REG - Jubilee Metals Group - Company Update

Jubilee MetalsAnnouncement

16/05/2022 07:00

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RNS Number : 5332L  Jubilee Metals Group PLC  16 May 2022

 

Jubilee Metals Group PLC

("Jubilee" or the "Company")

Registration number (4459850)

AltX share code: JBL

AIM share code: JLP

ISIN: GB0031852162

 

 

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Jubilee Metals Group PLC

("Jubilee" or "the Company" or "the Group")

 

Company Update:

Investment Programme Delivers Significant Growth Across PGM and Copper
Operations

 

Jubilee Metals Group PLC, a leader in metals processing with operations in
Africa (AIM: JLP/Altx: JBL), is pleased to provide a performance update of its
new and expanded fully integrated South African Inyoni PGM and Chrome
Operations and its Zambian Southern Copper Strategy, which involves
integrating the Sable Copper and Cobalt refinery with the newly constructed
copper concentrator, Project Roan. This new and significantly enlarged
operational footprint follows an investment programme implemented over the
past 12 months of      £ 39.5 million (ZAR 786 million).

 

HIGHLIGHTS

 

South Africa

 

·    Jubilee's new and expanded Inyoni Operations ("Inyoni") is already
exceeding design throughput targets reaching 86 000 tonnes per month of
chrome and PGM containing run-of-mine ("ROM") feed, together with 40 000
tonnes of PGM containing historical tailings material, placing Jubilee on
course to achieve its PGM ounce production target of 44 000 ounces per annum
through its 100% owned Inyoni alone (previous max design capacity 30 000
ounces), replacing any reliance on existing PGM recovery joint ventures

·    The Company's significantly increased chrome ore beneficiation
capacity to in excess of 220 000 tonnes per month (previously 140 000 tonnes
per month) of ROM feed and tailings, allows the Company to sharply increase
the production of chrome concentrates from the various feed streams as an
offset cost to its PGM production costs; Jubilee targets to produce 1.2
million tonnes of chrome concentrate per annum

·    Inyoni continuous to ramp-up production rates targeting full
production rates during May 2022 and delivered 8 018 PGM ounces from Inyoni
operation in calendar Q1 CY2022, an increase of 75% when compared with
Inyoni's average production rate of the previous two quarters despite
refilling of the operational pipeline after start-up.  With the completion of
the ramp-up if Inyoni during May 2022 Jubilee expects to achieve the 43 000
PGM ounce guidance for the financial period end to June 2022

·    On a chrome by-product credits basis, Jubilee's net cost to produce
an ounce of PGM during Q1 CY2022 was US$ 433 per ounce excluding transport
costs of US$ 198 per ounce, which transport cost will be reduce significantly
once the Company's eastern limb expansion strategy to establish a PGM
processing footprint in the eastern limb is successfully implemented

 

Zambia

 

·    Significant milestones achieved in the delivery of the Southern
Copper Refining Strategy in Zambia, which targets to produce up to 12 000
tonnes of copper units per annum including a cobalt by-product from certain
cobalt-containing feed streams:

o  Project Roan commissioning activities are nearing conclusion with the
official hand-over of the new copper concentrator to the operational team. The
ramp-up of the concentrator is expected to reach design capacities during July
2022, which targets the processing of 830 tonnes of copper in concentrate per
month for refining at Sable

o  Project Roan has to date created local employment opportunities to almost
600 people as part of the construction and operational team. The project has
brought investment, employment and opportunities for local service providers
to the region

o  Jubilee's Project Roan and Sable Refinery combined has offered employment
and contractor opportunities to more than 800 people, the most of which are
long term, while Jubilee has prioritised local supply of services often
working with local companies to assist in developing the required services to
create a sustainable support infrastructure

o  In addition to the copper refining capacity at Sable, the construction of
a cobalt refining circuit at the site is underway and expected to commence
commissioning during June 2022

o  Initial design capacity able to produce up to 1 200 tonnes of cobalt per
annum which has the potential to add significant revenues to the Southern
Copper Refining Strategy (current cobalt prices c. US$ 81 000 per tonne
(source LME))

 

Leon Coetzer, CEO of Jubilee, commented: "The Jubilee team was bold in its
plans to expand and optimise the South African and Zambian operations, however
a confident, but prudent approach to the deployment of our £ 39.5 million
investment programme has already resulted in the delivery of significant
results for the Group.

