Jubilee Metals Share Discussion Threads

[robers98] 14/8/2019 16:48

Platinum-using buses, forklift trucks gaining rapid ground worldwide

Fuel cell electric vehicle (FCEV) technology, which relies on platinum catalysis, is gaining rapid ground across the world, Mining Weekly Online can today report.

FCEV growth is taking place in tandem with the spread of the hydrogen economy in a world that is cold-shouldering carbon pollution and taking steps to mitigate climate change.

FCEV technology produces electricity using an electrochemical reaction that gives off water as a by-product and emits zero greenhouse gas.

In China, where major city air pollution can be excessive, more than 400 000 FCEV buses are on the roads, while in the US, 15 000 out of a total global count of 20 000-plus forklift trucks are making use of platinum-catalysed FCEV technology as they go about mainly warehouse duties.

Prominent in California are Toyota, Honda and Hyundai FCEV cars. Around Los Angeles and the bay area of San Francisco, 7 800 FCEV cars have access to 40 hydrogen filling stations. By 2024, the target is to have 200 hydrogen filling stations in California, where the government is incentivising decarbonisation strongly.

The big selling points of FCEV heavy-duty trucks are their rapid charging times, zero emission at the point of use and the ability to be subjected to demanding duty cycles. FCEV forklifts refuel in three to five minutes and operate silently.

The technology is following the same cost trajectory as solar, which was initially highly priced, but which economies of scale quickly dragged down to competitive levels.

In South Africa, platinum group metals (PGM) mining company Impala Platinum has been putting a showpiece FCEV forklift truck through its paces successfully at its refinery in Springs, on the East Rand, where an economically viable hydrogen refuelling station has been established. (See attached Creamer Media picture.)

“Fuel cells and the hydrogen economy pose an attractive long-term opportunity for future platinum and PGM demand,” Minerals Council South Africa states in its National Platinum Strategy document, under the heading of ‘Fuel cells: sponsoring a hydrogen town in China’.

China has selected a number of ‘hydrogen cities’ in which FCEV technology is being deployed and hydrogen refuelling infrastructure installed.

Minerals Council South Africa believes it would be attractive for South Africa, as the host of the world’s largest PGM endowment, to work with China by shadowing a small number of its hydrogen cities.

“Although this would add only a very limited quantity of PGM demand in the short term – several hundred additional ounces – the longer term impact could be very significant,” Minerals Council South Africa states in the strategy document.

FCEVs are best suited initially to demanding duty cycles where higher and longer energy output is required and zero emissions are crucial.

The appetite for FCEV buses is gaining momentum in Europe, where 1 000 FCEV buses are earmarked for deployment.

In the UK, hydrogen buses that formerly cost upwards of £1-million are now £350 000.

Chinese company Dongfeng has manufactured 500 FCEV trucks. In the US, beer giant AB Inbev has placed an order for 800 FCEV trucks with Nikola Motor Company, which has received a $1.7-million grant for fuel cell membrane electrode assembly (MEA) research and development. MEAs serve as barriers to separate the cathode and anode of fuel cell systems.

Hyundai is bringing out an FCEV truck this year and Toyota has one at the pilot stage.

Alstom has won tenders for 27 more hydrogen-powered trains after successfully launching the world’s first in Germany last year.

Bavaria is equipping trains with safer hydrogen storage using liquid organic hydrogen carrier technology that South Africa’s HySA Infrastructure is piloting at North West University.

The Department of Energy in the US estimates that there could be as many as 40 000 FCEVs on the road by 2022.

[plat hunter] 14/8/2019 16:37

A lot of respect has been lost... Just be honest, people are fools if they think they can move markets by having opinions that are contrarian to their actions.

[plat hunter] 14/8/2019 16:33

I want to know what exactly Goldi was expecting out of DCM and hernic?

I for one knew that any uplift in earnings would be purely down to Windsor, this time around.

[sleveen] 14/8/2019 15:45

Tharisa presentation: all in sustaining cost per 42% chrome US$145.8/tonne in 2018.


Hence the comment posted by Goldi:

"Tharisa confirming the fall in chrome concentrate prices at the of June. I think it fell to about USD 140 a tonne at 30 June"


----------->No wonder Tharisa are concerned at the then low price, the AISC is more than they sell 42% Cr conc for. But that's mining, JLP don't do mining.

[bullster] 14/8/2019 15:35

.
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alpal2, Shard gave these valuations on March 4th 2019, for full year 2020.

On Earnings
On CF valuation
On EBITDA



5x FY20 earnings 5.2p
7.5x FY20 earnings 7.7p

5x FY20 CF 6.9p
7.5x FY20 CF 10.4p

2.5x FY20 EBITDA 8.9p
5x FY20 EBITDA 17.9p


(page 19)
jubileemetalsgroup.com/wp-content/uploads/2019/03/Shard-Capital-Jubilee-Metals-March-2019.pdf

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[sleveen] 14/8/2019 15:30

PS since PCC took at for reduced costs of chromite, assuming chromite price increases then the increase will be written back into profits.

