Good Morning,
Jubilee Platinum (JLP), a company whose share price has
bounced, allowing for the platinum price and overall industry outlook. In
support of the share price movinement, JLP put out an announcement confirming financing discussions are
progressing, "almost" all the financing is there, but better,
the surface treatment returns are a whopping 30%. This may be so, but based on
what calculations? See below...
The Platinum Surface Projects target to process 80,000
tons per month of platinum containing surface material delivering an estimated
production of 42,000 ounces of PGM's per annum. The Platinum Surface
Projects are expected to achieve an IRR in excess of 30% net of taxation.
One is fully aware of the efficiencies of the ConRoast
process and how this benefits recoveries. How has a NOMAD (SPARK Advisory
Partners) signed off on this IRR expectation? Based on what numbers? What is
the platinum price assumption? $950/oz ? What is JLP's expectations of the PGM
prices? What is the prill split*? Admittedly, JLP’s outlook is a a lot better than previously, although is JLP a company where the assets/tech should
be valued not the management?
The acquisition of Nuaire by PolyPipe (PLP) is very good
for both businesses. The market, is wise to rate it on a number of levels
including the purchase price and earnings enhancements. Not often that deals
are conducted at levels that are sensible in today's markets.
It’s rare to read a bankable feasibility study (BFS) on AIM
with some sensible assumptions. Recognition has to go to Scotgold Resources's
(SGZ) Cononish
Gold and Silver Project, Having wanted a cheeky short (intraday) on SGZ
previously, the company have to raise some cash but financing on the back of
the BFS looks more positive. SGZ, post financing is likely to look like it has potential. These sort of BFS numbers make financing a lot easier.
With amusement, when one was looking for the Appendix to the BFS, unless SGZ have gone into printing, the perhaps would be wise to give
their correct company website in announcements. SGZ’s website is http://www.scotgoldresources.com.au/ not
as quoted, http://www.scotgold.com/
(printing company).
Yet more Fortescue Metals Group (FMG) speculation, last time it was Baosteel and CITIC Group. This time round its China's Hebei Iron & Steel Group and Tewoo Group (separately). Over to the FIRB (Foreign Investment Review Board). Being both state owned entities and FGM wanting to derisk minority stakes at mine level or the rail and ports assets, there may be a good chance of a deal, but do not expect anything to be concluded at speed. Hebei would perhaps be the favourite, but does Tewoo's need to diversify/distance itself from Real Estate...?
FXPO noted, but limited time.
Atb Fraser
*Prill split, is platinum group metal ratios of production including PT (Platinum), PD (Palladium),, RH (Rhodium), AU (Gold), PGE (Platinum Group elements), RU (Ruthenium) and IR (Iridium). Note: PGE, RU and IR are often excluded from the prill split.
