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Listened in this morning.
Leon saying fully operational at target output for Roan by end of July (precisely 3 months late as he invited them to come and see it fully operational at the end of April).
Updated video promised to shareholders at end of July showing it running.
Sable to take Roan produce in the short term but the two newly purchased projects will fill Sable on their own 16.000 tonnes @$5000 /tonne profit (minimum) = $80 million profit per annum at Sable starting in the next 6 months.
Roan 9,000 tonnes per annum after upgrade in next few weeks - twin feed - low grade and higher grade. Lower grade must go to Sable for further upgrading, higher grade can go to Sable or be sold directly into the market.
QUESTION - what do we do with Roan output if Sable is already at full capacity???
ANSWER - further benificiation plant to be built at Roan but not planned to be soon - do we need to be careful in saying that we produce 25,000 tonnes, are we double counting Sable capacity for the lower value concentrate and new purchases.??? I don't know the answer - I think Edzi was asking something similar about Roan output figures being confusing.
The future - presenter was talking about 50,000 tonnes and said he knew Leon couldn't talk about this/ mention this??
After Roan, Sable and Thutse upgrades and expansions (all in the next 6 to 8 months) the top priority will be securing waste rock assets which should be financed by IRH - Roan beneficiation and further chrome opportunities will come after that.
For the next two years re-investing profits into copper as it's return on capital far outweighs return on cash (stated by Leon). In a couple of years time will discuss whether to return cash to shareholders.
Throughout the interview I got the opinion Leon was trying to address specific investor concerns voiced on this board and elsewhere and that, as edzi has repeatedly said, there are other things going on in the background. My take is that project Roan is vital to us small shareholders in terms of the short term value of our shares but the importance of Roan in the overall company size and strategy when we look back in time two years from now will be small and dwarfed by what has happened in the meantime. GLA.
Mornin Kalan
I listened to the podcast last Sunday, as I said even after that podcast no one knows about the split of Sulphide or Oxide which makes a huge difference. I think the boys at roast were pushing the amounts up and obviously Leon can't answer but this has been done before by them. There is no doubt that down the line the Company will be hugely profitable and we know this is just the start. But with all Leon's talk about Roan and Monkoyo and the two new aquisitons which now make a total of three and more to come, as we all know the elephant in the room is how on earth are they going to process it if Sable is full. If it's just Sulphide it doesn't matter as it can be sold to market, and that is my worry, as it changes the figures enormously. So why don't they answer the question?
I think it is virtually impossible at this stage to come up with a reasonable figure for attributable copper production in the next year, be it sulphide concentrate, oxide concentrate or cathode, Edzi. I thought project M was Munkoyo and it was deemed 'new' as we had decided to exercise our option to buy the license. We are buying only 51% of project G so there will obviously be some split in profits here. The investment in expanding the sulphide circuit at Sable (which eventually will not be taking Roan's sulphide material) suggests to me that there is plenty of sulphide in M and G but that is only a guess.
I agree there is something brewing and I suspect this is related to refining capacity. All our original attention was on Chambishi but the recent RNS and interview point to a refinery at Roan. If this comes about in a couple of years we might be in a position to finance this but for anything sooner I am pretty sure we would need a wealthy partner!
Edzi, my understanding of the situation is 12kt of cathode at Sable and they are extending capacity to include 4kt of copper solution. I am assuming the majority if not all of Roans solution will go to Sable initially to upgrade. That is until the modules are in place at M&G. Then their output will fill Sable, leaving Roans production to go direct to market. At that point production will be circa 25kt, but until then Roan and Sable will be pretty much doubling up. So M&G to feature in 6-12 months. From the RNS , broker note and interview hints its looking very likely they plan to add a refinery at Roan. If they go down this route, i just wonder how big a facility they would build?
Jonah/Mikie
Thanks for your response, where did you manage to read the broker note as I can't get it. If possible can you put a link onto the board. I agree with everything you are saying, but why could they not state that at Roan it will be Sulphide because if you listen to the podcast and the roast boys talking figures they are assuming its going to make a fortune and they alluded to Oxide
Leon said the priority short term is to secure copper feed in Zambia (presumably before some other chancers muscle in) - if that's the priority then they must be making plans for where all of this material is going to be processed and there will be a cost - if it involves IRH then they obviously can't say anything. If it's in the planning stage then it's market sensitive and needs to be tied down so, again they can't say anything.
Keeping things simple - as things stand chrome/pgms profit pay company overheads only (pessimistic view).
Sable brings in $80m per annum starting in a few months. Roan sell into market and pile low grade product on the floor, brings in say $20m per annum (pessimistic view).
