Jubilee Metals Group plc engages in the exploration, evaluation, and mining of mineral properties in South Africa, Australia, Madagascar, Mauritius, Zambia, and the United Kingdom. The company operates through Base Metals Beneficiation, Business Development, and Exploration and Mining segments. It explores for platinum group metals, such as platinum, palladium, rhodium, ruthenium, iridium, and gold, and chrome, lead, zinc, vanadium, copper, and cobalt ores. The company holds interests in the Inyoni Operations located in the Bushveld complex, South Africa; Dilokong project located in the Limpopo Province, South Africa; Windsor SA project located in the Western Bushveld complex, South Africa; Kabwe project located in the Kabwe, Zambia; and Tjate project located in the Eastern Bushveld complex, South Africa. It is also involved in the beneficiation of precious metals; and process consulting, development, and implementation of process solutions targeting liquid and solid waste streams from mine processes. The company was formerly known as Jubilee Platinum Plc and changed its name to Jubilee Metals Group PLC in December 2017. Jubilee Metals Group PLC was incorporated in 2002 and is based in London, the United Kingdom.
The news which spiked Jubilee’s share price by 30% in a week at the end of August 2021, leaving it flat for the month, was a new business deal in Zambia which will dramatically increase copper production capacity in a surprisingly cheap way. If the copper price stays around the present levels, then this will improve the earnings of JLP.L significantly.
The copper price has retraced and is trading at a significant support level. The chart looks positive for a rally in copper but any opportunity in JLP.L is suitable only for traders and investors that have a proven track record in managing risk.
A weekly chart of JLP.L is shown above with the price data in candlestick format over the past two years of trading. The green line study above the price shows the VectorVest valuation of the company which is significantly higher than the current share price.
In the window just below the price, the blue study shows that forecast Earnings per share (EPS) is rising and this is the engine that’s been driving the share price upwards. Over the past two years, EPS has risen from 0p to 3p.
On VectorVest, the Relative Safety (known as RS) of the earnings stream is ranked as good. This rating is typical of a mining company which are subject to the fluctuations in commodity prices. The rating would not be high enough to qualify for inclusion into the VectorVest Worry Free Trading plan. The opportunity is for the more adventurous investor.
The metric measuring long-term share price appreciation potential in relation to a AAA rated corporate bond (known as RV) is showing an excellent value. JLP.L has a forecast Earnings Growth Rate (GRT) of 48% which VectorVest considers to be excellent.
Technically JLP.L has trended higher from June 2020 to May 2021. Since May 2020 the share has retraced in line with commodity prices. The share recently found support on the chart where previous resistance became a new buying level. This is bullish behavior with the share jumping around 30% from that support level on the news from the Zambian operation stated above. This move up occurred on excellent volume which is also bullish behavior.
Since the up week of the 23rd of August 2021, the share has retraced from the high of that week. Technically the weekly Stochastic Indicator is shown in the bottom window of the chart above. The Stochastic is rising from an oversold level and is showing a technical pattern know as reverse divergence. The latter has a solid track record in predicting a continuation of the trend which is positive for the share price of JLP.L. The divergence between the price and the Stochastic has been running for a year which adds to its significance.
In summary, JLP.L looks set to grow earnings strongly over the next year. The share is markedly undervalued and technically is on a Hold recommendation on VectorVest. The price and volume action over the last year is also extremely bullish.
Adventurous traders should watch the share carefully and consider a purchase when the VectorVest recommendation changes from Hold to Buy.