REG - Jubilee Metals Group - Operations Update for the 6 months to 30 June 2022
10/08/2022 07:00
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RNS Number : 4787V Jubilee Metals Group PLC 10 August 2022
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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Operations and Projects Update for the six months to 30 June 2022 (H2 FY2022)
Jubilee Metals Group PLC, a diversified leader in metals processing with
operations in Africa (AIM: JLP/Altx: JBL), is pleased to announce the
performance of its operations and progress on growth projects for the
six-month period to 30 June 2022. Figures in this announcement are unaudited
and exclude the effect of foreign exchange profits or losses.
Jubilee's key achievement during the period was the completion and early
results achieved of its c. £ 58 million (ZAR1.2 billion) investment programme
in South Africa and Zambia that has reshaped the company, provided expanded
production across PGMs, Chrome, Copper and Cobalt, and laid the platform for
the expected growth during the full FY 2023 period.
Key Achievements for H2 FY2022
· Jubilee successfully completed its c. £ 58 million (ZAR 1.2 billion)
investment programme to diversify and expand the Company's PGM, copper and
cobalt operational footprint
· In South Africa, construction and commissioning of the new 45% expanded
Inyoni operations were completed in March 2022 with an annualised nameplate
production capacity of 44 000 PGM ounces and a 1.2 million tonnes combined
chrome concentrate capacity (up 85%)
· Jubilee achieved increased production of 21 140 PGM ounces for the
six-month period (up 5% from the previous six-month period) despite planned
operational interruptions to complete the new Inyoni processing facility
· Notably 95% of PGM ounces was produced at the new Inyoni operations
during six-month period (compared to 75% in FY2021). This brings enhanced
economics to Jubilee and has mitigated the impact of softer PGM prices
· Early results from the new Inyoni operations have outperformed
expectations with a 34% reduction in PGM unit cost compared with the six-month
period ending December 2021, as the facility benefits from significantly
increased operational footprint and increased contribution from chrome
production
· The enlarged Inyoni delivered an increase in unit earnings per PGM
ounce of 12% compared with the six-month period ending December 2021, despite
the realised PGM basket price reducing 3% over the period
· In Zambia, Copper production increased 14% to 1 388 tonnes, over the
previous six-month period
· Southern Copper Refining Strategy for 12 000 tonnes per annum of
copper was brought onstream with the commissioning of the new Roan copper
concentrator and ramp-up of operations reached 80% of design capacity in
August 2022
Leon Coetzer, CEO, commented: "I am extremely proud of the Jubilee team's
performance, and I thank each one of them for their dedication and innovation
despite the various challenges, including at times, intense and prolonged
supply chain disruptions. The team has delivered a significantly expanded and
further diversified operational footprint which is already producing material
increases in output and efficiencies.
"The rationale for the investment to expand our Inyoni operations is best
illustrated by the simultaneous increase in not only the overall PGM
production but also the sharp increase in earnings generated per PGM ounce
despite softer metal prices. The past six months and especially the last
quarter has shown a sharp increase in PGM production and lower costs as Inyoni
achieved its full design capacity with the majority of the PGM production
stemming from this quarter. This performance underpins our target of reaching
44 000 PGM ounces per annum from our own facilities as more of our production
benefits from our renowned efficiencies.
"Equally in copper following a delayed start due to equipment deliveries, our
Project Roan reached 80% of design capacity during the first week of August.
This puts us on track to achieve our targeted 3 700 tonnes of copper over the
current six-month period ending December 2022. The increased production rates
are expected to further reduce our unit cost. With the delivery of Project
Roan, we are on track to reach 10 000 tonnes of copper for the full
twelve-month period ending June 2023, while we work to unlock the cobalt
potential.
"I am very excited by what the FY 2023 period holds. It offers tremendous
potential growth for our Company as it benefits from the foundation laid
during the FY2022 period, with the full exposure of our enlarged South African
operations as well as the commissioning of our new 12 000 tonnes per annum
Southern Copper Refining operations and the realisation of our cobalt
production."
