REG - Jubilee Metals Group - Posting of Circular & Notice of General Meeting
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RNS Number : 8887U Jubilee Metals Group PLC 12 August 2025
Jubilee Metals Group PLC
Registration number: 4459850
AIM share code: JLP
Altx share code: JBL
ISIN: GB0031852162
('Jubilee' or 'the Company' or 'the Group')
Dissemination of a Regulatory Announcement that contains inside information
according to UK Market Abuse Regulations. Not for release, publication or
distribution in whole or in part in, into or from any jurisdiction where to do
so would constitute a violation of the relevant laws or regulations of such
jurisdiction.
Proposed sale of South African Chrome and PGM Operations
Notice of General Meeting
Jubilee, a diversified metals producer with operations in South Africa and
Zambia, announces that it has today, issued an important circular regarding
the proposed disposal of its Chrome and PGM Operations in South Africa for a
purchase consideration of up to US$90 million (the "Transaction") to One
Chrome (Pty) Ltd ("Purchaser"). The Transaction constitutes a fundamental
change of business for the Company in accordance with AIM Rule 15 which
requires that the Transaction be approved by Shareholders.
The Company also gives notice of a general meeting of shareholders to be held
at 25 Ecclestone Place (The Auditorium), London, England, SW1W 9NF on 28
August 2025 at 11:00 a.m. (UK time), 12:00 noon (SA time), where the
resolution to approve the Transaction will be proposed. The resolution will be
proposed as an ordinary resolution. Shareholders should read the notice of
general meeting at the end of the circular for the full text of the resolution
and for further details about the general meeting.
The Directors consider that the resolution to be proposed is in the best
interests of shareholders and the Company as a whole and unanimously
recommends that shareholders vote in favour of the resolution, as they intend
to do in respect of their own beneficial shareholdings.
Highlights
· The Board is confident that the Transaction represents a
compelling opportunity for the Company to realise value from its Chrome and
PGM Operations.
· Strategically repositions Jubilee within the copper sector with
significantly greater investor recognition and valuation multiples as compared
with chrome and PGMs.
· Sale proceeds would substantially exceed Jubilee's short-term
capital requirements for its copper business.
· Zambia presents a highly attractive platform for growth
underpinned by strong copper market dynamics, expanding resource potential and
meaningful economic upside.
· Transaction is non-dilutive and creates the opportunity to
implement a sustainable share buyback programme and/or implement a dividend
policy in future.
· Transaction has an enterprise value of approximately US$146
million, which represents a 6.0x multiple on the FY2024 EBITDA of the assets
being sold.
· Letters of support received from institutional shareholders
representing, in aggregate, approximately 30.42% of the issued share capital
of the Company, to vote in favour of the resolution
The circular, which includes financial information on the Transaction, can be
found at https://jubileemetalsgroup.com/circulars/
(https://jubileemetalsgroup.com/circulars/)
Investor Meet Company Presentation
The Company will provide a live presentation via Investor Meet Company on 19
August 2025 at 11:00 am (UK time) and 12:00 noon (SA time).
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard up until
18 August 2025, 09:00 am (UK time) and 10:00 am (SA time), or at any time
during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet
Jubilee Metals plc via:
https://www.investormeetcompany.com/jubilee-metals-group-plc/register-investor
(https://www.investormeetcompany.com/jubilee-metals-group-plc/register-investor)
For further information visit www.jubileemetalsgroup.com
(http://www.jubileemetalsgroup.com/) , follow Jubilee on X (@Jubilee_Metals)
or contact:
12 August 2025
Jubilee Metals Group PLC
Leon Coetzer (CEO)/Jonathan Morley-Kirk (FD)
Tel: +27 (0) 11 465 1913 / Tel: +44 (0) 7797 775546
Nominated Adviser - SPARK Advisory Partners Limited
Andrew Emmott/James Keeshan
Tel: +44 (0) 20 3368 3555
PR & IR Adviser - Tavistock
Jos Simson/Gareth Tredway
Tel: +44 (0) 207 920 3150
Joint Broker - Zeus Capital
Harry Ansell/Katy Mitchell
Tel: +44 (0) 20 7220 1670/+44 (0) 113 394 6618
Joint Broker - Shard Capital Partners LLP
Erik Woolgar/Gareth Burchell
Tel +44 (0) 207 1869900
JSE Sponsor - Questco Corporate Advisory Proprietary Limited
Alison McLaren
Tel: +27 63 482 3802
Financial Adviser in relation to the Disposal
Absa Corporate and Investment Bank, a division of Absa Bank Limited
Craig Brewer
Tel: +27 83 303 0980
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Shareholders recorded on the register who are entitled to receive the notice Friday, 1 August 2025
of GM (SA)
Notice of GM posted to shareholders Tuesday, 12 August 2025
