REG - Jubilee Metals Group - EXPANSION OF CHROME AND PGM FOOTPRINT

Jubilee MetalsAnnouncement

06/06/2023 07:00

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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")

 

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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
(http://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 Partners Limited  Tel: +44 (0) 20 3368 3555

 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 Pty Ltd     Tel: +27 (0) 11 011 9207

 Alison McLaren

 

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