome came flying out of the traps in 2019 and looked like a great deal, £0.9m of earnings in 2 months and we were told that didn't even include all of January because the deal didn't complete until a week or so into the new year. In the Feb Indaba Presentation, they'd increased the initial USD 5.5m of profits to USD $7m? We were cooking on gas. You've got to expect some progress in project earnings in Q2 19 compared to Q1 19 on that trajectory, right? No, down over £1m.

DCM fine chrome, a massive, massive oversell by Jubilee. DCM is still loss making in my view, hence why they combined chrome earnings for DCM and Platcro. Watered down wording of "commercial" production to "saleable" chrome concentrate says it all.

There was no organic growth in H1 2019 and JLP are meant to be a growth stock. And that's in spite of a strong rise in the PGM basket price when JLP generate most of their earnings from PGMs. All the growth came from Platcro Chrome, an earnings stream that was bought and paid for with debt, equity, and cash at the start of the year. And to make things worse even that nosed dived in Q2 19 and as I say, chrome stock provisions in Q2 19 don't bode well for future Platcro Chrome profits. Next is Platcro PGMs. Again, those tailings were paid for with a placing a couple of years back.

Kabwe is the only project with potential for delivering organic growth because they didn't pay much for it. I'll continue to hold 3m shares for the transformation that might deliver. However, apologists for the diabolical performance on every other project to date, should be demanding consistent organic growth, not flash growth for a month or two paid for in full by either debt or equity, followed by hopeless underperformance.

[goldibucks] 07/8/2019 23:35

Next point to discuss Sleveen is DCM. It is wrong to conclude that because JLP referred to "commercial" production starting in March, that DCM must be profitable. Having all my eggs in one basket, I follow the language they use very closely. As I said, DCM without fine chrome was loss making when previously reported separately. Fine chrome is tiddly, they referred to producing 6,298 tonnes of chrome concentrate from DCM fine chrome in July 2019, Platcro Chrome on the other hand is targeting 300,000 tonnes a year. Even Shard acknowledged it wasn't particularly material. Is it material enough to offset the original DCM loss? Maybe, but trust me, DCM overall isn't making much money, if it's profitable at all. Did you spot that the "commercial" production in March reference got watered down to 3,800 tonnes of "saleable" chrome in the 5 June project update? A noteworthy change of wording, implying it was still loss making. Why do you think they combined Platcro and DCM chrome project reporting into a single chrome number? Do you not think it might have been to disguise DCM losses?

To understand what is going on with JLP, you have to pick up on everything they say and don't say. In the 5 June update Platcro Chrome earnings were described as being "ahead of projection", and I said that was £2.25m per half year or £1.125m per quarter, by the time they released the 11 July project update there wasn't a single reference to Platcro Chrome, check it, then this week we find out the rub, they had to make a stock provision for the chrome element of the Platcro tailings (and not transport costs relating to the JLP processed Platcro PGM tailings!) that nearly wiped out the "ahead of expectations" Q2 19 project earnings.

[goldibucks] 07/8/2019 23:16

Sleeven let's start with minute 54 of that video link you posted. Platcro PGM tailings transport costs to Eland may well be 1.2m USD but that's not the £1m shortfall in PlatCro chrome Q2 19 project earnings.

Leon is talking about an increase in working capital ahead of generating revenue from Platcro PGMs in the video and that's the build up of stock value as you transport the Platcro PGM tailings to Eland. As you pay to transport the tailings, you increase the carrying value of the stock by the cost of the transportation. This is the £90,817 in the first paragraph of the disclosure underneath Note 4 Inventories in the 2018 Annual Report.

You do not (effectively) charge that transport cost to your P&L until you process the tailings. When you process the tailings, you transfer the value of the stock with the additional cost of the transportation built in to the P&L as cost of sale to match against the revenue you are generating.

The disclosure in the third paragraph under Note 4 referring to the £1,036,298 is talking about a stock provision. It's just a coincidence that this is roughly the total cost of transporting the Platcro PGM tailings Leon referred because the £1,036,298 related to the year ended 30 June 2018, per the announcement of the Northam deal on 18 April 2018 the Platcro PGM tailings were only starting to get transported to Eland from June 2018. That's why they'd only added £90,817 to the value of the Platcro PGM tailings in their Balance Sheet by 30 June 2018.