Last date to trade in order to be eligible to participate in and vote at the Thursday, 21 August 2025
GM (SA)
Record date for the purposes of determining which shareholders are entitled to Tuesday, 26 August 2025
participate in and vote at the GM (SA)
Record date for the purpose of determining which shareholders are entitled to 6pm on Tuesday 26 August (or 48 hours before the meeting excluding non-working
participate in and vote at the GM (UK) days)
Latest time and date for receipt of CREST Proxy Instruction and uncertificated 11:00 a.m. (UK time)
instructions (UK)
Tuesday, 26 August 2025
Latest time and date for receipt of Proxy Forms, Dematerialised Holding 12:00 noon (SA time)
Instruction and other uncertified instructions (SA)
Tuesday, 26 August 2025
General Meeting 11:00 a.m. (UK time)
12:00 noon (SA time)
Thursday, 28 August 2025
Results of the General Meeting released on RNS and SENS Thursday, 28 August 2025
Note:
Each of the times and dates in the above timetable are subject to change. If
any of the above times or dates change, the revised times or dates will be
notified to Shareholders by means of an announcement made through a
Regulatory Information Service (as defined in the AIM Rules).
FURTHER INFORMATION
Defined terms used in this announcement have the same meaning as set out in
the Definitions in the Circular.
1. Introduction
Jubilee announced the receipt of an unsolicited offer on 5 June 2025, since
when Jubilee and One Chrome have been working diligently to conclude the Sale
Purchase Agreement and the Windsor Sale of Business Agreement, and to produce
a Circular seeking Shareholders' approval for the Transaction.
If implemented, the Transaction will strategically reposition Jubilee within
the copper sector which has significantly greater investor recognition and
valuation multiples, supported by a well-defined peer group. Contrastingly,
Jubilee's current chrome dominant processing and PGM tailings recovery
operations exist in a segment which offers limited peer group evaluation
benefits and is subjected to strong influence by demand dynamics from China.
Proceeds from the Transaction would substantially exceed Jubilee's short-term
capital requirements to establish itself as a substantial and scalable copper
producer, positioning the Company in an industry known for superior valuation
metrics. Importantly, the Transaction is non-dilutive and creates the
opportunity to accelerate a sustainable share buyback programme and/or
implement a dividend policy, supported by a more stable, copper focused asset
base.
The operating companies that are to be sold under the Transaction are all
indirect subsidiaries of Jubilee through its wholly owned subsidiary Braemore
Holdings (Mauritius) (Pty) Limited. The Transaction provides for all relevant
employees to transfer with the subsidiaries to the Purchaser. Jubilee's
Zambian operations and other non-operating companies in South Africa and
Australia are excluded specifically from the Transaction.
The Transaction places a valuation on the Disposal Group of approximately
US$146 million on an enterprise value basis, which represents a 6.0x multiple
on the FY2024 EBITDA. The consideration to be received by Jubilee for the
Disposal is up to US$90 million, of which US$87 million is due and payable and
not subject to performance measures. The balance of US$3 million is subject to
certain metal prices and exchange rate criteria.
If the Transaction is implemented, the Purchaser will assume c.US$56.8 million
of loans and trade finance, which represents a substantial reduction in
gearing and financing cost and will enable Jubilee to better manage its
capital structure and financing strategy to support the continuing business in
Zambia. Table 5 in paragraph 8 below provides an illustration of the effect of
the Disposal on the Group's financial position as at 31 December 2024.
The Board is confident that the Disposal represents a compelling opportunity
for the Company to realise value from its Chrome and PGM Operations and to
redirect such realised value into the Company's Zambian copper business. The
Company has not received any formal competing bids for its Chrome and PGM
Operations. Additionally, transactions of this nature within the chrome and
PGM industry for the acquisition of processing assets in the absence of
large underlying resources, are extremely limited with no material
transactions recorded over the past five years. Zambia presents a highly
attractive platform for growth underpinned by strong copper market dynamics,
expanding resource potential and meaningful economic upside.
In view of the size of the Disposal Group relative to the size of the Company,
the Transaction constitutes a fundamental change of business for the Company
in accordance with AIM Rule 15. This requires that the Transaction be approved
by Shareholders. Should the Transaction be approved by Shareholders, the
Company will not become a cash shell and will not be required to complete an
acquisition which constitutes a reverse takeover under the AIM Rules.