OPERATIONAL KEY PERFORMANCE INDICATORS
COMBINED OPERATIONAL PERFORMANCE (UNAUDITED)
12 months to six months to six months to % change
KEY UNITS OF PRODUCTION Unit 30 Jun 2022 FY2022 30 Jun 2022 (H2) 31 Dec 2021 (H1) H2 vs H1
PGM ounces:
- Inyoni Oz 35 188 20 036 15 152 32%
- Third party JV Oz 6 268 1 104 5 164 (79%)
Total PGM ounces Oz 41 456 21 140 20 316 4%
Copper tonnes Tonne 2 604 1 388 1 216 14%
UNIT REVENUE
Revenue per PGM ounce $/oz 1 609 1 586 1 632 (3%)
Revenue per copper tonne $/t 9 195 8 903 9 527 (7%)
UNIT COSTS
Net cost per PGM ounce (after by-product credits chrome)(1) $/oz 447 358 540 (34%)
Net cost per copper tonne (after by-product credits cobalt) $/t 5 371 4 931 5 873 (16%)
UNIT EARNINGS(2)
Net earnings per PGM ounce $/oz 1 162 1 228 1 092 12%
Net earnings per copper tonne $/t 3 824 3 972 3 654 9%
COMBINED KEY FINANCIAL HIGHLIGHTS FROM OPERATIONS
· Operational earnings totalled £ 24 million (ZAR 480 million) for
the six-month period ending June 2022 (up 24% from the previous six-month
period)
· Revenue from operations totalled £ 76 million (ZAR 1.5 billion) for
the six-month period ending June 2022 (up 21% from the previous six-month
period)
· PGM unit cost of production reduced by 34% driven by increased PGM
operational footprint and increased contribution of chrome by-product credits
· The group cash and cash equivalents as at 30 June 2022, stood at £
16 million (FY2021 £ 19.6 million)
South African Operations
Operational Highlights
· South African operations maintained a strong safety performance over
the six-month period with 162 days worked without any LTI
· Jubilee's PGM operations delivered 21 140 PGM ounces of which 95% was
delivered by the expanded Inyoni operations for the six-month period. This
equates to an increase of 32% compared with Inyoni's previous best performance
of 15 152 PGM ounces
· Third party JV ounces decreased 79% as part of the strategy to
migrate to Inyoni only production
Operational Financial Highlights
· Early results from the expanded Inyoni operations exceed expectations
with a reduction of 34% in PGM unit cost of operations due to the increased
PGM processing capacity and a sharp increase in the contribution from chrome
by-product operations
· Net revenue from South African operations over the six-month period
increased to £ 67 million (ZAR 1.3 billion) up 21% from the previous
six-month period
· Net operational earnings from South Africa for the six-month period
reached £ 20 million (ZAR 400 million) maintaining a strong margin of 30% and
up 23% from the previous six-month period
Zambian Operations
Project and Operational Highlights
· Zambian operations maintained a strong safety performance achieving
124 days worked without any LTI
· 12 000 tonne per annum Southern Copper Refining Strategy brought into
operation with the integration of the newly commissioned Roan copper
concentrator with Sable Refinery
· Ramp-up of the Roan concentrator reaches 80% of design capacity at
the time of this announcement
· Copper tonnes sold during the six-month period as part of operational
trials increased to 1 388 tonnes, up 14% over the previous six-month period
Operational Financial Highlights
· Net revenue from Zambian operations increased to £ 10 million (ZAR
200 million) for the six-month period, up 16% from the previous six-month
period
· Net operational earnings from Zambian operations increased to £ 4.2
million (ZAR 84 million) up 30% from the previous six-month period
Prospects for FY2023
South Africa
· The new enlarged PGM and chrome operations have set the platform to
deliver 44 000 PGM ounces and 1.2million tonnes of chrome concentrate per
