Well Samancor have usually used SLP and have built a trusted relationship with its BoD. So how about a merge and consolidate move next. I bet they would love to show the market how it can make a profit and deliver on its promises. Will it show its hand soon. Its sp has risen nicely, so how about it? The BoD at SLP deliver and produce platinum. JLP do not seem to be able walk the talk.
Will LC prove me wrong?
They can't boot JLP out and install SLP.
It may affect future relations as samacor see that JLP can produce at $350 ish per ounce compared to much higher by SLP - depends on capital costs also though.
The immediate effect is that we have continuing feed of pgm and chrome rich material onto the surface which prolongs the operation at Hernic.
Skim read all 140 pages and haven't seen a mention of JLP in the text or in creditors or any mention of the processing plant as an asset which is all to the good as it confirms (subject to my missing something) that the plant is JLP's and that the business rescue never affected JLP apart from the ongoing addition to the waste heaps and of course the sentiment of we, the sheeple.
The market do this all the time. They won't deal at the offer but hold the price to fill existing buy orders that have been left with them. They only move the offer up when they are 100% sure they can't get what they need at the current bid price so they give up on the existing orders and move the price up. It creates a false market in my view. They should immediately move the price to the level at which supply equals demand and not give preference to their chums.
Now this news is in the public domain it should make tomorrow's Webcast more interesting.
If Leon and Colin can confirm it is business as usual with Samancor then that would take away a lot of the uncertainty surrounding this share.
It could also turn out to be very good news if Samancor like what they see at Hernic there must be scope to extend the partnership at their other sites (assuming they are happy with the current arrangement)
Based on the offers received in terms of the bid process, Samancor was selected as the Preferred Bidder. Samancor has the right to nominate an alternative group company as the purchaser in terms of the Sale of Business Agreement. In the event of Samancor exercising the nomination right, the obligations of the nominee purchaser will be guaranteed by Samancor.
Samancor is a South African mining company with its core business being chrome mining and smelting of chrome ore. With annual installed capacity of some 2.0 million tons of ferrochrome and 5 million tons of chromite ore, Samancor is one of the largest integrated ferrochrome producers in the world. Samancor is owned by Samancor Chrome Holdings Proprietary Limited.
Terris Chrome Limited holds the majority of the shares in Samancor Chrome Holdings Proprietary Limited and the balance is held by minority shareholders, and various Black Economic Empowerment Shareholders.
Samancor owns, as part of its diversified investment portfolio, two chrome ore mining complexes and four ferrochrome plants:
All valid if it wasnt jlp you are referring to. you need to have the confidence of your investors by delivering what you say you will AND THEN build an essential pipeline. And then when you start to build do it professionally. ..
So far we have the white elephant Tjate that cost millions and is valued at zero with no chance of any revenue in the next 20 years, a loss of 5m with BHP, Kabwe with no licence, a dabble into australia and still not a solid plan to show anyone.
Why not do nothing but start producing platinum for the next 6 months. Forget the pipeline
There are several arguments in favour of building a pipeline;
1) Improves forward earnings visibility. This is particularly important for JLP because of the eventual profit share at Hernic and the lacklustre performance at DCM.
2) Avoids having to buy or acquire tailings when you really need them so you can take advantage of distressed selling, negotiate for longer, and generally pay less.
3) DCM earnings were falling back and Hernic was at risk due to the business rescue so they needed Platcro and Kabwe to manage catastrophe risk.
4) If you hire a team of engineers and buy equipment to build processing plant, you need to move them to another site as soon as you have finished using them at the previous site, otherwise you aren't optimising the use of your resources.
5) If you get held up with one project, e.g. due to the Kabwe license revocation, you can switch your attention to another project, continue to use your resources optimally, and plug the gap in your longer term cash flow and earnings forecasts.
6) Provides more frequent step ups in earnings and means you can grow faster. Without frequent step ups, you could end up with periods where earnings hardly grow.