Also, bear in mind that Platcro PGM tailings transport costs to Eland are nothing to do with chrome project earnings. They will eventually get incorporated into PGM earnings when the PGMs get processed by Northam and the value of the stock, including costs to transport, are moved from stock to cost of sales and matched against the revenue produced.

You make a stock provision when the cost or carrying value of your stock in your Balance Sheet is more than the net realiseable value of your stock, i.e. what you can sell it for plus less the costs you incur selling it. This is what Jubilee are referring to in the H1 2019 production data. They have made a stock provision in Q2 19 on the value of chrome rights on the Platcro tailings.

This article refers to the "ominous" fall in the chrome concentrate price at 30 June 2019 for Tharisa, below recent period averages, which will have resulted in Jubilee having had to make a provision on the Platcro chrome tailings which they would have on their Balance Sheet after buying Platcro Chrome.



The significance of the stock provision is that if they are having to reduce the value of the chrome in the Platcro tailings to net realisable value because it's lower than cost they paid when they acquired Platcro Chrome, that could limit how much they make when they process it. Do you understand that? Hence my comment about them potentially finding it difficult to match calendar H1 19 earnings in H2 19, let alone double them as you claim. Platcro PGM earnings will start to ramp up but I'm concerned Q3 19 and Q4 19 might both be more like Q2 19 than Q1 19 because that's the trend, chrome concentrate prices have fallen and they've needed to make a provision which has hit their chrome project earnings in Q2 19.

[parsons4] 07/8/2019 22:31

I want to buy here but for once I think most of the posts are spot on !!!

[kryptonsnake] 07/8/2019 19:31

To condense and summarise Sleveens long posts

JAM TOMORROW


LOLsss

[sleveen] 07/8/2019 19:15

Answer E

All the above :-)

[34degsth] 07/8/2019 19:09

Question: Why is JLPs Revenue, that it Realised from the Sale of its Produced H1 2019 CrConc Material, SO DISPARATE From the Average H1 2019 Market Related CrConc Prices?

The Average H1 2019 CrConc Market Price was ~$165/t. JLPs H1 2019 CrConc Revenue equates to only £40/t ($50/t)! – this figure is inclusive of the Shipping Cost (~ $20/t from SA to China), so the Sales Price was ~ say $70/t (ie. $50/t + $20/t) (165 >> [50 + 20])? What happened to the Delta of $95/t?

Is it because:
- The H1 2019 Revenue Accrued was actually (a Combination of Toll Processing of 3rd Party Material & the Processing of its own JLP material), or
- H1 2019 CrConc Tons SOLD was Far Less than the Tons of CrConc PRODUCED, or
- The JLP Sold/Exported CrConc End-Product Requires Further Processing (in China say) to meet export 40%-42% CrConc standards, or
- Other reason?

[eblitz1] 07/8/2019 19:04

Hi All
This seems to be the complete problem with either us being small investors or JM being in a position to educate us on their way of accounting. We as in 99% of us do not understand because we are not qualified accountants and look at the simple figures in an announcement. And the other way of looking at it is why should JM educate us on accounting. This is assuming that Sleveen is correct which appears to be the case as his argument is logical. So at the end of the year it appears that if the price of PGM's remain where they are or even go up and Fine chrome starts to motor then we should have a good set of figures. It also is very interesting what they are going to do with the PGM's at DCM which is very very valuable considering the price of PGM is going north. So it seems to me that Institutions who understand accounts and balance sheets are buying and ignorant people such as myself are frustrated and some are selling which I am not, I own over 4 million to be transparent but need to be an accountant to ease my frustration

[eblitz1] 07/8/2019 18:48

Hi Sleveen
Did you get my message?

[sleveen] 07/8/2019 18:47

1MadMarky7 Aug '19 - 18:17 - 13454 of 13456

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


----> Yes :-)

[1madmarky] 07/8/2019 18:43

Post of the week -》 sleveen