How do you rate this vs Jubilee? JLP now producing already, seemingly with sale proceeds coming through to keep investing in expanding existing processing facilities (Roan and Sable)? Obviously mkt cap quite different but almost like one has spent the set up costs already (or most of it).
I own both. I think JLP is also sorely undervalued - though different propositions. If I had to bet, I'd say Asiamet is going for the asset sale in the short term, and Jubilee is going for dividends over the longer term.
JLP's assets and cash more than cover its market cap now (assuming the SA asset sale goes through shortly)....up to Leon to deliver value from here.
I'm defo not an expert (hence needing your great writing for guidance!), but I've been invested in SLP and more recently JLP. Tharisa produce both chrome and PGMS, recently they announced plans for underground mining at their Tharisa mine with costs only slightly above their current annual CAPEX spend, which extended their life of mine at Tharisa, whilst in theory improving grades (argument being that as they get much deeper with open pit mining the cost of removing waste just gets higher and higher vs underground mining going straight for the high quality reef).
In the background they've been spending on a vast new mine, Karo in Zimbabwe, with debt financing on the horizon (they've spend a big portion of the equity spend of the project). With higher PGM prices, cash flow should be good, so Karo and the debt finance should be announced relatively soon.
If both parts go ahead as planned, you end up with a large PGM and chrome producer with two great mines, at current £300m mkt cap (year end 2024 revenue was $721m with PBT of $118m).
I'd very much appreciate your thoughts on it (both potential and risks). As an aside, SLP should have cracking quarterly results next week. 100% agree with your comment re JLP - bit of patience and Leon to deliver (even half of the 25k he's promised) and it looks pretty good (even if we have to wait a couple of years). Thank you again for all your posts and taking the time to engage, very much appreciated (also wasn't wanting to hijack your Asiamet post, apologies if it feels that way, I'd actually looked at them on the back of your October review, my main concern was the grades relative to other copper miners and CAPEX required being somewhere in the middle, ie. Not big enough for a big player, but beyond the reach of smaller ones, but I have very little experience or understanding on all of this stuff).
I've had a brief look - no red flags on the surface. PGM pricing is recovering nicely as well. I'd say you have two risks right now - execution (I don't know management, so can't comment much on this) - and potentially profit taking continuing at this level, though that's a short term concern.
I do think that management everywhere tend to undersell the costs of underground capex (and opex) - much like a public sector project, costs tend to overrun.
The other thing is debt finance - even with a buffer built in, if anything goes wrong during the build, it can become a big issue very quickly. I'd watch out for a large contingency reserve in the financing, and also check what shareholder outcomes look like should more money be needed mid construction of either Tharisa's expansion or Karo's build.
Finally consider the plan should chrome/PGM prices start falling again. What's the breakeven basket price - and your plan if it falls below it.
Thank you very much for your time and response. Scenario of lower PGM/chrome prices is a bit bleak if heaps of debt and lower margins... (and management undersell dev costs). Maybe one to watch before piling in too heavily!
I’d be worried about political risk, I remember Churchill Mining from many years ago, think they had their project stolen by corruption in Indonesia (from memory). Ruined that share. I’m sure only reason Mankayan project in Philippines (with superior NPV) hasn’t been developed sooner, is down to political risk. I realise it is now being progressed by Blackstone!. I maybe totally wrong - just don’t underestimate corruption threat.
Yes, but then that's to an extent political risk is baked into the share price. If this were in Australia, it would easily be worth twice as much in market cap. I know Mankayan well (if you're a regular reader, I've been in Bezant for a couple of years).
Asiamet though is de-risked because of DOID's heavy involvement. If it's in their interest to see it progressed, I suspect it will be.
How do you rate this vs Jubilee? JLP now producing already, seemingly with sale proceeds coming through to keep investing in expanding existing processing facilities (Roan and Sable)? Obviously mkt cap quite different but almost like one has spent the set up costs already (or most of it).
I own both. I think JLP is also sorely undervalued - though different propositions. If I had to bet, I'd say Asiamet is going for the asset sale in the short term, and Jubilee is going for dividends over the longer term.
JLP's assets and cash more than cover its market cap now (assuming the SA asset sale goes through shortly)....up to Leon to deliver value from here.
I covered JLP in depth not long ago here https://thatstocksguy.substack.com/p/jubilee-metals
Thanks, yes, I've added to JLP since your previous article in August. Feels like patience is all that is required....Thanks also for your AMRQ posts.
Have you had a chance to look at Tharisa (both underground plans and also Karo development)?
Nope - sell it to me.
I'm defo not an expert (hence needing your great writing for guidance!), but I've been invested in SLP and more recently JLP. Tharisa produce both chrome and PGMS, recently they announced plans for underground mining at their Tharisa mine with costs only slightly above their current annual CAPEX spend, which extended their life of mine at Tharisa, whilst in theory improving grades (argument being that as they get much deeper with open pit mining the cost of removing waste just gets higher and higher vs underground mining going straight for the high quality reef).
In the background they've been spending on a vast new mine, Karo in Zimbabwe, with debt financing on the horizon (they've spend a big portion of the equity spend of the project). With higher PGM prices, cash flow should be good, so Karo and the debt finance should be announced relatively soon.
If both parts go ahead as planned, you end up with a large PGM and chrome producer with two great mines, at current £300m mkt cap (year end 2024 revenue was $721m with PBT of $118m).
I'd very much appreciate your thoughts on it (both potential and risks). As an aside, SLP should have cracking quarterly results next week. 100% agree with your comment re JLP - bit of patience and Leon to deliver (even half of the 25k he's promised) and it looks pretty good (even if we have to wait a couple of years). Thank you again for all your posts and taking the time to engage, very much appreciated (also wasn't wanting to hijack your Asiamet post, apologies if it feels that way, I'd actually looked at them on the back of your October review, my main concern was the grades relative to other copper miners and CAPEX required being somewhere in the middle, ie. Not big enough for a big player, but beyond the reach of smaller ones, but I have very little experience or understanding on all of this stuff).
I've had a brief look - no red flags on the surface. PGM pricing is recovering nicely as well. I'd say you have two risks right now - execution (I don't know management, so can't comment much on this) - and potentially profit taking continuing at this level, though that's a short term concern.
I do think that management everywhere tend to undersell the costs of underground capex (and opex) - much like a public sector project, costs tend to overrun.
The other thing is debt finance - even with a buffer built in, if anything goes wrong during the build, it can become a big issue very quickly. I'd watch out for a large contingency reserve in the financing, and also check what shareholder outcomes look like should more money be needed mid construction of either Tharisa's expansion or Karo's build.
Finally consider the plan should chrome/PGM prices start falling again. What's the breakeven basket price - and your plan if it falls below it.
Overall though, looks like a solid opportunity.
Hi Charles,
Thank you very much for your time and response. Scenario of lower PGM/chrome prices is a bit bleak if heaps of debt and lower margins... (and management undersell dev costs). Maybe one to watch before piling in too heavily!
I’d be worried about political risk, I remember Churchill Mining from many years ago, think they had their project stolen by corruption in Indonesia (from memory). Ruined that share. I’m sure only reason Mankayan project in Philippines (with superior NPV) hasn’t been developed sooner, is down to political risk. I realise it is now being progressed by Blackstone!. I maybe totally wrong - just don’t underestimate corruption threat.
Yes, but then that's to an extent political risk is baked into the share price. If this were in Australia, it would easily be worth twice as much in market cap. I know Mankayan well (if you're a regular reader, I've been in Bezant for a couple of years).
Asiamet though is de-risked because of DOID's heavy involvement. If it's in their interest to see it progressed, I suspect it will be.