Jubilee Metals Share Discussion Threads

[plat hunter] 08/8/2019 20:44

We certainly need a PI register/union.

These insti's are going to try and squeeze us out of the game.

[ginko3] 08/8/2019 19:21

The current list of major shareholders on the jlp website looks interesting - several listed without a respective shareholding - perhaps indicative of them buying; being over the reportable threshold but having not actually finished buying yet?

[ginko3] 08/8/2019 19:21

The current list of major shareholders on the jlp website looks interesting - several listed without a respective shareholding - perhaps indicative of them buying; being over the reportable threshold but having not actually finished buying yet?

[ginko3] 08/8/2019 19:20

The current list of major shareholders on the jlp website looks interesting - several listed without a respective shareholding - perhaps indicative of them buying; being over the reportable threshold but having not actually finished buying yet?

[timhigginson] 08/8/2019 16:32

The technical position on stock provisions is that you cannot mark down your current stock in order to preserve your future gross profit margin. If your current inventory cost, less the provision, equates to the selling price then your current production would not seem to be profitable. It is difficult to relate the percentage of the provision to the stock of, presumably chrome, held
As regards matching revenues and costs the accounting standards are clear. If management deem projects to be profitable in the future when they come on stream then all costs relating to that income stream can be capitalised and proportionally charged against the revenue from that project as and when it arises. So in the case of Platcro transport costs they should be capitalised and added to the processed element of the usage from the Platcro dump. I don't know exactly what was bought in the two Platcro purchases but I always thought that JM bought stock which should have been shown as such in the balance sheet. The price paid must have been based on the assessed PGM content together with the chrome content. Given the anticipated 30,000 oz pgm pa the price looks reasonable.
We can onlyhope the IIs are watching these issues as closely as ourselves and that they insist on a quality FD's appointment a.s.a.p

[gsg] 08/8/2019 16:30

Losta, IMO no chance.

However it would be good if JLP could be presented with the opportunity to exploit the KCM dump, containing 450m tonnes of copper tailings, admittedly at a very low grade.

[sleveen] 08/8/2019 16:29

Goldi

yes the £1m adjustment was in 2018 and in note 14 not note 4.

As identified by note 2 : negative stock value adjustments for FY2019, probably there will be the same happening in 2019 we wont know until the accounts are published.

In note 14 to 30/6/2018 accounts:

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. [my brackets]

and note 4 states £622k has been treated as operating costs as platcro PGM material

My question to tim and Goldi is how can this be when there was virtually no PlatCro trading operation to 30/6/2018?

But in 2019 there was Platcro chrome operating and some PGM activity, so isn't it reasonable to use the same treatment for 2019 as 2018 particularly when Monday's update actual states negative stock value adjustments for FY2019 for Platcro chrome?

If yes then that would explain the Q2 lack of profit for platcro chrome.

[sleveen] 08/8/2019 16:13

sharenote

I couldn't have put it better myself.

[dafrog] 08/8/2019 16:04

My favourites are disappearing off my list but still show as favourites. Anyone had this problem today?

[lostabillion] 08/8/2019 16:01

Are Jubes about to scoop up KCM on the cheap?!?

[sharenotes] 08/8/2019 15:13

The Platcro equation:

P = J + O, C < P

Where P is material to be processed
J = JLP owned surface tailings
O = 3rd Party ore
C = Chrome Concentrate

The conundrum:

J is limited (1.8 mt)

O only attracts a toll processing fee, but when Chrome Concentrate prices are high, Chrome miners (with no processing capability of their own) tend to export their ore (i.e. not so readily available to JLP). So when prices are down, JLP can gain access to O, but have to suffer a loss of earnings when compared to processing J alone. Why would they do this? Simply because of ‘R.’ R is the remainder, post processing. Once de-watered, it is sent to Northam in order to produce a PGM concentrate.

In conclusion therefore, a temporary loss of earnings not only increases the longevity of the operation, but will pay further dividends when the PGM product is realised.

Any thoughts?

[goingforarun] 08/8/2019 13:44

Rovers, and this helps how? Thanks

[robers98] 08/8/2019 13:18

Zambia High Court turns down Vedanta’s bid for stay against KCM winding up order

VEDANTA hopes for a stay of the winding up proceedings against its Zambian subsidiary Konkola Copper Mines (KCM) were dashed today by the country’s High Court in Lusaka which said it would hear the matter on August 27.

The application for the winding up was brought by ZCCM-IH, a state-owned company that has a minority 20.6% stake in KCM. Vedanta has opposed the application because disputes in KCM ought to be negotiated in terms of the firm’s shareholders agreement, it argues.

A High Court in Johannesburg ruled on July 23 that the dispute between ZCCM-IH should be subject to the shareholders’ agreement.


The dispute brought by ZCCM-IH is that it was due $50m in dividends. It also claimed that KCM had failed to deliver on new investments in Zambia’s copper sector.

Vedanta said today it was reviewing the latest Lusaka High Court ruling and that it would “make a decision on its next steps”. Preliminary hearings will be heard on August 13.

It is thought the Zambian government is hoping to sell the assets held in KCM, principally the Konkola Copper mine if it succeeds with the liquidation of KCM.