2. Background
The Group owns and operates several chrome and PGM processing plants across
the Western and Eastern Limbs of the Bushveld Complex in South Africa. All of
the Chrome PGM Operations which form the Disposal Group are wholly owned, save
for Braemore Precious Metals Refiners (Proprietary) Limited ("Refiners"), an
indirect subsidiary of BHM in which Jubilee holds 73.75% of the issued share
capital. Dr Phosa, chairperson of Jubilee South Africa and chairperson of the
Board, holds the remaining 26.25% through Kgato Investments (Proprietary)
Limited, and his interests remain unaffected by the Disposal.
Jubilee's Tjate platinum PGM exploration project located on the Eastern Limb
of the Bushveld Complex in South Africa, is not included in the Disposal and
in time the Board will consider how to unlock value from this resource.
The Company's Chrome and PGM Operations were established on the strength of
its proven processing capabilities, enabling it to unlock value from chrome
and PGM bearing materials that were viewed traditionally by the industry as
uneconomical or too complex to process. Initially, the Company entered the
market through toll processing agreements focused on the recovery of PGM
ounces. Under these agreements, the Company processed chrome ore and tailings
owned by third parties, returning the resulting chrome concentrate to the
original owners while retaining the extracted PGMs.
Jubilee redefined what was regarded as economically viable and recoverable
chrome ores leading to rapid growth of its processing footprint. Jubilee's
strategy has been to move the Company towards longer-term profit-sharing
partnership agreements with the owners of the chrome ores, to offer a more
diversified income base of both chrome and PGMs. Jubilee's ability to process
economically lower grade chrome ores resulted in rapid growth of its Chrome
and PGM Operations reaching in excess of 1.65Mt of annual chrome concentrate
during FY2025 and establishing firmly Jubilee as a primary chrome producer and
becoming one of the top five chrome producers worldwide and producing PGM
concentrate as a byproduct. This gradual move towards increasing exposure to
both the chrome and PGM markets enabled Jubilee to react to the changing
market dynamics with greater flexibility. This was demonstrated during FY2024
when Jubilee was able to re-prioritise its processing capacity to offset the
impact of a sharp pull-back in PGM markets by further increasing the chrome
production under these agreements, partnering on chrome ore extraction and
selling the chrome concentrate product to share in the chrome revenue under
the agreements.
The Company's H1 FY2025 revenue and earnings exposure demonstrates clearly
this shift over the 2025 financial year, with chrome revenue accounting for
86% of the total first half revenue for FY2025 from of the Disposal Group. The
Company is exposed predominantly to chrome rather than PGMs due to the
comparative size of each operation. Furthermore a 1% movement in the chrome
price is equivalent currently to an approximate 4.5% movement in the platinum
price on the earnings potential of the Company at current operating cost
assumptions (refer to paragraph 4 below for more information).
The Company has experienced significant metal prices fluctuations over the
past twelve months which has been more pronounced since May 2025 with a
significant increase in the PGM basket price of 33% versus a decrease in the
chrome price of 11.4%. The estimated impact on earnings of such a metal price
movement extrapolated over a 12-month period using the production guidance
provided for FY2026, is illustrated in paragraph 4 below. The Company does not
own or operate chrome or PGM mines but relies on sourcing chrome and PGM
bearing run-of-mine materials.
The Chrome and PGM Operations have reached a high level of maturity on the
back of a rapid expansion programme to transform the Company more towards
chrome ore partnership agreements away from toll contracts, as well as the
dependency of the PGM operations on sustained chrome ore feed. The Chrome and
PGM Operations are reliant on the delivery of third-party chrome ore to the
processing facilities under Jubilee's management. The PGM operations are not
stand-alone businesses and are integrated into the chrome ore tolling and
partnership supply agreements. Jubilee only has access to the PGM bearing
materials as a byproduct from its processing of chrome ores.
3. Operational overview of the Disposal Group
Jubilee's Chrome and PGM Operations process chrome ore delivered to its
processing facilities, from which chrome concentrate is extracted first. The
resulting tailings from this processing of chrome ore contain commercially
extractable quantities of PGMs. In essence, this makes Jubilee primarily, a
chrome concentrate producer, with the benefit of PGM production as a follow-on
product. Jubilee owns and operates the Windsor chrome facilities and the
Inyoni and OBB PGM processing facilities. In addition, Jubilee operates three
Thutse processing units ("Thutse") in partnership with One Chrome. The three
Thutse processing facilities combined make up a processing capacity of
130 000tpm of chrome ore.
