Jubilee Metals Share Discussion Threads

[sleveen] 11/8/2019 09:45

HERNIC

The shock here was the unexpected £0.6m cost of backdated wages.

"It also includes backdated employee costs for FY2019 in an amount of GBP 0.60 million (ZAR 1.10 million)"

The £0.6m has been deducted from the cal Q2 2019 figures only. Note that the revenue is consistent with the 6437 oz produced (as is the revenue for cal Q1 2019 on production of 5086 oz.)

In round numbers, between cal Q1 and Q2 there is a difference of approx 1350 oz, multiplying this by £450 ($540) gross earnings gives £607k, which is bang in line with the £0.6m back pay.

By my calcs the £0.6m represents an additional cost per oz of approx $120 (using £1 =$1.2) for Q4.

Therefore add back the £0.6m to earnings and deduct $120 from the cost per oz gives £2.757 earnings and costs of $300/oz, which is in line cal Q3 2018 ($311/oz 6009oz) and cal Q4 2018 ($320/oz 6279oz).

Bottom line: Hernic is going full steam ahead, but will have to absorb £150k per quarter in extra costs/oz, which is around $30/oz in additional costs.

Pretty sure the Hernic business case will not collapse due to an extra approx $30/oz production costs.

[sleveen] 11/8/2019 09:41

Just a few additional thoughts on PCC.

"It appears that there is "an negative stock value adjustments for FY2019" of about £1.2m, which has been expensed thru' earnings on recognition of a stock value impairment."

Importantly this is not a cash cost but it has to be applied thru earnings/P&L account.


Adding a fine chrome line would further improve the earnings at PCC and also enrich the PGM material further from 2.7g/t to around 3.4g/t (using the DCM FC 25k -> 8k ratio)thus allowing more PGM/truck load and increasing PGM production and profitability. Clearly this would deplete the 1.8m tonnes earlier but this could be offset by contracting other 3rd party miners if there are any. This may involve equipment upgrades but PCC could offer to do it for free just to get the PGM material.

What a joy!!!

[gsg] 10/8/2019 21:37

There looks to be a backstory of current turmoil with copper processing in Zambia. National copper production/refining must be suffering, although the government says otherwise.

The addition of Zambian 5% import tax imposed on Congo copper ore exports from January this year has caused some of the Zambian smelters to be unviable.

Vedanta's KCM suspended operations at its Nchanga mine in January because of a acid shortages caused by the downsizing of operations at the Nchanga smelter.

Glencore have closed its massive Mopani operation early, including its smelter for repair and refurbisnment. Its due to re-open in December 2019.

ERG suspends copper, cobalt production at its Chambishi refinery, because of the 5% tariff on feed from its BOSS mine in DRC.

Proposed tax changes would put Barrick's Lumwana in a challenging situation, the firm said in January. The challenging conditions facing the mine means all options would have to be considered, Barrick said, but declined to comment on the possibility of a sale.

No wonder Jubilee have been welcomed with open arms by the Zambian government, given that Jubilee are opening up a copper refining line at Sable, whilst the big boys are closing up shop. The excess Zambian copper refining capacity appears to have retrenched with the cut off of ore from DRC. It would be nice if Jubilee could provide some guidance on the source of the Sable copper feed.

If JLP can refine 10,000 tonnes of pa through the Sable copper line it would be a welcome additional revenue stream for Jubilee.

[sleveen] 10/8/2019 19:15

and another thing via Thallisa or however its spelt...

"Compared to the March quarter, average chrome concentrate pricing was $12 per ton higher at $174/t, but on a nine month basis, the average price stood at $166/t which compares to $193/t for the comparable nine month period (when pricing was especially robust). Ominously, spot was about $140/t."

Who cares, it doesn't affect JLP to any great extent...probably.

[kennyp52] 10/8/2019 18:51

Guys IMHO this needs some audited figures for anything to be believe from the directors .

[1madmarky] 10/8/2019 17:22

GSG - that capacity is just massive. Regional refining hub here we come!