annum from Jubilee's own capacity. The PGM production benefits from the
increased efficiencies of this new enlarged facility, which is significantly
subsidised by the increased chrome production as highlighted by the results
for the H2 six-month period. FY2023 offers strong potential for growth in
earnings as it benefits from the full exposure of our enlarged South African
operations
· Jubilee continues to progress discussions to secure a further PGM
processing footprint in the Eastern Limb of the Bushveld (north-eastern region
of South Africa's chrome and PGM mining region). Jubilee has already secured
significant tailings resources with further expansion opportunities in the
area. Jubilee is reviewing the option to either secure a decommissioned PGM
facility that will be repurposed by Jubilee, or to construct a new facility in
the region
Zambia
· The Southern Copper Refining Strategy targets to produce 3 700
tonnes of copper within the first half of FY2023 ramping up to target 10 000
tonnes of copper for the full FY2023 year. If achieved this equates to a 284%
increase in copper output
· In addition, the Company looks to complete the testing and
commissioning of the cobalt circuit on the back of the completed ramp up of
Project Roan offering the potential of significant earnings contribution
· Jubilee's technical and projects team can now dedicate their focus on
the development and execution of the Northern Copper Refining Strategy
Please refer to the Appendices for a detailed breakdown of the performance
achieved during H2 FY2022.
10 August 2022
For further information visit www.jubileemetalsgroup.com
(http://www.jubileemetalsgroup.com/) or contact:
Jubilee Metals Group PLC
Leon Coetzer
Tel: +27 (0) 11 465 1913
PR & IR Adviser - Tavistock
Jos Simson/ Gareth Tredway/ Adam Baynes
Tel: +44 (0) 207 920 3150
Nominated Adviser - SPARK Advisory Partners Limited
Andrew Emmott/ James Keeshan
Tel: +44 (0) 20 3368 3555
Joint Broker - Berenberg
Matthew Armitt/ Jennifer Lee/ Detlir Elezi
Tel +44 (0) 20 3207 7800
Joint Broker - WHIreland
Harry Ansell/ Katy Mitchell
Tel: +44 (0) 20 7220 1670/+44 (0) 113 394 6618
Joint Broker - Shard Capital Partners LLP
Damon Heath/ Erik Woolgar
Tel +44 (0) 20 7186 9900
JSE Sponsor - Questco Corporate Advisory Proprietary Limited
Sharon Owens
Tel: +27 (11) 011 9212
APPENDICES
SUMMARY OF OPERATIONAL AND FINANCIAL PERFORMANCE
South African Operations
USD Pound Sterling
FY2022 6 months to end Dec 2021 6 months to end Jun 2022 % change Unit UNAUDITED Unit % change 6 months to end 6 months to end Dec 2021 FY2022
Jun 2022
PRODUCTION
35 188 15 152 20 036 32% oz Inyoni ounces sold oz 32% 20 036 15 152 35 188
6 268 5 164 1 104 (79%) oz Third party JV ounces sold oz (79%) 1 104 5 164 6 268
41 456 20 316 21 140 4% oz Total PGM ounces sold oz 4% 21 140 20 316 41 456
1 222 452 619 900 602 552 (3%) tonne By-product tonnes (chrome) tonne (3%) 602 552 619 900 1 222 452
FINANCIALS
REVENUE FROM OPERATIONS
66 703 33 164 33 539 1% $'000 PGM revenue £'000 6% 25 820 24 330 50 150
94 370 41 487 52 883 27% $'000 By-product revenue (chrome) £'000 34% 40 712 30 436 71 148
161 073 74 650 86 422 16% $'000 Net revenue £'000 21% 66 532 54 766 121 298
OPERATING COSTS
26 162 13 823 12 340 (11%) $'000 - Processing cost £'000 (6%) 9 500 10 141 19 640
4 654 1 534 3 120 103% $'000 - Transport costs Eastern Limb £'000 113% 2 402 1 125 3 528
82 103 37 102 45 001 21% $'000 - By-product costs (chrome) £'000 27% 34 644 27 219 61 863
112 919 52 458 60 461 15% $'000 Total PGM operating costs £'000 21% 46 546 38 485 85 031
OPERATIONAL EARNINGS
