It's been all go at Jubilee Platinum this year. Having successfully bid for Braemore Resources, you might have thought it had done enough for a while - but it's now announced a tie-up with Sylvania Resources, too, changing the game plan and potentially bringing forward commercial exploitation of its key Tjate prospect.
If you'd looked at Jubilee back in 2006-7 you would have seen a whole cupboardful of different prospects in South Africa and Madagascar, though it was already becoming evident that Tjate was the flagship prospect. Now, the focus is firmly on developing Tjate, while the chrome and nickel interests in Madagascar have been curtailed in order to concentrate on getting Tjate into production.
Jubilee owns 63% of Tjate in the eastern Bushveld of South Africa, which has an estimated 70m ounce resource of PGM and gold - a combined indicated and inferred resource of 13.25m tonnes of ore at a combined grade of 5.24g/tonne. That suggests a sales value of £19 billion, before expenses [1] ; the NPV of Tjate was put at USD 800m back in 2007, on estimated production of 262,000 ounces a year, and that was before the latest update to resources [2] .
The scoping study carried out in 2007 showed it could be economically feasible to build a mine at Tjate, at a cost of around $470m, producing a mix of platinum with nickel and copper. The primary platinum resource there would support large scale open pit mining.
One research report went as far as to suggest that the company could be worth getting on for £600m. [3] However, the shares fell back rapidly after reaching a peak of 125p in mid 2007, as it was unclear where the financing would come from.
The geology looks good - Tjate is downdip of existing productive mines, Marula and Twickenham. It also looks to have a high contained value per tonne of ore, second only to Northam, and well ahead of other mines such as Amplats and Eastplats [4] , while being a comparatively shallow resource it should have lower costs per tonne than most [5] - it's 600 to 1,200 metres in depth compared to as much as 2,000 metres at Northam and Impala deeps, and against an average 1,800 metres at the majors' new shafts.
So far, the…
