TIDMJLP
RNS Number : 4677W
Jubilee Metals Group PLC
12 December 2023
Jubilee Metals Group PLC
("Jubilee" or "the Company" or "the Group")
Registration number (4459850)
Altx share code: JBL
AIM share code: JLP
ISIN: GB0031852162
Strategic Investment in a Historical Waste Rock Dump in
Zambia
Jubilee, a diversified and leading metals recovery business with
a world-class portfolio of projects in South Africa and Zambia, is
pleased to announce that it has secured one of the largest copper
waste rock assets on surface in Zambia and has formed a strategic
partnership with Abu Dhabi based International Resources Holding
RSC Limited ("IRH"). IRH is affiliated to the Abu Dhabi
conglomerate, International Holding Company PJSC ("IHC"), the most
valuable listed holding company in the United Arab Emirates, and
the second-most valuable in the Gulf Cooperation Council
region.
Highlights
-- Jubilee secures one of the largest copper waste rock assets on surface in Zambia.
-- Estimated at more than 350 million tonnes of waste rock
material on surface. Early results from preliminary surface
sampling indicate zones with grades higher than 1.5% copper ("Waste
Rock Project").
-- Jubilee's technical services team has commenced extensive
resource definition and process technical review with the aim of
completing the project implementation detail and timeline within
the next 60 days.
-- Processing by Jubilee's newly developed modular copper units
aims to produce in excess of 20 000 tonnes per annum of copper at a
cost of below US$4 000 per tonne of copper from this historical
waste rock dump.
-- Overall project costs including mining equipment and project
infrastructure are likely to be around US$50 million.
-- Jubilee has the capability to construct and commission all
modular copper units within a 12-month period and aims to commence
within Q1 CY2024.
-- Jubilee executed a binding funding term sheet with IRH to
form a dedicated special purpose vehicle ("SPV") through which both
the acquisition of the copper waste rock asset and implementation
of the processing solution will be funded.
-- Under the funding term sheet IRH undertakes to provide all
capital required by the SPV through a combination of equity in the
SPV and shareholder loans.
-- Jubilee will be appointed by the SPV to design, implement and
operate the mining and processing solution.
Leon Coetzer, CEO says :
" The Transaction marks a significant milestone on our journey
in Zambia, catapulting our copper expansion in the region. The
Waste Rock Project, anchored by this substantial resource, will
fast-track the rollout of our modular copper processing units in
the country with the potential to far exceed our goal of reaching
25, 000 tonnes of copper per annum.
"The binding funding term sheet that we have executed, affords
Jubilee the opportunity to aggressively pursue its copper growth
strategy in partnership with a prestigious group such as the
IRH.
"This partnership combines Jubilee's unique technical and
operational experience with the strategic in country copper focus
and financial support of the IRH. The strategic significance of
this partnership is further highlighted by the recently announced
selection of IRH as the preferred strategic equity partner for
Zambia's Mopani Copper Mines asset, which owns the Mufulira Slag
Dump Project recently awarded to Jubilee.
"Jubilee and IRH share similar values in their commitment to
sustainable investment through broad based community involvement
and prioritising local partnerships. I look forward to working with
IRH as our partner in bringing this exciting project to full
fruition."
ESG commitment
Jubilee's unwavering commitment to responsible mining,
demonstrated by our copper processing modules that integrate
eco-friendly methodologies, efficient waste rock management, and
the rehabilitation of historic waste rock dumps accumulated over
decades of copper mining in Zambia. Furthermore, the Waste Rock
Project will provide employment opportunities and strengthen the
local economy in Zambia.
12 December 2023
For further information please contact:
Jubilee Metals Group PLC Tel: +27 (0) 11 465 1913
Leon Coetzer (CEO) / Neal Reynolds
(CFO)
PR & IR Adviser - Tavistock Tel: +44 (0) 20 7920
3150
Jos Simson/ Gareth Tredway
Nominated Adviser - SPARK Advisory Tel: +44 (0) 20 3368
Partners Limited 3555
Andrew Emmott/ James Keeshan
Joint Broker - Berenberg Tel: +44 (0) 20 3207
7800
Matthew Armitt/ Jennifer Lee/ Detlir
Elezi
Joint Broker - WH Ireland Tel: +44 (0) 20 7220
1670/
Harry Ansell/ Katy Mitchell +44 (0) 113 394 6618
JSE Sponsor - Questco Corporate Tel: +27 (0) 11 011 9207
Advisory Proprietary Limited
Alison McLaren
About Jubilee Metals Plc
Jubilee Metals Plc is a low-cost, diversified producer,
specialising in the recovery of metal from previously overlooked
resources, such as unprocessed historical waste rock, run-of-mine
materials and tailings in South Africa and Zambia. The Company's
low-capex, modular processing facilities are deployed close to
these various types of material, producing high grade concentrates
for sale or further refining to finished metal at the Company's
downstream facilities. Production currently consists of chrome,
copper and platinum group metals (PGMs). The modular processing
facilities offer a platform for growth and the rapid expansion of
its operational footprint. Jubilee's success is derived from
operational excellence, a highly experienced management team and a
pioneering Technical Development Centre.
Annexure 1
Waste Rock Project Overview
The Waste Rock Project is located in Zambia's Northern
Copperbelt and is estimated to hold in excess of 350 million tonnes
of material. Copper results based on historical exploratory
sampling of the material as well as preliminary surface sampling
conducted by Jubilee, indicates the existence of extensive zones
with grades higher than 1.5% copper. The Waste Rock Project aligns
with the targeted roll-out of Jubilee's modular copper processing
units.
