Jubilee Platinum almost halved its losses in the six months to the end of December 2010, but investors are clearly unimpressed with shares in the Aim-traded company trading close to a 12-month low.
The twin problems facing investors are the uncertainty surrounding when the company will start mining its majority-owned Tjate platinum acreage on the Eastern Bushveld and, secondly, a number of "cautionary announcements" from the company as demanded by the Johannesburg Stock Exchange. Not surprisingly, they are being cautious, even when the announcements can be linked to positive developments.
Jubilee's income currently comes from smelting ferroalloys in a 6.5 megawatt (MW) arc furnace at Middleburg in northwest South Africa. Next month that smelting capacity rises by 5MW with capacity fully contracted. The company has also acquired majority control of a gas-fired power generator on the Middleburg site for around £2.5m. It has conditional rights to 33MW of power from the Sasol gas refinery which crucially minimises the dependence on the national grid.
"Exceptional results" on the Tjate infill drilling programme suggests - according to broker finnCap - that platinum mining might start in late 2015. The broker forecasts smelting turnover to rise to £10.2m in 2012.
JUBILEE PLATINUM (JLP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 27.125p | MARKET VALUE: | £69.6m | |
| TOUCH: | 27-27.25p | 12-MONTH HIGH: | 41.75p | LOW: 26.125p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 34p* | NET CASH: | £9.99m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 0.24 | -2.25 | -0.82 | nil |
| 2010 | 3.57 | -1.25 | -0.77 | nil |
| % change | +1,388 | - | - | - |
Aim: Mining *Includes intangible assets of £86.1m, or 34p a share. | ||||