Chrome ore supply is secured through a combination of short-term (2-3 yrs)
toll agreements and medium term (+5 yrs) chrome ore partnership agreements.
The Group's chrome toll agreements include two main agreements from a single
chrome ore supplier which when combined, accounts for approximately 1Mt of
produced chrome concentrate per annum through the Group's Windsor chrome and
OBB chrome ore processing facilities. The OBB chrome and PGM processing
facilities are situated adjacent to Jubilee's Inyoni PGM facility and chrome
tailings from the OBB chrome processing facility are fed directly to the PGM
facility. The Windsor chrome tailings are stockpiled and dewatered before
being trucked to the Group's Inyoni PGM facility for processing. Any shortfall
in utilised capacity at Inyoni is filled by the on-site historical tailings.
Shareholders will be aware, as announced on 21 July 2025, that the Company's
OBB chrome ore supply and operating contract was not renewed. The contract
contributed the equivalent of approximately 450 000tpa of chrome concentrate
(based on FY2025). PGM tailings from the OBB processing facility will continue
to be processed at the Inyoni PGM facility. The discontinuation of this chrome
ore supply and operating contract will have a limited impact on the PGM
production profile of Jubilee with initial interruptions expected in the PGM
supply from the OBB facility as part of the operational handover over the
coming two months. PGM feed supply to the Inyoni PGM facility stems
predominantly from the tailings generated from the OBB facility and
supplemented by PGM tailings from the Windsor operations as well as the
existing PGM bearing feedstock in the historical chrome and PGM tailings at
Inyoni. Jubilee holds a second tolling agreement with this specific ore feed
supplier, producing in excess of 500 000tpa of chrome concentrate at its
Windsor operations, which reaches maturity in February 2027.
This strategy to increase the Company's exposure to chrome ore partnership
agreements has ensured a more diversified supply of chrome material as well as
securing increased market exposure to chrome rather than PGMs alone. This
strategy has assisted to boost greatly the Group's chrome earnings and offset
the sharp decline in PGM prices in prior periods. The Thutse partnership
agreement ("Thutse Agreement") is the largest, contributing approximately 75%
of total chrome concentrate produced under the Company's chrome ore
partnership agreements. Under the Thutse Agreement, Jubilee holds a 35%
earnings share of total chrome earnings. Chrome ore is acquired from the
Thutse mine and other third-party sources from which chrome concentrate is
produced and sold to market.
Jubilee has in the past, under a joint venture agreement, accessed available
PGM processing capacity at a facility near Inyoni to process suitable excess
PGM stock held at its Windsor operations. This facility is currently fully
utilised by the owner thereof, for the processing of higher value PGM
run-of-mine material. PGM stock held at Inyoni requires a pre-treatment prior
to processing and carrying value of this stock is recognised as long term
inventory on the balance sheet and forms part of the NAV of the Disposal
Group.
Jubilee is processing currently selected excess chrome and PGM containing
material under a new joint venture agreement at the joint venture party's
facilities in the Northern Limb of South Africa.
4. Financial overview of the Disposal Group
The financial contribution of each of the segments of the Chrome and PGM
Operations as demonstrated in the tables below, reflects the disproportionate
growth in the chrome operations compared with the relatively constant PGM
ounce production profile. During FY2025 annual chrome concentrate production
reached in excess of 1.65Mt with PGM production ranging between 36 000 oz to
38 000 oz.
Chrome revenue is generated from the sale of chrome concentrate to the market
under chrome ore partnership agreements or sold back to the owner of the
chrome ore under the tolling agreements. PGM revenue is generated from the
sale of the various metals comprising the PGM basket as per the offtake terms
of the individual platinum group metals. On average platinum accounts for
approximately 47% of the revenue per PGM oz, with approximately 77% of the
basket value of a PGM oz being realised by Jubilee as net revenue, based on
the contractual payable percentage per metal after accounting for refining
charges and penalties.
The chrome revenue and earnings growth from FY2024, as can be seen in Table 1
below, has overtaken the PGM revenue and earnings by a considerable margin
reflecting the Company's exposure and reliance on chrome as the fundamental
business driver. Chrome revenue accounted for 86% of the Chrome and PGM
Operations for the half year ending December 2024 with chrome contributing 82%
of EBITDA over the same period. Chrome accounted for 100% of the Disposal
Group earnings with PGM dipping into negative earnings for both FY2024 and H1
FY2025 due to the prevailing PGM prices at the time.
Over the past year Jubilee has seen large fluctuations in the price of chrome.
