Jupiter Mines has been on the radar since Exxaro paid ~A$1bn to acquire the majority 50.1% stake in the Tshipi Borwa manganese mine in South Africa through the acquisition of shares held by Ntsimbintle Holdings and OM Holdings (ASX:OMH).
At the same time it paid the equivalent of 31.7c a share to take a 19.99% stake in Jupiter, the owner of the other 49.9% of the mine, a regular dividend payer that has the cost base to survive down swings in the manganese cycle. Even with a 43% bump on the day the deal was announced, Jupiter’s shares are still trading at just 19c today for a market cap of $363m.
“It’s so glaringly obvious,” Delroy said.
“(Exxaro have) just paid the same sort of value for the other part of the joint venture. “In order to operate that asset with full discretion, they need to take control of Jupiter. It’s a glaringly obvious fact.
“It’s such an off-the-radar commodity in an off-the-radar jurisdiction at an off-the-radar company. That to me would be the absolute standout in this market.”
Delroy says JMS is trading “substantially below what the clear natural owner has indicated they are willing to pay”.
But even if he is “completely wrong”, Delroy noted shareholders get to receive a dividend in the mean time if Exxaro takes its time.
JMS Price at posting:
19.0¢ Sentiment: Buy Disclosure: Held
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