35 886 17 807 18 079 2% $'000 PGM earnings £'000 7% 13 918 13 064 26 982
12 267 4 385 7 882 80% $'000 By-product PGM earnings (chrome) £'000 89% 6 068 3 217 9 285
48 153 22 192 25 961 17% $'000 Net earnings from operations £'000 23% 19 986 16 281 36 267
FINANCIAL RESULTS PER OUNCE
1 609 1 632 1 586 (3%) $/oz Revenue per PGM ounce £/oz 2% 1 221 1 198 1 210
2 276 2 042 2 502 22% $/oz By-product PGM revenue per ounce (chrome) £/oz 29% 1 926 1 498 1 716
3 885 3 675 4 088 11% $/oz Net revenue per PGM ounce £/oz 17% 3 147 2 696 2 926
Operating cost per PGM ounce:
631 680 584 (14%) $/oz - Processing cost £/oz (10%) 449 499 474
112 75 147 96% $/oz - Transport costs Eastern Limb £/oz 107% 114 55 85
1 980 1 826 2 129 17% $/oz - By-product cost (chrome) £/oz 22% 1 639 1 340 1 492
2 723 2 583 2 860 11% $/oz Total operating cost per PGM ounce £/oz 16% 2 202 1 894 2 051
1 162 1 092 1 228 12% $/oz Net earnings per PGM ounce after by-product credit (chrome) £/oz 18% 945 801 875
447 540 358 (34%) $/oz Cost per PGM Ounce net of by- product credit (chrome) £/oz (30%) 276 396 335
Health and Safety
The South African operations maintained their record of no reportable
occupational health or environmental incidents over the six-month period.
The combined operations have achieved 162 days without a lost time injury
(LTI) with a lost time injury frequency rate (LTIFR) of 2.0. Over the period
217 128 tonnes of historical tailings were uplifted, processed and placed on a
modern tailings facility by the Jubilee tailings operations.
Operational Performance
In South Africa, Jubilee delivered on its strategy to maximize the processing
of historical tailings through its own operations, rather than utilizing the
processing capacity offered by third party processing facilities through
existing joint venture agreements. Jubilee's new Inyoni processing facility
significantly outperforms the efficiencies achieved at the third-party
facilities.
The PGM operational processing capacity has been increased by 45% to 75 000
tonnes per month which holds the potential to produce 44 000 PGM ounces per
annum. The expansion program included the expansion of the chrome processing
operations by approximately 80% to 250 000 tonnes per month which holds the
potential to produce 1.2 million tonnes of chrome concentrate per annum. The
chrome operations play an important role in Jubilee's PGM operations by not
only acting as a feeder system to the PGM operations but also subsidising the
PGM unit cost through the sales of chrome concentrate.
Jubilee achieved the production of 21 140 PGM ounces for six-month period.
Notably 95% of the PGM production stemmed from the new Inyoni operations,
exceeding Inyoni's previous best performance by 32%. Q4 of FY2022 saw a
significant jump in PGM production as the new Inyoni operations reached its
full design capacity. The enlarged facility benefits from the scale of
operations with the unit cash cost to produce a PGM ounce reducing to US$ 358
over the six-month period. The cash cost per PGM ounce for the six-month
period benefitted from the increased contribution from the sale of chrome
concentrate accounting for US$ 373 per PGM ounce or £ 6.1 million (ZAR 122
million).
While PGM production over the six-month period continued to be impacted by the
ramp-up of the new Inyoni processing facility, production of PGMs is expected
to continue to sharply increase as the new Inyoni facility operates at full
design capacity.
The Company confirms its guidance of 44 000 PGM ounces from own production for
FY2023 with an option to add a further 8 000 PGM ounces from third party
processing agreements dependent on stock availability.