Jubilee has furthermore executed a binding funding term sheet as
well as a framework and joint venture agreement with IRH to
establish a SPV to fund the acquisition and implementation of the
Waste Rock Project.
This Waste Rock Project is a significant step towards Jubilee's
ongoing commitment to sustainable extraction and value creation in
the region. The Transaction, and the strategic partnership with
IRH, marks the culmination of 4 years' of work by the Jubilee team.
Jubilee's reputation and relationships in Zambia, coupled with its
proven expertise in metals processing, in alignment with IRH's
strategy to build a portfolio of strategic mineral assets, has
created this unique opportunity to generate value from these
historical waste dumps.
Transaction summary
This Waste Rock Project strategically leverages the substantial
copper content within the waste material deposited on surface from
historical mining activity. The project offers a unique long-term
production capacity that supports Jubilee's copper growth targets.
It aligns with Jubilee's strategic goals for regional expansion and
resource optimisation in Zambia, effectively turning what was
traditionally considered industry waste into a valuable asset.
The waste rock resource was formed over 60 years' of mining
where the overburden material and ore regarded as too low grade at
the time, was discarded onto the waste rock dump in favour of
processing higher grade copper ore.
Jubilee's technical services are preparing a preliminary mining
plan and have modelled the initial implementation of four
processing modules. Alternatives of whether the project is
developed by sequential construction of copper processing modules
or on an accelerated construction schedule are being
considered.
Below, we outline preliminary operational and financial
estimates that provide an approximate sense of the scale of
investment required for the Waste Rock Project's
implementation.
The Transaction secures the sole right to Jubilee (which it
expects will be ceded to the SPV with IRH) to purchase all rights
pertaining to the waste rock material for a total consideration of
US$30 million, which includes a combination of mining rights and
other services currently owned by a private company and its
shareholders.
The total value of US$30 million is payable over 18 months from
the effective date of the Agreement. An initial payment of US$1.75
million, followed by quarterly payments commencing 75 working days
("Initial Period") after the first payment. Jubilee retains the
right to cancel the transaction during the Initial Period in the
event of any material changes being discovered in the disclosures
made.
Jubilee intends to complete an extensive drilling and sampling
campaign to improve the resource definition. Processing development
work will also be continued within the Initial Period. The focus
will be to expedite the project implementation and commencement of
copper production.
Funding and SPV
Under the terms of the binding term sheet and the framework and
joint venture agreement, the parties commit to the establishment of
a new SPV to house the Waste Rock Project. Subject to due
diligence, it is intended that all rights to the Waste Rock Project
will be ceded from Jubilee to the SPV.
The SPV will be managed through a joint executive committee with
equal representation by Jubilee and IRH, with Jubilee appointing
the chairman of the executive committee.
It is expected that the SPV will acquire the Waste Rock Project
through funding provided by IRH and will reimburse Jubilee for all
costs incurred directly related to the development of the Waste
Rock Project as well as any funding provided towards the
acquisition of the Waste Rock Project prior to the implementation
of the SPV.
Additionally, IRH will supply the necessary funding to the SPV
for the implementation of the Waste Rock Project, contingent upon
the approval of the executive committee and the implementation
schedule prepared by Jubilee. The funding provided by IRH to the
SPV will take the form of a shareholder loan. Repayment by the SPV
of the shareholder loan is contingent upon the SPV first achieving
a threshold cumulative net earnings with the SPV's repayment of the
shareholder loan limited to a maximum percentage of net earnings,
ensuring that the majority of earnings are distributed to the
equity holders of the SPV.
Jubilee will assume responsibility for the day-to-day operations
of the SPV and will provide technical expertise and services at a
mutually agreed-upon fee. Jubilee will be appointed by the SPV to
develop, design, implement, and operate the Waste Rock Project.
Ownership of the SPV will be held jointly, with Jubilee owning a
minimum of 30%.
According to the terms outlined in the binding funding term
sheet, IRH and Jubilee commit to completing the implementation of
the SPV and associated appointments before 30 January 2024 with
funding provided within five business days thereafter subject only
to IRH completing its due diligence.
Preliminary estimates of production and financial metrics
The preliminary Waste Rock Project overview assumes a resource
definition based on the initial surface and historical sampling
campaigns. The resource definition will be better defined following
Jubilee's extensive sampling and process modelling undertaken
during the Initial Period.
The figures below serve only as indicative numbers to the
potential that the resource holds based on the assumptions and test
work undertaken by Jubilee's technical services department.
The initial phase of the project involves selective mining to
feed four copper processing modules, each treating 50,000 tonnes
per month. Overall project costs including mining equipment and
project infrastructure are likely to be around US$ 50 million.
Preliminary estimates of production and financial metrics indicate
the potential to produce approximately 2000 tonnes of copper per
month from four processing modules at an estimated cost of US$3 800
per tonne of copper. The production cost per copper tonne assumes
that 60% of copper production is refined to produce copper cathode
with the remainder either toll refined or sold into the market.
An accelerated construction schedule for all four modules could
generate economies of scale and significant cost reductions. The
project timeline for implementing all four modules depends on the
sequencing of their installation, but if pursued simultaneously,
they could be completed within a 12-month period from the
commencement of construction.
The processing modules produce a combined copper concentrate for
refining to copper cathode at Jubilee's Sable Refinery in Kabwe or
delivery to a partnered toll refiner.
Phase two of the project aims to incorporate the technological
breakthroughs developed by Jubilee in partnership with its
technology suppliers. There will be a specific focus on the
processing of historical tailings and discards from the waste rock
project.
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