[robers98] 08/8/2019 13:16

GLENCORE suffered the effects of a slump in the cobalt price and the under-performance of its African copper business which led it into a half year 32% decline in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $5.6bn.

In response, the Swiss-headquartered group confirmed it had put its Mutanda assets in the Democratic Republic of Congo (DRC) on care and maintenance citing an oversupply of cobalt. It also said it had developed “a credible roadmap” for its African copper business which, including the underperformance of Koniambo, a nickel mine in New Caledonia, produced negative EBITDA of $400m for the period.

Ivan Glasenberg, CEO of Glencore, reflected on a difficult six months: “Our performance in the first half reflected a challenging economic backdrop for our commodity mix, as well as operating and cost setbacks within our ramp-up/development assets,” he said.

Net profit attributable to shareholders came in at $200m for the half year which Glencore said was driven by a cobalt (-$350m) and Chad oil (-$500m) related impairments.

A consequence of the decline in cobalt prices was that the marketing division held on to material it might otherwise have sold. This resulted in a mark-to-market non-cash loss of $350m without which the firm’s marketing division’s adjusted earnings before interest and tax (EBIT) would have been only 13% lower year-on-year versus the actual 35% decline.

Commenting on the outlook, the industrial division was expected to benefit from improved production in the second half from its copper, zinc, nickel, coal and oil business as well as the operational improvements expected from African copper and Koniambo. Excluding the effects of the cobalt stock write-down, the marketing division was heading for mid-range of its EBIT guidance of $2.2bn to $3.2bn for the year.

Credit Suisse said further negative news was likely to flow from Glencore for the remainder of the year especially in terms of production guidance given the group is expecting for a much stronger performance in the second half. (The zinc and nickel assets are forecast to provide 55% and 57% of total production in the second half). Credit Suisse also said the market may continue to be against the commodities Glencore produces.

It suggested there was a silver lining, however, especially for cobalt. “The silver lining being that this move (putting Mutanda on care and maintenance) will likely have significant positive consequences for cobalt pricing with Mutanda providing 15% of the global cobalt market,” the bank said in a report.

RETURNS LOCKED IN

Glencore intended to press ahead with its planned $2bn capital return programme notwithstanding the pressure on cash flow and slight creep on net debt which was partly brought about by the faltering copper assets in the DRC and Zambia (Mopani).

Glencore doesn’t pay an interim dividend as it announces a full year dividend in February – 20 US cents/share – which it pays out equally in May and September. Whilst the buy-back programme would continue, Glencore CFO, Steve Kalmin, said deleveraging the balance sheet was a priority for the group.

“The capacity to do incremental buybacks next year would play second fiddle to deleveraging the process,” he said. Net debt inched up to $16.3bn, a ratio to EBITDA of 1.24x which was above the 1x ratio targeted over the next six to 12 months against an “uncertain economic backdrop”.

The possibility of increasing divestments was also back on the agenda. Glencore has said in the past it had $1bn in potential asset sales provided it could get the value.

“The $1bn could increase,” said Glasenberg in response to analyst questions at the half-year presentation today. “We look at that all the time. If there is demand for them [tail assets] we will always review it,” he said. Interestingly, Glasenberg also acknowledged that having 150 assets was “a lot to manage”.

[sleveen] 08/8/2019 11:22

Goldi

My understanding of saleable means that a product meets industry standards which DCM reached in Jan 2019 for its fine chrome.

My understanding of commercial means that JLP make a gross profit on the sale of fine chrome product announced in March.

Production of saleable and commercial fine chrome has been increasing from Jan and March respectively.

No watering down of terms IMHO.

DCM was loss making due to course chrome depletion, prior to that DCM made a decent profit.
RNS 30/1/18.

[sharenotes] 08/8/2019 11:18

A reasonable answer to a reasonable question – thanks sleveen.

[brucie5] 08/8/2019 11:09

Why has share price progress stalled here notwithstanding the positive recent RNS and advance in price of PMGs? A simple, idiot friendly answer, please.

[sleveen] 08/8/2019 10:58

sharenotes

"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"


----> The simple answer is that it's an error: website should state produced rather than processed.

Using chrome PRODUCED would make 6 months*25k tonnes chrome produced = 150k tonnes + 15k tonnes at DCM gives 165k tonnes chrome produced in total for the 6 months. Bang in line with the 165k tonnes chrome stated to be produced in Monday's update.


As a sense check, the 25k material processed at DCM gives a theoretical 8k tonnes produced (though not reached yet)ie about a third.

Using this as a yardstick; 150k tonnes produced * 3 =450k tonnes of unprocessed material and then divide by 6 months gives 75k tonnes of material for processing per month. Again this is almost bang in line with the stated 80k tonnes/month chrome processing capacity at Windsor.


Bottom line: Windsor chrome processing is steady and no fall off in processing and product.

[gsg] 08/8/2019 10:52

Yes, he could just be referring to DCM's takeover.

[plat hunter] 08/8/2019 10:46

Not withstanding that DCM is chinese.

[gsg] 08/8/2019 10:26

ajs.

Attempting to decode Leon's language is an art form in itself, however I agree that his quote regarding interest from Asia was out of context, as you say.

He was not pressured or lead into making that statement. He took it there purposefully. It's either yet another tease, or possibly a deal might be being discussed on the PGM side.