On balance I prefer the old accounting method whereby asset write downs went thru' the balance sheet with an explanatory note to highlight write downs or write backs.

[sleveen] 14/8/2019 15:12

Goldi getting desperate

"Also, re PGMs going up, yes that’s great. I thought it was going to boost Hernic profits in H2 but it didn’t."

You know the reason for the flat profits

[sleveen] 14/8/2019 15:06

"Tharisa confirming the fall in chrome concentrate prices at the of June. I think it fell to about USD 140 a tonne at 30 June"

Must be tough if your a chromite miner.

JLP aren't.

PS JLP in the 2018 accounts have no current or long term provisions.


Though I note there was a £620k intangible write down in relation to Tjate.

"The PGE exploration intangible asset relates to the exploration of the Tjate Platinum Project. The intangible asset has an indefinite useful life which is tested
for impairment annually and individually to determine whether the indefinite life continues to be supportable. The Tjate Project’s Merensky and UG2 platinum
reefs (Reefs) targeted for initial mining lie between 600 metres and 1,000 metres below surface. The Tjate Project is independently judged to contain arguably
the world’s largest undeveloped defined block of platinum ore. The property covers 5,140 hectares on three farms and the area has been independently
appraised to contain a potential net 65 million ounces of platinum group elements (PGEs) and gold. This represents the resource targeted for future exploratory
drilling. Only once a prospect, to bring the Tjate Project to account, becomes feasible, will the useful life of the intangible asset be determinable.
The recoverable amounts of intangibles are determined from value in use calculations. The key assumptions for the value in use calculations are those
regarding the discount rates, growth rates ad expected changes to selling prices and direct costs during the period. "


At one time stock/inventory write downs were allowed by IFRS (International Financial Reporting Standards) to be put thru' the balance sheet rather than the P&L so as to protect the profit statement and to hoodwink investors. Any write downs now have to go thru' the P&L.

See Accounting for Growth by Terry Smith (the fund manager who lost his job for writing the book because a FTSE co complained as it was a client of the stockbroker where TS worked) a cracking read as to what accounting tricks some FTSE 100 companies got up to in order to preserve their "profit".

[niloc4] 14/8/2019 14:50

alpal you looking at approx 1p within a year based on Leons and Colins Jam stories

[goldibucks] 14/8/2019 14:41

Also, re PGMs going up, yes that’s great. I thought it was going to boost Hernic profits in H2 but it didn’t. That’s why I saw flat lining as a negative. Ultimately though, what they make on Hernic is pretty much capped by the profit share. The best thing they can do is process everything there as quickly as possible and try to add third party tailings to the mix. The problem is the overall economic profit on these projects is questionable even when they generate project earnings and statutory profits because the cost of equity capital isn’t getting priced in so transporting tailings from other sites can just make that situation worse.

[alpal2] 14/8/2019 14:28

Do any of the brokers covering JLP give a one-year target share price.
Forecast prices on this BB range from <2p to >10p.
Any advance???

[goldibucks] 14/8/2019 14:26

eblitz the stock provision was made at the end of June. That’s when the spot price of chrome concentrate dipped. No idea why you are talking about December.

Stock provisioning shows that JLP were carrying the chrome in the Windsor tailings on their Balance Sheet at a cost above the net realiseable value prior to the end of June. Even by reducing cost to net realiseable value, that’s a worry for investors. It means that if the spot price doesn’t recover there is little or no profit coming through in the following quarter. Equally, if the spot price falls, they could report a sizeable loss. You want to be in a position where you are carrying your stock at a relatively low cost versus net realiseable value because then you have a cushion against any future price falls and can maintain profits for longer if they do. You’re right about the mothballing but why does JLP want to in that position on something it only bought 7 months ago? If you read my earlier comments, you’ll see I’d worked out the stock provisioning issue pretty quickly when the results were announced and posted a link to an article about Tharisa confirming the fall in chrome concentrate prices at the of June. I think it fell to about USD 140 a tonne at 30 June.

My comments about project earnings are critical to understanding JLP’s business model to date. By issuing equity to grow and not having to charge their P&L with a cost for that equity, they generate project earnings and eventually statutory profit without having to factor in all of the economic costs of undertaking the project.

JLP could have project earnings and even statutory profits on a project that isn’t economically profitable. Do you understand that? As long as they fund tailings and plant with equity, it conceals the real commercials by eliminating the financing costs. Losing money at a taxable profits level also conceals the fact that projects may struggle to make enough money to cover corporation tax and pay a decent return to shareholders via dividends out of taxed profits.