[gsg] 10/8/2019 17:09

Re Sable production from 2009. So 10,767 tonnes produced in 2008



Sable Zinc Kabwe Limited is a copper and cobalt processing facility established to treat concentrate from Ruashi and other ore suppliers up to FY 2008.

In the FY 2009, Sable produced 4 889 t of copper in FY 2009 – less than half the 10 767 t the previous year. This is because the plant is no longer treating ore from Ruashi, where the Ruashi II SX/EW plant has fully taken over.

“So Sable is now obtaining third party ores,” said Goodlace. “It went through a period where there was little ore coming in, but it is beginning to ramp up again with third party ores from the DRC.”

The continuing upward trend is illustrated by the fact that output was 1 105 t in the June quarter – more than double the 549 t produced in the previous quarter. And production for the September quarter is estimated at 1 900 t.

[sleveen] 10/8/2019 16:47

CHROME CONCENTRATE PRODUCTION

DCM chrome (DCMC):is small and JLP get 50%. So small beer.

In Q1 DCMM made a loss during commissioning/ramp up phase until commerciality was declared in March 2019. In Q2 DCMC had positive earnings, which could be netted off against the Q1 loss to conclude that DCMC for H1 broke even broadly speaking for the 15.6k tonnes chrome produced. DCMC could produce perhaps 20-24 tonnes chrome concentrate (Cr conc)at full capacity assuming the theoretical 25t/8t is reached.


PlatCro chrome (PCC): is large and JLP get 100%.
Chromite ore is processed from 3rd party miners on a toll processing basis. The Cr conc is then sold onwards for the benefit of the 3rd party miners.

In H1 PCC produced 150k tons Cr conc from 450k tons (75k tons/month) with revenue of £6.5m (deduction of 100k due to DCMC)gives revenue of £43/t cr conc and and earnings of £2.6m (using 40% gross profit identified in Q1 update figures)gives earnings of £17/ton and therefore costs of £26/t.

(IMV the Cr conc price does not affect the above unless there is an adjustment factor based on Cr conc price perhaps.)

It appears that there is "an negative stock value adjustments for FY2019" of about £1.2m, which has been expensed thru' earnings on recognition of a stock value impairment.

Importantly this is not a cash cost it's an intagible impairment charge most likely.

The main positive for PCC is that the initial Cr conc extract is that it enriches the PGM material for onward transport to Eland. 75k tons/month Chromite will produce 25k tons Cr conc and 50k tons enriched PGM material per month. So even if PCC was not profitable (ie it broke even) the step would still need to be done anyway. But would miners continue to mine if the Chromite price was on its knees? Probably not IMV, so it's good to know PCC has 1.8m tonnes of enriched PGM material just waiting to be transported to Eland for around 3 years which should give the price of Chromite a chance to recover.

This 50k tons + 10k tons will make to 60k tons to be processed at Eland. The transportation cost of around $4/ton will cost $240k/month.

Assuming $400/ Pt oz earnings @ 2800oz would mean $1.12m/month split 67/33.

So JLP get a net $750k less transport costs of $240k = $510k/month.

The real kicker for JLP is that they don't have to do anything other than manage the subcontracter transporting the PGM material to Eland and ensure PCC plant is well maintained.

Since the PGM material is already paid by a placing @ 5p; for a transport cost of $240k/month JLP get earnings of $500k/month.

Even better than Hernic.

What's not to like?

[gsg] 10/8/2019 16:33

MM.

The 2009 Minerals Year Book shows that the Sable copper leach and electro-winning plant at Kabwe had a capacity of 14,000 metric tonnes of copper cathode and 600 metric tonnes capacity of cobalt carbonate.

Not sure if Jubilee will be able to get production up to that level. I'm trying to find some later production reports before Sable was placed on care and maintenance.

edit: The same Sable capacities are shown in the 2013 Minerals year book.

[lostabillion] 10/8/2019 16:29

....you’d think so wouldn’t you.

Personally I’d rather the rise come much closer to the end of the year as I haven’t quite filled my boots.

Trying to get back to a 1% holding (18 million shares) or as near as damn it before the year is out.

