Sylvania Resources Ltd (LON:SLV) and Jubilee Platinum (LON:JLP), both platinum specialists working in the Bushveld Igneous Complex of South Africa, announced today that they have entered into a binding framework agreement. This agreement firms up a partnership that was established November 2009 where Jubilee agreed to process some of Sylvania’s previously uneconomic, low-grade platinum group metals (PGM) concentrates through its ConRoast smelting process.
Under the terms of the new agreement, Sylvania and Jubilee will form two new companies: a Smelting Company and a Tailings Processing Company. These two new companies will allow for further processing and treatment of low grade and high chrome concentrate resources. An exploration program undertaken by Sylvania in 2009 is intended to inform the development of the new Smelting company.
The ownership structure of the Smelting company will be 70% and 30% to Jubilee and Sylvania respectively, whereas the Tailings Company will be owned equally, 50:50, by the two mining companies.
Both parties have agreed to all the terms and conditions necessary to form the two new companies and expect the collaboration process to be completed within 3 months, at which point both of the new facilities will commence operations.
Colin Bird, CEO of Jubilee, remarked,
"These new companies combine the joint operating capability of Jubilee and Sylvania to take PGM containing dump material into metal. The ongoing arrangement provides the platinum industry with a formidable total capability solution for the processing of PGM tailings and high chrome concentrates."
In terms of licensing, Jubilee is expected to provide an irrevocable licence of the ConRoast Technology to the Smelting Company. Likewise, Sylvania will provide its knowhow and other technology in relation to tailings treatment to the Tailings Company.
Both Jubilee and Sylvania will be responsible for the management of the Tailings company. In contrast, the Smelting company will be managed by Jubilee alone, in return for a management fee related to its profitability.
Terry McConnachie MD of Sylvania commented on the synergies and the potential for future platinum exploration under the agreement:
"The formation of the joint venture companies offers Jubilee and Sylvania the benefit of fully exploiting the synergies offered by a mine to metal strategy free of the traditional constraints imposed on high chrome, or relatively low grade concentrates. This in turn is a significant step in unlocking the value of…