Project earnings exclude management costs, interest, and the cost of capital for equity. If you don’t include all of these other costs you may be undertaking projects that lose shareholders money or just don’t give them the sort of return they need for holding equity.

[1madmarky] 14/8/2019 14:00

"Combined PGMs and Chrome. Revenue was £14.4m, up 75% from £8.1m in H2 2018. The
majority of the increase was in the chrome division, due to bringing on-line both the DCM
Fine Chrome and Windsor Chrome operations. Operational earnings were £5.6m and despite
an encouraging 47% increase over the prior period, reflect a lower margin than expected due
to an exceptional stock adjustment within the chrome division. This one-off adjustment
reflects a reduction in chrome prices towards the end of the year, although we note that
chrome prices have recovered strongly since. Hernic’s contribution was stable, with the poor
start to Q1 being compensated for by record production in Q2. We are in the process of
updating our model to reflect updated production plans for new projects, including Kabwe"

[eblitz1] 14/8/2019 13:35

Goldi
If you get off your horse for one tiny second you will find that if you read the note correctly it says that there was a downturn in prices at around Dec which have come back strongly. I have not checked the prices of Chrome but that is why they had a £1m shortfall. This is something that no chrome processor or miner can do anything about.
That's why Glencore and others mothball projects. Everyone does stock provisions
The fact that you think that prices go down and then stay down which screws up your balance sheet tells me that you know nothing about everything. To say JLP's focus on project earnings is not in shareholders value is the silliest thing I've ever hear If they don't look after each project and try to get the maximum out of them what else do you want them to do go out every morning a dig holes in Tjate. You have also forgotten to say that Palladium has gone up Platinum seems to be going up and Rhodium is going up up and up. I suppose that is not good enough

You Sir are a complete and utter idiot that should go back to school as you have no idea

[goldibucks] 14/8/2019 13:25

Losta you thought that was a good announcement on the day but it wasn’t. It was masking zero organic growth, all the growth came from the Windsor Chrome acquisition, there was no growth from DCM or Hernic, and then they let Windsor Chrome slip 80% or £1m+ of in Q2 due to what looked like a stock provision. Stock provisions can mean lower future profits because the net realiseable value is slipping below cost in your Balance Sheet. The fact that you still think it’s good news and should be reposted is worrying. You need to look under the bonnet.

JLP’s focus on project earnings is not in shareholders’ interests. Project earnings could double every quarter but if they are charging that growth to shareholders through debt and equity funded acquisitions and not covering managements costs, interest, and a return on equity issued to pay for tailings and plant, shareholders won’t make any money in the long run.

[gsg] 14/8/2019 13:25

The broker note reads fine. If the interim RNS had been written with the same clarity then there would have been no issues .

edit: Forgot to say, thanks robers.

[robers98] 14/8/2019 13:08

Updated broker note on website



05 August 2019

Shard Capital

Operational results hint at the growth to come…

[lostabillion] 14/8/2019 12:48

Leon Coetzer, Chief Executive Officer, says,

“I am delighted to present Jubilee’s Six Monthly Operations Update which showcases the exceptional progress we continue to make across our portfolio of metals processing projects – delivering against our targeted performance and bringing new operations on-line.”

“Such a marked increase in combined revenue – 75% against H2 2018 – reflects our sustained focus on increasing and diversifying our earnings base and maintaining strong margins. This has been achieved through a considerable uplift in production figures across our portfolio, both in chrome and PGMs. Notably our chrome performance has seen significant growth which is attributable to our ground-breaking DCM fine chrome operation and Windsor chrome operation being brought online during the period. Replicating this success, we expect to see a step-up in PGM production following the Windsor PGM project being brought into operation during July 2019.”

“With the acquisition of Sable Zinc Kabwe Refinery for the processing of the Kabwe material fully completed, our technical and operational teams are focussed on bringing the project on-line against accelerated timelines. This means we will soon be adding zinc, vanadium, lead and copper to our commodity basket, an important element of our on-going development strategy to diversify our earnings through additional jurisdictions and increased metal exposure.”

[goldibucks] 14/8/2019 12:48

Sorry forgot to add without pursuing an agenda or being a day trader. Thanks for the reminder Losta.

[goldibucks] 14/8/2019 12:40

Goingforarun, investors can criticise Jubilee without being emotional, ranting, needing to sell, a troll, a deramper, wanting to buy their shares back cheaper, weak, or failing to appreciate the enormity of the jam coming their way tomorrow and the insignificance of current trading.

[lostabillion] 14/8/2019 12:29

GFAR, it’s all agenda driven. You can spot the day traders and grudge holders a mile off.

The more vocal they get the more concerned they are that the share price will break away from them.

I don’t mind the deramping as I’m still accumulating ;-)