7) The market for processing tailings is fairly immature so the more active you are in acquiring them, the better chance you have of getting your flag down in the best dumps. e.g. Kabwe. The more flags you put down the more space you have to grow into and the less space your competitors have to grow into.
8) The time from starting to negotiate a processing partnership or a acquiring a tailings dump to the time you pay off the financing on the plant and start making decent money is painfully long, maybe 3-5 years so you've got to have multiple projects at different stages of the cycle as quickly as possible. Without multiple projects on the go and several producing cash post-debt repayments, you are stuck borrowing cash from some Shylock at exorbitant rates which eats into the margin on each new project. By having multiple project on the go, you have a chance to break out of that cycle and eventually become self-financing. Margins go through the roof, you eventually have so many projects churning out cash that somebody lends you what you need to mine Tjate or you buy other processing companies to scale up.
So we are in a race, there is a lot of competition, and a pipeline is a way to run it rather than walk it. JLP are right to build their pipeline.
However, you can't build the pipeline with placings, it kills your share price. For small companies like JLP who have lost money for 16 years, the market discounts future earnings by about 75% a year so anything more than 12-18 months out is completely ignored in the market valuation. With more shares in issue and heavily discounted future earnings there is only one way for the share price to go, and that's down.
The way to build a pipeline is by partnerships. They did that at DCM and Hernic and it worked. JLP provide their expertise and potentially the financing using their USD 50m facility and somebody else provides the tailings. Partnerships conserve capital, minimise risks, and critically increase the share price because you are creating value out of nothing and sharing it between fewer shareholders by avoiding dilution.
The rns says that the webcast is to allow investors to engage with them for an update on Hernic and their other projects. Does this cover them to release new material / answer direct questions about the projects?
Some very good posts today but I think this from arry sums up the views of most PIs
The strategy of looking for the next big project before delivering profit on previous project has failed yet they continue to do this. When will they ever learn ...GET MONEY IN THE BANK
I have said before the company has an excellent business model, all miners have problematic tailings and JLP can give them a solution that also generates revenue for the company.
A win win for mine operators.
From Jubilees point of view Hernic and DCM are the current earners, get them firing on all cylinders, when the engine room is generating profit then look to expand further.
If they are efficient and generating profits, then the deals will come.
As regards a potential takeover of JLP, I think on previous webcast Colin was worried about a possible takeover because of the low share price. At that time the share price was far higher than it is now. If I am right then his concerns will have escalated and that might be why, with the share price tanking, they announce this webcast.
I do not want a takeover but this is just an observation.
On Thursday I do not expect anything other than reassurance, unless news is released prior to the event, from Hernic or Kabwe.
Steady expansion driven by solid earnings is what I believe most PIs want
More going for RBD and SAVP on my view. This lot talk a lot but seem never to arrive at the destination. Come on LC prove me wrong. Check out Malcy and his blog. He makes some useful comments and he is making positive noises on the O & G front. As always DYOR and ignore my opinions etc.
£32 million for Tjate with mining rights, Hernic (at £13 million cost) plus DCM chrome plus pgm rich tailings waiting to be processed at DCM plus Platcro bought and paid for plus share in BMR plus Kabwe option pending result of appeal. If that little lot isn't worth at least £50 million to £60 million then we may as well all pack up.
The share price has moved on sentiment - as usual - Colin is not impressing with his jam tomorrow speeches and promises of mid cap. What's the point of being midcap to a shareholder if the shares are worth less than we paid for them. The latest vox performance I think was Colin's attempt to put right Leon's poor communication and only served to make things worse. leon looked more convincing in the last webcast. However, Colin must be hurting- both reputation and financially (he's lost about $160,000 over the past month or so on JLP). He's a proud Yorkshireman and will be keen to prove his metal(pun). I was educated in mining at the same institutions as he was (very thorough) - he is experienced and knows his stuff but has suffered blows with 2 of his companies now( https://www.miningmx.com/rainmakers/profile/112) and needs to get some cash in the bank to turn sentiment around.