 

"Rolling out our business case across multiple countries, operations and
commodities has enabled us to de-risk, capture economies of scale, and also
provided exposure to numerous value points throughout the recovery and metal
processing chain. In addition, our expanding production profile and the
economies of scale it provides, offers insulation from the inflationary
pressures smaller operators are facing, enabling Jubilee to maintain a cost
per PGM ounce produced when fully accounting for the chrome by-product
production credits resulting in a net cost of below US$ 450 per PGM ounce when
excluding transport cost. Our eastern limb expansion strategy holds the
additional benefit of significantly reducing transport cost of material from
this region which makes up the bulk of current transport cost.

 

"I am extremely proud of the Group's performance over the past 12 months,
which is testament to the dedication and innovation of our operational teams.
Despite the various issues which we have faced over the previous two years,
including, at times, intense and prolonged supply chain disruptions mostly due
to Covid, the Jubilee team has risen to the challenge and has delivered on its
objectives on schedule, and on budget.

 

"Crucially, and in line with our goals to promote sustained, inclusive
economic growth, the Southern Copper Refining Strategy has resulted in
significant job creation, with total jobs filled in Zambia reaching near 800
during the last 12 months. We have prioritised the sourcing of skills and
services from our local communities and have, in many instances, partnered
with local firms to assist in their growth and development to offer a
sustained service to our projects. With the completion of the construction of
Project Roan we now look to accelerate our investment program into the
Northern Refining Strategy targeting the Luanshya, Kitwe and Mufulira area.

 

"As we emerge from this phase of significant growth and sustained financial
performance, and I look forward to providing further updates as our various
new projects hit their targeted output in the coming weeks and will be fully
reflected in the next financial reporting period."

 

Further Information

 

South Africa

During early 2021 at Inyoni, the Company's primary PGM recovery circuit,
Jubilee launched a project to create a new fully integrated and significantly
expanded Inyoni operations. By way of a reminder, the project would deliver a
fully integrated multi feed chrome and PGM beneficiation circuit that
comprised:

•    a new run-of-mine chrome beneficiation plant ("OBB") with a design
capacity of 80 000 tonnes per month (previous decommissioned facility
historically averaging 45 000 tonnes per month) of mined chrome and PGM
containing ore from various suppliers to Jubilee;

•    an expanded fine chrome beneficiation circuit able to process up to
45 000 tonnes per month (previous 35 000 tonnes per month) of historical
chrome and PGM tailings;

•    a renowned ultra-fine chrome ("UFC") processing plant capable of
processing up to 30 000 tonnes per month to maximise the recovery of the
chrome prior to recovering the PGMs; and

•    expansion of the Inyoni PGM circuit capable of processing up to
75 000 tonnes per month (previous 45 000 tonnes per month) of tailings
produced by the chrome beneficiation circuits which increases Inyoni's PGM
capability to 44 000 PGM ounces per annum

 

The new Inyoni operations would, on completion, target the processing of
multiple feed sources to maximise the extraction of chrome as a by-product to
produce a high quality PGM rich feed to the new upgraded and expanded Inyoni
PGM plant, representing a first for the industry. The expanded operations
would also reduce Jubilee's reliance on JV arrangements, such as the Windsor
PGM JV, to grow its financial and operational performance.

 

The total allocated capital for the integrated chrome and expanded PGM
recovery facilities was £ 20.5 million (ZAR 408 million) targeted to be
implemented over 11 months to carefully plan the commissioning of the new and
expanded chrome and PGM circuits with the existing operations.

 

The project culminated in the commissioning of Jubilee's proven UFC facility
in February 2022 following the commissioning of the new expanded Inyoni PGM
circuit during November 2021, bringing to completion the new fully integrated
chrome and PGM recovery circuits. The UFC facility is able to recover
ultra-fine chrome from the PGM feed stream further enhancing the PGM feed
grade, while producing additional saleable chrome as a by-product at virtually
no additional operating cost.

 

The success of this new world class facility is delivering early results in
the operational performance for Q1 2022 with Inyoni's chrome and PGM
production increasing materially. The OBB facility has exceeded its throughput
targets achieving a record processing of 86 000 tonnes of ROM ore in a single
month since its commissioning in October 2021 adding to the existing Windsor
and Windsor 8 chrome beneficiation plants to reach a processing record of 190
000 tonnes of ROM ore in a single month.