[1madmarky] 10/8/2019 15:40

Losta... a little less than 8 weeks til the end of the quarter. If they can get copper production up and running, you never know we might even get a rise in the share price ...

[lostabillion] 10/8/2019 13:47

Nice to see JLP’s revamped website with clear indications of each project and where they’re at.

Excited to see that Kabwe will be in production by end of next month, i.e.(during this quarter).

Keep accumulating.

[plat hunter] 10/8/2019 10:59

Kabwe is a side show Krypton.. I've always said it was and it's now becoming increasingly clear to others here.. You'll see one day but possibly too late, pursuant to your form with BMR

[gsg] 10/8/2019 09:51

Wage discussions off to a slow start, says South African union AMCU

Liberum Capital analyst Ben Davis told Bloomberg News in early July that Amplats was better equipped to handle a strike should negotiations fail, citing a strong balance sheet and the mechanization of the company's key operation, while Sibanye and Impala Platinum were "more exposed" and less able to absorb large wage increases.

Greg Rodwell, a senior research metals and mining analyst with S&P Global Market Intelligence, said if a strike does occur, end users, traders and refiners have sufficient platinum stocks to withstand a strike similar to the last platinum sector strike in 2014, when AMCU members brought the mining sector to a standstill for five months.

[lostabillion] 10/8/2019 09:40

Not sure why you and Deme1 are trying to spread placing rumours!?!

Keep up the good work though as the cheaper I and others can top up before December the better ;-))

Win Win for genuine investors!

Good weekend all.

[kryptonsnake] 10/8/2019 09:16

I've said all along Jubilee needs Kabwe. Their other projects are disappointing

My other prediction was a placing at 2.7 and the share price is getting closer


LOLsss

[kryptonsnake] 10/8/2019 09:15

The usual lot are still trying to decipher that last rns. it was as clear as mud


These facts are very clear though

> share price before BMR involvement = 4.2
> shares in issue = 1.3 billion

> share price today = 2.9
> shares in issue = 1.8 billion [42% increase]


Platts famous last words "we should drop Kabwe". what a tool



LOLsss

[kryptonsnake] 10/8/2019 09:14

The usual lot are still trying to decipher that last rns. it was as clear as mud


These facts are very clear though

> share price before BMR involvement = 4.2
> shares in issue = 1.3 billion

> share price today = 2.9
> shares in issue = 1.8 billion [42% increase]


Platts famous last words "we should drop Kabwe". what a tool



LOLsss

[plat hunter] 09/8/2019 23:30

Apologies GoldI, I miss spoke.

Stable is the monetization of JLP's USP, not IP.

You're a smart bloke, I bet you'very already plotted all the sites on a map and highlighted what's near them.

I'm sure you've wondered why the builds have much more capacity than required of current projects?

I'm sure you've looked into Sables capacity too.

You ain't kidding anyone

[sleveen] 09/8/2019 21:28

Doing a bit of research on Platcro will update tomorrow as I'm watching the Canaries being gassed in an Anfield coal mine. :-(

and yup I got the PGMs and chrome figures confused but that makes no real difference to operations as the Windsor/PlatCro chrome ops feed the PGM ops. More tomoz.

[sleveen] 09/8/2019 21:21

I still want to know if Goldi considers the term "saleable" is a watering down of the term "commercial" ?

Saleable means that a product meets industry standards which DCM reached in Jan 2019 for its fine chrome.

Commercial means that DCM make a gross profit on the sale of fine chrome product announced in March. Many mining companies specifically declare "commerciality" following commissioning/ramp up.

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

You know I'm right.

Over to you Goldi.

[plat hunter] 09/8/2019 20:39

Surely Goldi had realised JLP might be subject to tax before now lol.

Grasping at straws, springs to mind

[sleveen] 09/8/2019 18:32

Capex on Kabwe will be offset by investment tax relief (presumably) as is the case with many countries inc UK.

[robers98] 09/8/2019 17:33

Delay to the start up of Hernic due to their operation. Caused a penalty clause to be triggered which has ended up with jlp having a greater pgm take. You won't see them publishing that on the website. Which is why the company can quote 2021. Hope this helps.