Profit in about 4 months time is $100m per annum, at a p/e of 8, gives us $800m valuation. 3.8x current market cap giving a share price of 27p.
Allowing for dilution (warrants, options, further resource purchases in chrome and copper) and timeline slippages denting share price rises then we should be at 15p to 20p by January IMO. Going to do my final top up and look the other way for a while - going on holiday next week and thereafter it's time for my wife's cancer treatment which we have just found out may be more intensive than we thought - this time going to let the shares sit in our accounts as the sp is not elevated but depressed. Enjoy the sun whilst it shines everyone, all will be revealed in the fullness of time.
Part of the smoke and mirrors game! Roast guys say a number to Leon, he never answers!
Leon said in the H1 investor presentation that Roan was expected to have 60% of output going to Sable to produce cathode... then later corrected himself and said 60% would be sulphide concentrate. In a way it's largely irrelevant how much is oxide and how much is sulphide because they are talking about 25,000 tonnes of CONTAINED copper. If they were talking about tonnes of concentrate it would be a different story.
Obviously as we know capacity does not necessarily equate to production, Inyoni has a capacity of 10,500 PGM ounces / quarter but last quarter it only produced 8,339 PGM ounces. This highlights that when you are processing feed of different grades and chemical compositions, it's not possible to put an exact number on the production.
Good morning everyone,
My take on it for what it is worth:
16k from Sable but might take up to 6 months to achieve this target so 8k for second half. I will estimate 4k for the first half. 12k for the year. I like the estimated gross margin of 5k.
Roan output to be part of Sable production assume Mikie's 4k is right. Leaving 5k to be sold into the market. Total of 17k for next year from these two assuming everything goes to plan and no more delays and nothing from IRH.
17k at 4k/5k ton gross margin is $68/$85 million for copper next year. Interesting to see what the copper forecast will be from JLP next year (would be nice if they actually hit one). Good they are putting a video out of Roan in action social media is a valuable tool they can use when RNS not needed.
Throw in a similar amount from chrome and pgms and we could be looking at $130/$150 million gross margin for next year. Looks very tasty.
Edzi, Seis kindly posted the broker note. Look at his recent comments.
Mikie
I can't find it other than he posted a small paragraph on what it said, unless that was it
I believe that is it Edzi. Begins “ Here it is”
Here it is Northern:
"Project Roan – the large plant capable of feeding Jubilee’s Sable cathode – concentrate plant has been bult and is now being commissioned with full utilisation expected in July 2024. Although delayed this is a perfect test bed for the roll out of similar plants as part of the LG project with Abu Dhabi based IRH – Jubilee’s partner in this project. Jubilee also announces the tying up of two more copper open pit projects to supply copper ore for upgrade with a total of $3.6m being paid by way of the issue of 36.2m Jubilee shares. Project “M” is set to produce 25ktpm grading 3-4% copper (due online in Q3 CY24) – Jubilee will own 95%. Project “G” will produce 20ktpm grading 3-4% copper (due online in Q4 CY24) – Jubilee will own 51%. Both these new projects, together with existing ore sources, should see Jubilee produce up to 25kt/yr of copper in cathode/concentrate. 16kt through Sable (mostly cathode) with the rest, at the moment, for sale within Zambia. This will make Jubilee a flexible producer of scale.
WHI View: We applaud Jubilee’s effort in securing additional feed in Zambia. With its own production capacity due to be filled and some material available for sale, presumably in Zambia, it creates even more impetus, in our opinion, for Jubilee to sort out additional processing facilities so it can secure the value upgrade to copper for itself. We will put all our forecasts under review pending this data as we assess its implications. "
As Seis says, what it is, oxide, sulphide, cathode doesn't matter because they are talking about contained copper not the format it is in when they talk about tonnage.
Hi Gotreal
Thanks for that post, but so I understand , when you say contained copper then the difference between sulphide and oxide then the price will be the same as selling oxide as I thought oxide was cheaper because it hasn’t been refined
It's more costly to refine sulphide than oxide (according to Leon) so the additional refining cost is taken into account when buying concentrate.
I'm not sure what's happened to Jubilee's much vaunted non-smelting (thet is to say leaching) sulphide refining process. We seem to have gone a bit quiet on that one.
Kalan,
Thanks for sharing your thoughts ref JLP. What I was more struck by was hearing that your wife's cancer may be more intensive than you thought. I feel for you both and wish you all the best as you go through this difficult time. My thoughts and prayers are with you both.
Very best wishes,
Prof