Are you confident about the management from an ethical standpoint and their ability to execute on the plans? What has caused the share dilution from 2.1 Bn to 3 Bn from 2020?
It's a good question. The quick answer is the NAV per share has risen in those years from 5.4c to 8.5c per share i.e. despite additional shares there has been even more additional value. But what is the value? I went through the 4 Annual Reports and I'd recommend visiting the cash flow report on each of the 4 and consider the "investment" spend. That's basically why they have diluted shares. It's about £150m of investment spend.
What has £150m and 0.8bn additional shares provided? (And 4 years of Operational Cash Flow too)
2021 - Sable Copper Refinery acquired
2022 - Expansion of Inyoni PGM/Chrome Plant
- Build out Roan Copper Concentrator Plant
2023 - Expansion of Chrome - front-end modules
- Expansion of Copper - front-end modules
- Sorting out problems with Electricity and Water
2024 - Intellectual Property Processing (also in earlier years)
- Expansion of Chrome (modules)
- Expansion of Copper (Sable upgrade and Roan Front-End)
- Kitwe Copper Project
- Acquisition of 95% of Munkoyo Copper Open Pit Mine (Project M)
- Acquisition of 51% of Project G
- Mufilira Test Work
- Acquisition of Large Waste Rock Project
Post Period
- Project G increased 14% to 65%
- Sable Upgrade (25ktpa)
To conclude and to consider "ethics" and "ability to execute". On ethics they've done what they said they were going to do. To do so has required investment. There has been an element of bad luck (aka working in Africa) with power outages and disruption. Also the substantial PGM price fall wasn't entirely predictable. So I would say they appear to have acted honorably.
On ability to execute they have proven they are excellent engineers, have proven their "module front-end" strategy, and cost improvements via process excellence. JLP have also proven I think they can build a business. What remains unproven to some extent is Jubilee's ability to drive profits. Again there have been a lot of moving parts and progress hasn't always been as fast as investors expected. The share price reflects this. Platinum, Palladium and Rhodium are all beginning to show signs of price appreciation. Copper is at a decent price and Chrome of course is highly profitable.
So turning investment into profit is the next step and there's several reasons to think they will succeed.
Are you confident about the management from an ethical standpoint and their ability to execute on the plans? What has caused the share dilution from 2.1 Bn to 3 Bn from 2020?
Delta
It's a good question. The quick answer is the NAV per share has risen in those years from 5.4c to 8.5c per share i.e. despite additional shares there has been even more additional value. But what is the value? I went through the 4 Annual Reports and I'd recommend visiting the cash flow report on each of the 4 and consider the "investment" spend. That's basically why they have diluted shares. It's about £150m of investment spend.
What has £150m and 0.8bn additional shares provided? (And 4 years of Operational Cash Flow too)
2021 - Sable Copper Refinery acquired
2022 - Expansion of Inyoni PGM/Chrome Plant
- Build out Roan Copper Concentrator Plant
2023 - Expansion of Chrome - front-end modules
- Expansion of Copper - front-end modules
- Sorting out problems with Electricity and Water
2024 - Intellectual Property Processing (also in earlier years)
- Expansion of Chrome (modules)
- Expansion of Copper (Sable upgrade and Roan Front-End)
- Kitwe Copper Project
- Acquisition of 95% of Munkoyo Copper Open Pit Mine (Project M)
- Acquisition of 51% of Project G
- Mufilira Test Work
- Acquisition of Large Waste Rock Project
Post Period
- Project G increased 14% to 65%
- Sable Upgrade (25ktpa)
To conclude and to consider "ethics" and "ability to execute". On ethics they've done what they said they were going to do. To do so has required investment. There has been an element of bad luck (aka working in Africa) with power outages and disruption. Also the substantial PGM price fall wasn't entirely predictable. So I would say they appear to have acted honorably.
On ability to execute they have proven they are excellent engineers, have proven their "module front-end" strategy, and cost improvements via process excellence. JLP have also proven I think they can build a business. What remains unproven to some extent is Jubilee's ability to drive profits. Again there have been a lot of moving parts and progress hasn't always been as fast as investors expected. The share price reflects this. Platinum, Palladium and Rhodium are all beginning to show signs of price appreciation. Copper is at a decent price and Chrome of course is highly profitable.
So turning investment into profit is the next step and there's several reasons to think they will succeed.
OB