Sold one of my other shares and bought more JLP at 2.38p - got a bit more ready for any further weakness before the live chat - they simply can't just re-iterate the same stuff -the news will have to be good on Hernic update and some dates for action on other fronts.
The one negative I can see from here on in is if the live chat is an attempt to bolster the sp in order to get a placing away for the two projects yet to be announced - if so he's wasting his time as the punters want to see cheap ounces (tick) and lots of them (no tick) plus big rise in DCM chrome figures (no tick) to feed through to the bottom line(no tick), add in clarification on Hernic ownership (no tick) and BMR appeal success (no tick) plus Platcro plans with dates (no tick) plus DCM plans for pgms with dates (no tick).
Lots of boxes to tick - they need to tick some on Thursday - announcing two new projects about to be secured with no details of where the capital will come from or wen they will provide profits simply will go down badly with investors.
I have bet on them ticking some boxes by buying more this morning and am musing whether to go all out on the sp recovery with the rest of my free cash.
Agreed. They appear to be hell bent on achieving fast growth before they have proven to the market that they can deliver profitable (audited) operations at their first 2 projects. For gods sake they have still to produce PGMs at DCM and without achieving that they are continuing to dilute in haste for projects and don't have the time time to do proper due diligence.
They don't have the organisation structure or (business) skillset to achieve such fast growth imo and even if they do achieve success further dilution is a guarantee. They also need to stop making misleading statements about positive cash flow and profit ignoring depreciation.
They need to get the message. They cannot brush history under the carpet because it suits them they are in the last chance saloon as far as the market is concerned and me
I agree mushroom. The strategy of looking for the next big project before delivering profit on previous project has failed yet they continue to do this. When will they ever learn ...GET MONEY IN THE BANK
I didn't invest hear for a 40% increase in the SP from hear should SLP or anyone else want to bid.
Too many duck seasons have passed and they have been lining up more than a patient Brit at Disneyland (Previous experience)
I have said it multiple times here unfortunately but we are on the cusp of something as big as that I originally anticipated years ago when buying into our "patented technology" and how that would transform us
This has a lot of potential, too many ifs and buts and way to much overselling and under delivering by the BoD but I remain positive that this is heading in the right direction and wholly recommend that the BoD keep a lid on opex and BoD salaries until they actually deliver what they said they were going to.
For those who can't make Thursday here is the transcript.....
Kabwe not our fault,they didn't tell us
Hernic production not our fault
No platinum being processed is not our fault
DCM production not our fault
Write off of millions not our fault
Share price not our fault
Continued dilution not our fault
Poor Comms not our fault
Picking the wrong broker not our fault
..and if you can't see why we are not a profitable business then learn to read the accounts..not our fault
In the past they have not normally delivered any RNSs prior to any Webcast. I strongly feel there is no point in doing the webcast unless they have solid progress or news to report and discuss. If they simply repeat the same messages as before the exercise will only make matters worse.
Here is hoping for something significant and positive.
On the 7th February within one day of the webcast JLP issued an RNS the first paragraph of which stated
"Jubilee Metals Group PLC notes the announcement made today by BMR Group PLC ("BMR") reporting that BMR received, yesterday, a letter from the Mining Cadastre Department of Zambia dated 19 December 2017 terminating, with immediate effect, the aforementioned mining right in respect of BMR's Kabwe operation. "
The day before Colin and Leon had indicated during the webcast that they had completed due diligence on Kabwe and the project was of huge significance for the future of Jubilee. Colin invited everyone to have a look at Kabwe to understand its importance and significance."
The next day BMR issue an RNS stating that they have had the mining licence revoked.
Result Colin and Leon look ridiculous and their due diligence must have been non existent. Then the SP drops very sharply
I bet Leon is spitting blood about the licence being withdrawn the day after the webcast. He does not strike me as a man who would enjoy being made to look like a fool.
Just been looking at the RNS's to see where your comment came from. Can you advise??
I always worry when Jubilee price drops sharply that theres a placing on the way ? _ just based on past experience. I do hope not. The credibility of management is already shot to pieces on the "no more placings" promises but Colin just cant help himself
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