 

At Inyoni alone, chrome production remains on target. PGM ounce production
continues to increase after first replenishing the in-process PGM pipeline
that was drained as part of the capital project. Inyoni is expected to reach
its 3 500 PGM ounce monthly target for May 2022 and delivered 8 018 PGM ounces
in Q1 2022, an increase of 75% when compared with Inyoni's average production
rate of the previous two quarters despite refilling of the operational
pipeline after start-up.

 

The increased throughput and production rates of the integrated Inyoni
Facility has the added benefit of further dilution of cost to cushion the
current inflationary pressure on operating costs. Cost per PGM ounce produced
excluding transport cost is US$ 669 (transport cost currently US$198 per PGM
ounce) and when fully accounting for the chrome by-product production credits
results in an effective cost per PGM ounce produced of below US$ 450
(excluding transport cost). Jubilee's targeted eastern limb PGM expansion
strategy will significantly reduce transport cost of feed material from this
region while expanding overall PGM production.  Jubilee is in advanced
discussions to secure an existing mothballed PGM processing footprint capable
of being repurposed by Jubilee.

 

With the Inyoni ramp-up expected to be completed during May 2022, the Company
expects to achieve its guidance of 43 000 PGM ounces for the full financial
period despite the interruptions caused by the implementation of the new
integrated and expanded Inyoni operations.

 

Zambia

The first phase of Jubilee's copper strategy in Zambia includes the
implementation of its Southern Copper Refining Strategy which targets to
produce up to 12 000 tonnes of copper units per annum including a cobalt
by-product from certain cobalt containing feed streams.

 

The strategy integrates the upgraded Sable Refinery with Project Roan, a new
copper concentrator processing both ROM copper ore as well as tailings to
produce copper concentrates for refining at Sable (10 000 tonnes per annum),
which complements the existing supply of third-party feed to Sable Refinery (2
000 tonnes per annum). The integrated Southern Copper Refining Strategy's
capital allocation was c. £ 19 million (ZAR 378 million).

 

Jubilee's project execution team broke ground for the construction of the new
copper concentrator, Project Roan, in June 2021 and, despite the challenges
caused by the COVID 19 pandemic and its effect on supply chains, the team was
able to commence testing of certain equipment within seven months and
completed all construction activity within 11 months, a remarkable
achievement. Commissioning activities have been further frustrated with the
lack of availability of certain electronic equipment, largely due to increased
supply chain pressures out of Europe. Through innovative engineering by the
team, these have been overcome and commissioning activities remain on track to
commence ramp-up of the plant during May 2022. Project Roan is expected to
complete the ramp-up of the operations, which targets 830 tonnes of copper per
month, during July 2022.

 

In addition to the copper refining capacity at Sable, Jubilee has approved the
implementation of a cobalt refining circuit at Sable able to produce up to 1
200 tonnes of cobalt per annum. The new cobalt circuit is expected to commence
commissioning during June 2022. At current prices of cobalt of c. US$ 81 000
per tonne of cobalt, this exciting project holds the potential to add
significant revenues to the Southern Copper Refining Strategy.

 

Crucially, and in line with Jubilee's goals to promote sustained, inclusive
economic growth, the Southern Copper Refining Strategy has resulted in
significant job creation, with total jobs filled in Zambia reaching near 800
during the last 12 months.  Jubilee has prioritised the sourcing of skills
and services from local communities and have, in many instances, partnered
with local firms to assist in their growth and development, which also offer a
sustained service to our projects.

 

16 May 2022

 

For further information visit www.jubileemetalsgroup.com
(http://www.jubileemetalsgroup.com)   or contact:

Jubilee Metals Group PLC

Colin Bird/Leon Coetzer

Tel +44 (0) 20 7584 2155 / Tel +27 (0) 11 465 1913

 

Nominated Adviser - SPARK Advisory Partners Limited

Andrew Emmott/James Keeshan

Tel: +44 (0) 20 3368 3555

 

Broker - Shard Capital Partners LLP

Damon Heath/Erik Woolgar

Tel +44 (0) 20 7186 9900

 

Joint Broker - WHIreland

Harry Ansell/Katy Mitchell

Tel: +44 (0) 20 7220 1670/+44 (0) 113 394 6618

 

JSE Sponsor - Questco Corporate Advisory Proprietary Limited

Sharon Owens

Tel: +27 (11) 011 9212

 

PR & IR Adviser - Tavistock

Jos Simson/ Gareth Tredway/Charles Vivian

Tel: +44 (0) 207 920 3150

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