TIDMJLP
RNS Number : 7242B
Jubilee Metals Group PLC
06 June 2023
Jubilee Metals Group PLC
Registration number (4459850)
Altx share code: JBL
AIM share code: JLP
ISIN: GB0031852162
("Jubilee" or "the Company" or "the Group")
Dissemination of a Regulatory Announcement that contains inside
information according to UK Market Abuse Regulations. Not for
release, publication or distribution in whole or in part in, into
or from any jurisdiction where to do so would constitute a
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jurisdiction.
EXPANSION OF CHROME AND PGM FOOTPRINT
Jubilee Metals Group PLC (AIM: JLP; Altx: JBL), a leader in
diversified metals processing, with operations in Africa, is
pleased to announce a new partnership agreement for its PGM and
chrome operations in South Africa ("the Agreement").
Highlights
-- Jubilee expands its operational chrome footprint by a further
360 000 tonnes per annum processing capacity targeting an
additional 200 000 tonnes chrome concentrate and 10 000 oz PGM feed
to Inyoni, through a new partnership agreement.
-- The new partnership establishes a long-term relationship
directly with a producing mining operation on the western limb of
the Bushveld Complex, offering Jubilee greater exposure to the
potential earnings of the chrome produced through Jubilee's
renowned efficiencies.
-- Under the terms of the Agreement, Jubilee has committed to
upgrade the existing brownfield processing facility at the mine, by
retrofitting Jubilee's proven process solution ("the Plant"), to
reach an annualised processing capacity of 360 000 tonnes of
run-of-mine ("ROM") per annum by end June 2023.
-- The accelerated upgrade of the Plant has already commenced by
leveraging off available processing infrastructure at Jubilee's
current chrome operations.
-- Jubilee has the option to further expand the processing
facility to reach 720 000 tonnes per annum (producing an expected
390 000 tonnes per annum of chrome concentrate).
-- Jubilee has budgeted a capital investment of US$8 million to
complete the Plant, which will be funded through Jubilee's own
cashflows and balance sheet.
-- Under the terms of the Agreement, Jubilee's potential
earnings per tonne of chrome concentrate produced, represent a
five-fold increase over existing toll treatment terms (toll
agreements delivering a 4% margin at today's prices).
-- The Agreement is in line with the Company's growth target of
reaching an annualised production rate of 2 million tonnes (in
excess of 60% increase) of chrome concentrate over the next 24
months.
-- Chrome prices continue to remain strong, balancing weaker PGM
prices which supports Jubilee's strategy to produce a diverse
basket of commodities.
-- In addition, Jubilee has continued the roll-out of emergency
back-up power to its operations reaching 60% of its total chrome
processing capacity which provides the feed to the PGM
operations.
STATEMENT FROM LEON COETZER, CEO:
"Jubilee's proven processing excellence continues to attract
partnerships with large mining companies seeking best-in-class
operational processing groups.
"This new partnership agreement presents a more integrated
long-term relationship with an existing chrome producer that will
offer a stronger integration of the processing solution with the
source of the material ensuring a long-term stable production
profile. Under this new template agreement, Jubilee is offered a
much greater exposure to the earnings derived from the sale of
chrome concentrate.
"At current market prices, the Agreement offers the potential
for Jubilee to increase its current chrome earnings margins per
tonne of chrome concentrate produced by nearly five-fold compared
with the existing chrome toll agreements which achieves only 4% at
today's prices.
"We aim to expand our South African operational footprint by 65%
over the next 24 months to reach nearly 2 million tonnes of chrome
concentrate annually as we continuously strive to enhance our
earnings.
"At our Zambian copper operations, current expansion continues
to progress and remains in line with guidance. I look forward to
providing further detail on the implementation of the Zambian
copper strategy in due course as the results from the testing and
design work are finalised."
Overview
The Jubilee chrome operations in South Africa play a key role in
driving the performance and growth of the PGM operations. Chrome is
recovered first from the chrome and PGM-bearing ore before being
processed further to recover the PGMs at the Inyoni facility. The
high efficiencies achieved by Jubilee's chrome operations not only
produce better quality and more chrome product, that attracts
chrome producers to Jubilee's operations, but also provides a
cleaner PGM-rich feed that is more amenable to the PGM recovery
process.
To date, Jubilee has contracted its chrome operational capacity
predominantly on a fixed chrome margin contract by tolling various
chrome producers' materials while retaining the majority of the
earnings from the PGMs recovered.
As Jubilee looks to expand its chrome and PGM production by
entering into new long-term partnership agreements, Jubilee intends
to position itself as a stronger participant in the revenues from
the sale of the produced chrome concentrates. This offers Jubilee
greater exposure to the chrome market fundamentals while retaining
the protection of the increased processing efficiencies and the
revenues of the PGMs recovered from the tailings of the chrome
facilities. At current market prices the new contract offers the
potential to increase Jubilee's margin per tonne of chrome
concentrate produced by approximately five-fold.
The key term of the new Agreement establishes a 6-year initial
partnership that may be renewed for a further 4 years. Under the
Agreement, Jubilee is appointed exclusive process solution provider
and committed to retrofit and operate an existing 360 000 tonnes
per annum chrome processing facility, located adjacent to the
chrome ore producer, while holding the option to expand the
operation to a 720 000 tonne per annum facility. Jubilee targets to
complete the expansion, to 720 000 tonne per annum, within 12
months of commencing operations at the retrofitted facility. The
PGM rich tails produced will be processed at the expanded Inyoni
facility.
Under the new Agreement Jubilee will process the ROM ore and
produce chrome concentrate and a PGM rich tailings. The earnings
derived from the sale of the chrome concentrate and PGMs produced
from the PGM rich tailings, will be allocated based on the majority
of the PGM earnings retained by Jubilee while participating in the
chrome earnings at a significant level (equivalent of five times
current levels).
Jubilee has recently completed the initial retrofitting of the
360 000 tonne per annum facility to resemble Jubilee's existing
operations and has commenced commissioning of the facility. The
Jubilee projects team expects to reach the initial 360 000 tonne
capacity within 12 months, with the combined potential to add a
further 390 000 tonnes per annum of chrome concentrate increasing
Jubilee's total potential to 1.4 million tonnes per annum.
Jubilee has continued to roll out power back-up solutions at its
chrome operations as a preventative measure to the continued power
interruptions in South Africa. The back-up power solution will
address 60% of Jubilee's installed chrome processing capacity by
end of June 2023.
Chrome prices remain robust with strong demand from China
coupled with constrained supply from South Africa. PGM prices
remain under pressure, but the lower PGM basket prices are in part
buffered by the buoyant chrome prices.
6 June 2023
FOR FURTHER INFORMATION VISIT WWW.JUBILEEMETALSGROUP.COM OR
PLEASE CONTACT:
Jubilee Metals Group PLC Tel: +27 (0) 11 465 1913
Leon Coetzer
PR & IR Adviser - Tavistock Tel: +44 (0) 20 7920 3150
Jos Simson/ Gareth Tredway
Nominated Adviser - SPARK Advisory Tel: +44 (0) 20 3368 3555
Partners Limited
Andrew Emmott/ James Keeshan
Joint Broker - Berenberg Tel: +44 (0) 20 3207 7800
Matthew Armitt/ Jennifer Lee/ Detlir
Elezi
Joint Broker - WHIreland Tel: +44 (0) 20 7220 1670/
Harry Ansell/ Katy Mitchell +44 (0) 113 394 6618
JSE Sponsor - Questco Corporate Advisory Tel: +27 (0) 11 011 9207
Pty Ltd
Alison McLaren
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