Zambian Operations
USD
Pound Sterling
FY2022 6 months to end Dec 2021 6 months to end Jun 2022 % change UNAUDITED % change 6 months to end Jun 2022 6 months to end Dec 2021 FY2022
Unit Unit
PRODUCTION
2 604 1 216 1 388 14% Tonnes Copper tonnes sold Tonnes 14% 1 388 1 216 2 604
FINANCIALS
REVENUE FROM OPERATIONS
23 943 11 585 12 358 7% $'000 Copper revenue £'000 12% 9 514 8 499 18 013
441 - 441 100% $'000 By-product copper revenue (cobalt) £'000 100% 339 - 339
24 384 11 585 12 799 10% $'000 Net copper revenue £'000 16% 9 853 8 499 18 352
OPERATING COSTS
13 985 7 141 6 844 (4%) $'000 Total copper operating costs £'000 1% 5 269 5 239 10 508
OPERATIONAL EARNINGS
Copper earnings
By-product copper earnings (cobalt)
9 958 4 444 5 514 24% $'000 Net copper earnings £'000 30% 4 245 3 260 7 505
FINANCIAL RESULTS PER TONNE
9 195 9 527 8 903 (7%) $/t Revenue per copper tonne £/t (2%) 6 854 6 989 6 917
169 - 318 100% $/t By-product revenue per copper tonne (cobalt) £/t 100% 245 - 130
9 364 9 527 9 221 (3%) $/t Net revenue per copper tonne £/t 2% 7 099 6 989 7 048
3 824 3 654 3 973 9% $/t Net earnings per copper tonne after by-product credit (cobalt) £/t 14% 3 058 2 681 2 882
5 371 5 873 4 931 (16%) $/t Cost per copper tonne net of by- product credit (cobalt) £/t (12%) 3 796 4 308 3 905
Health and Safety
The Zambian operations maintained their record of no reportable occupational
health or environmental incidents over the six-month period. The combined
operations and projects have achieved 124 days without a LTI with a LTIFR of
2.9.
Operational Performance
Jubilee's copper strategy in Zambia includes, as its first phase, the
implementation of its Southern Copper Refining Strategy which targets to
produce up to 12 000 tonnes (design capacity of 14 000 tonnes) of copper units
per annum including a cobalt by-product from certain cobalt containing feed
streams. The fully integrated Southern Copper Refining Strategy is a
significant step for Jubilee as it diversifies its processing footprint across
commodities and jurisdictions. It also holds the potential to significantly
grow Jubilee's earnings in a commodity such as copper supported by strong
fundamentals.
The strategy integrates the upgraded Sable Refinery with Project Roan, a new
copper concentrator processing both Run-Of-Mine 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). Total capital spent to end June 2022 to
deliver the integrated Southern Copper Refining Strategy's capital allocation
totalled c. £ 36.1 million (ZAR 721 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 eleven months which remains a
remarkable achievement. Despite a slight delay in start-up Project Roan has
reached a production throughput level of 80% of design capacity.
In addition to the copper refining capacity at Sable, Jubilee approved the
implementation of a cobalt refining circuit at Sable which at full design
capacity holds the potential to produce up to 1 200 tonnes of cobalt product
per annum. Testing and ramp-up of the cobalt circuit will follow the completed
Roan concentrator ramp-up to ensure stable feed to the circuit.
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 over 700
during the last twelve months. Jubilee has prioritised sourcing of skills and
services from its local communities and has in many instances partnered with
local firms to assist in their growth and development to offer a sustained
service to its projects.
Over the six-month period the Company sold 1 388 tonnes of copper at a unit
cost of US$ 4 931 per tonne of copper cathode. The majority of the production
stems from operational trails as part of ensuring operational readiness at the
Sable Refinery for Project Roan.
The Company targets the production of 3 700 tonnes of copper for the 6-month
period ending December 2022 in-line with the ramp-up to full production of
Project Roan.
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