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#NGE Initial Position
stale
Added 2 years ago

NGE, a small LIC has initiated a new position in JMS buying 9m shares at $0.225 as revealed in their latest monthly report.

"Under a long-term FOB Mn price forecast of US$4.00/dmtu we value JMS at ~A$0.46 per share under the current 3.4Mtpa production rate, suggesting ~150% upside to the month-end price of A$0.185. Based on these assumptions, Jupiter’s 49.9% share should produce FCF (net of JMS corporate overhead) of ~A$90m against an EV of ~A$300m. If Tshipi can ramp up production to 4.5mtpa by FY25, we value JMS at ~$0.52 per share; JMS’ share of FCF would grow to ~A$115m." 

Download their November monthly report to see their full commentary on their investment thesis (1 and half pages).

#Boardroom cleanout
stale
Added 2 years ago

3 Dec 21: The well regarded chairman Brian Gilbertson who was previously the CEO of BHP was not reelected at the general meeting in October and then shortly after Priyank Thapliyal was removed as CEO.  Both were large shareholders in JMS.  This has been the work of AMCI Group, one of the large and longstanding shareholders of the company. AMCI’s Managing Director of Australia, Patrick Murphy has been appointed to the board.

The statement from the board on 1 Dec 2021 was:- 

“Jupiter is committed to growing shareholder value and has been actively reviewing the Company’s strategy while initiating a robust search process with Korn Ferry to appoint a new Chair and Chief Executive Officer. Jupiter’s strategy will continue to prioritise maximising value and cash returns from its participation in the world class Tshipi operation, while evaluating attractive opportunities to grow and diversify. Jupiter will engage with shareholders in more detail on its refreshed strategy and team as these key hires are made.”

As a result of all this share price hit 12 month lows of $0.18, It could be Gilbertson and Thapliyal selling out of the company too now that they have been removed and have no reason to keep their shareholdings. 

We’ll have to see whether the previous CEO’s accusations of AMCI or other groups trying to takeover the company without paying a premium come true or not.

As a shareholder, pretty disappointed. Previously, JMS has paid out significant dividends. I'm concerned this might change with new management or a significant acquisition will be made with a dilute capital raise.

#Move to remove MD
stale
Added 3 years ago

The boardroom spill with the departure of two independent directors has been followed by a move to remove the managing director, Priyank Thapliyal by a major shareholder AMCI Group.  

Not sure of AMCI’s intentions.  Thapliyal has been buying a considerable amount of stock on market in the last few years (>$2.5m) and seems to have been doing an o.k job.

The fact that the remuneration report was rejected by a vote of over 95% indicates that there is significant dissatisfaction amongst the major shareholders.

The uncertainty is weighing on the share price.

#Substantial Holding Change
stale
Added 3 years ago

Today a substantial holder notice was lodged Ntsimbintle Holdings taking their substantial holding from 5.46% to 19.90%, the maxium limit before a takeover must be lodged.

JMS has 49.9% ownership of the Tshipi manganese mine in South Africa which is the main asset of JMS.  Ntsimbintle holds the other 50.1%.  

Curious as to what Ntsimbintle's intentions are.

SUBSTANTIAL

16 Apr 21: 7 Oct 20: Ntsimbintle Holdings / Safika Resources 19.90% from  5.46%

7 Oct 20: Ntsimbintle Holdings / Safika Resources 5.46% Initial

 

#Chart of the Day
stale
Added 3 years ago

JMS' share price has been dropping significantly.  The volumes suggest that a fund is selling without much concern for the impact on the share price.

The fact that the Juno Iron Ore demerger being delayed rather than being abandoned should have been a positive.

If this is a fund dumping, then it could provide an opportunity.

There has been significant insider buying.

#Technical Analysis
stale
Added 3 years ago

6 Jan 20: Significant step up in JMS from $0.28 on 18 Dec to high of $0.35.  Has broken through resistance at $0.32.  

#Director Trading
stale
Added 4 years ago

Some very significant buying from directors.  Gilbertson was previously CEO of BHP. >+$1m of buying.

20-05-21  JMS  Mende +200,000 for $57,755 [145.85m; 110.11m] @ $0.289

20-05-22 JMS Gilbertson +148,537 & +1.13m for $40,648 & $323,386 [1.48m shares] @ $0.285

20-05-21  JMS  Mende +2.8m for $770,311 [145.85m; 109.91m] @ $0.275

20 Jan 20: Gilbertson +200,000 @ $61,000 ($0.305) 200,000 shares

#Bull Case
stale
Added 5 years ago

1 Aug 19:

Jupiter Mines (JMS) owns 49.9% beneficial interest in Tshipi Mine. Single largest manganese mine in South Africa and one of the 5 largest in the world.

Mangement have primary focus to return cash to shareholders.

Listed: Apr 2018

Shares: 1,959m

Price: $0.40

Mkt Cap: A$784m

Attr Cash: $79m

EV: $748m

FY19 EBITDA: $291m

FY19 NPAT: $189m

EV/EBITDA FY19: 2.6x

Dividend Yield at $0.40: 19%

CEO Priyank owns 57m shares (2.93%)

 

Growth Strategy

  1. Tshipi Expansion
  2. Increasing stake in Tshipi
  3. Regional consolidation

Manganese is mission critical feedstock to the global steel industry with no substitute.  Every tonne of steel requires 10-15kg of manganese alloy

Global crude steel production increased from 1.73b tonnes to 1.81b tonnes in 2018 (+4.5%).  Chinese production increased from 871m tonnes to 928m tonnes (+6.4%)

Manganese supply facing challenges at a time of increased sources of demand

Supply:

  • Chinese managese ore (lower grade) supply has fallen significantly since 2016 due to environmental restrictions as well as depletion.  South Africa's manganese ore supply is constrained by its logistics and port capacities

Demand:

  1. Moderate growth in the steel industry
  2. One Tshipi mine required every few years
  3. New regulations on Chinese rebars requires more silico-manganese unit consumption in steel
  4. Future upside from EV batteries.  Manganese could potentially replace the traditional cobalt and nickel as the cathode in a lithium-ion battery.  Manganese is cheaper and more abundant than both cobalt and nickel.

Q1 FY20 Tshipi FOB cost of production - US$2.13 per dmtu

PRODUCTION

FY16: 1.54Mt

FY17: 2.27Mt

FY18: 3.64Mt

FY19: 3.45Mt

SEABOURE ORE

2017: 14m mtu (6.7m from SA - approx 50%).  Tshipi has 9% of seabourne market.

 

DIVIDENDS

10 Oct 18: 5c

21 May 19: 2.5c