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JLP recovery and rerating

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JLP recovery and rerating

Post Tue Jul 28, 2015 3:41 pm

http://webcasting.brrmedia.co.uk/broadcast/139483

also excellent summary of the webcast from Yoda:

http://www.iii.co.uk/investment/detail? ... d=11709376

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

summary:
1) Tailing projects
- bank funding term sheets approved. waiting for sign off (expect RNS very soon)
- no dilution, as will be funded by bank financing and existing cash
- at the moment, 2 tailing projects. JLP already in process to acquire more. Third tailing project coming soon
- tailing projects exceeds 10years life
- current tailing projects - Production in H1 2016 expected
- low cost (cost around $400 - $500)
- these two tailing projects alone worth GBP 130m (my own approx)
profit = (1000 price -500 cost)x10 years x 42000 ounces per year = USD 210m (around GBP 130m)

2) Tjate
- mining right has "effectively" been approved- just waiting sign off (any days now)
- potential partners (with major firm) already been engaged by JLP. once mining licence confirmed, JV news will be very soon.
- reminder = NPV for Tjate around $1.4bn - $1.6 billion
- chinese could come in, Mitsubishi name were mentioned?
londonz
 
Posts: 662
Joined: Mar 2012

Re: JLP recovery and rerating

Post Thu Jul 30, 2015 9:55 pm

Aberdeenman
http://www.iii.co.uk/investment/detail/ ... d=11714214

This share reminds me (in some ways, more of that below) of when I was piling into Amur, pre license, in low single digits, when everyone was saying mad to be buying, they will never get a license, Russia, sanctions blah blah yawn.

Well, I travelled down to London last week to see a presentation by the CEO of Amur, and spent a few hours talking to him afterwards in the bar. I am more convinced now than ever that my decision was right, and obviously they were granted the license.

My point is, I was prepared to take a big risk on Amur, and it paid off, from its low to high in 12 months it made a gain of 1642%.

Now from my point above, it should be noted I was invested in Amur for a long time, but topped up massively when low, but following on from that:

I know a lot of peeps have felt a lot of pain in this share, but getting in or stocking up massively when the price is very low can give spectacular results, with 1600% gains millionaires are made.

The risk with Amur was (to a lot of people) greater than here, the company (JLP) have a clear path to profit, multiple low cost, high margin projects, and a huge prize, which although it needs a lot of capital will bring huge rewards for investors, as the company have clearly demonstrated they are ahead of the pack in terms of their ability and technology.

Dilution, yes this may not get back to the highs seen before due to dilution, but we know there will be very little of that from now on.

All in all, I cannot see any major risk, for my risk appetite, it would seem a no brainer. Even with the commodity pricing and macro economic events, yes this will affect the bottom line, but in no way viability. Add to the mix the extremely low cost to produce then I cannot see any bar to risking my capital.

Going back to Amur, one last thing, I have been invested for over 5 years, it was an eternity waiting for that bl**dy license, what do we have here? A clear signal that the next licnense will be here in weeks and several other projects already under construction.


As I said a no brainer, IMV.


I do not invest in many companies, my strategy is to pick companies with very very high potential returns and invest, waiting as long as required and topping up on weakness. I am not long, as in time, in JLP, having got in at a very very favourable price, with a substantial holding at an average of 2.2p


Due to my relative youth on this board I would not dream of making myself out as more knowledgeable than some of the LTH's, I understand the work involved, so I will leave the NPV calcs to them, but I am anticipating a return of 500% minimum from here as being conservative, and this year.

The fact that derampers have shown up also is a positive, lets hope they are articulate enough to try counter my arguments, but on Aim, when these guys show up it is usually for a reason, and it is not to benefit the ordinary PI who is long.


My position is to still keep adding at these prices FYI.


Aberdeenman
londonz
 
Posts: 662
Joined: Mar 2012

Re: JLP recovery and rerating

Post Mon Oct 12, 2015 10:07 am

Tjate, one of the largest platinum/paladium mine in the world, about to be given mining licence to JLP, worth around $5bn

****************
from lse:

many major producers are watching JLP like hawk, and as soon as licence is granted, we should see several offers?? AQP which has much higher operating cost already been snapped. JLP next??

while platinum price is at the bottom (but is now slowly recovering), palladium price has been increasing rapidly (palladium price was around $800 in 2011 and dropped below $600 recently and now around $700 and continue moving up).

as a reminder, JLP has huge platinum and palladium reserves.

JLP website: Tjate mine consists of two parts
: Merensky= 8m oz (54% Pt, 29% Pd)
: UGS = 14m oz (37% Pt, 36%Pd)

so, the deeper section (UGS) has 36% Palladium ie 14mx0.36= 5m oz and even the shallower section Merensky has 29% palladium.

so, our palladium amount is huge and will benefit for any rise in palladium price (which even more so now that many are preferring gasoline engine compared to diesel engine. (note: palladium is used in gasoline engine and platinum in diesel engine)

nevertheless, diesel engine will still be in demand (despite slight setback) .

and as a reminder,
the NPV of 1.7bn calculated in the website is only for Merensky (and not including UGS).
so, thats mean, if NPV 1.7bn for 8m in Merensky, then for UGS would be 1.7/8*14 = 2.98bn

so, total Merensky+UGS = 1.7+2.98 = 4.7bn

ie, Tjare project = NPV $4.7bn !

note (at the time of writing)
price platinum per oz = $912
price palladium per oz = $711

once licence is granted, hopefully many major platinum will be keen to tap on huge Tjare resources.
londonz
 
Posts: 662
Joined: Mar 2012

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