For the period May to July 2025, the chrome price has depreciated by
approximately 11.4% which has been largely offset by platinum prices that have
appreciated by nearly 33% over the same period (post July 2025 the chrome
price remained at its current levels while the platinum price depreciated by
9.0%). Given the nature of its business, Jubilee's chrome margins in South
Africa are low which is typical of a processing and tolling company and
reflects the processing nature of the business.
The Group's earnings sensitivity has pivoted to a point where a 1% movement in
chrome price is the equivalent to a 4.5% movement in PGM prices, at current
operating cost assumptions. This ratio is also evident be even a modest
increase in operating costs; for example, an 8% increase in costs both PGM and
chrome would result in a 1% movement in chrome prices becoming the equivalent
of an 8% movement in PGM prices.
Table 1 sets out the revenue and earnings history of the Chrome and PGM
Operations for the past three audited financial years and unaudited six months
to December 2024. All tax losses for the Disposal Group have been fully
utilised up to 30 June 2025.
Table 1: Disposal Group revenue and earnings history (unaudited)
Financial Period Revenue Profit before tax taxation Profit after tax EBITDA
US$'000 US$'000 US$'000 US$'000
H1 FY2025 Chrome 114 467 11 367 10 357 13 498
PGM 18 739 (3 331) (4 058) 3 028
Combined Group 133 206 8 036 6 299 16 526
FY2024 Chrome 150 176 14 229 13 169 17 847
PGM 36 740 (6 127) (8 065) 6 719
Combined 186 916 8 102 5 104 24 566
FY2023 Chrome 95 365 3 980 3 916 5 301
PGM 55 214 14 481 14 095 25 556
Combined 150 579 18 391 18 011 30 857
FY2022 Chrome 94 717 9 270 7 011 9 939
PGM 67 239 24 370 17 992 34 076
Combined 161 956 33 640 25 003 44 015
The FY2026 operational financial projections for the Disposal Group are
presented below by assuming the spot metal prices as of 22 July 2025 (increase
in the PGM basket price of 35.2% and a 2.6% decrease in the chrome price when
compared to the average metal prices for FY2025 (Table 2 below)) and applying
a modest 8% increase in operating cost to the production guidance announced.
Based on the assumptions, the PGM division suggests an increase in incremental
EBITDA when compared with the FY2025 metal prices of between US$7.55 million
and US$8.40 million (Table 3 below). The chrome division projects a decrease
in incremental EBITDA of between US$7.91 million and US$9.01 million with the
overall Group incremental EBITDA impact being marginally negative, ranging
from a loss of US$0.35 million to US$0.61 million. These illustrative numbers
serve to indicate the interdependence of the operations and the dominance of
the chrome financial numbers on the Disposal Group results. Tables 2 and 3
below are for illustrative purposes only.
Table 2: Chrome and PGM prices
Chrome PGM
FY 2025 22-Jul FY 2025 FY2025 22-Jul-25 22-Jul-25
Average Chrome CIF Price US$/t Spot Chrome CIF Price US$/t % Change Cr Price Actual average Basket Price US$/oz Actual Payable Basket US$/oz Spot average Basket Price US$/oz Spot Payable Basket U$/oz % Change PGM Price
272 265 (2.60%) 1 425 1 103 1 927 1 492 35.20%
Table 3: FY2026 Disposal Group incremental EBITDA analysis (Unaudited)
PGM Division
Description Lower Guidance Upper Guidance
Estimated PGM ounces sold Oz 36 000 40 000
Additional revenue per ounce US$/oz 389 389
Additional revenue from higher metal prices US$'m 13.99 15.55
Deductions for partner profit share US$'m (3.92) (4.35)
Higher production costs (inflation-adjusted) US$'m (2.52) (2.80)
Incremental EBITDA contribution from PGM division US$'m 7.55 8.40
Chrome Division
Description Lower Guidance Upper Guidance
Attributable chrome volumes Kt 628 715
Average price decline per tonne US$/t (7.00) (7.00)
Revenue loss due to lower prices US$'m (4.09) (4.66)
Higher production costs (inflation-adjusted) US$'m (3.82) (4.35)
Incremental EBITDA impact from Chrome division US$'m (7.91) (9.01)
Net incremental Disposal Group EBITDA US$'m (0.35) (0.61)
Key Assumptions
· FY2025 average PGM basket price US$1 425/oz used as the base
· PGM spot prices from 22 July 2025 used for comparison
US$1 927/oz
· FY2025 average 40/42 CIF chrome price US$272/t used as the base
· Chrome spot price from 22 July 2025 used for comparison US$265/t
· Only attributable chrome and PGM production is used in this
illustration
· 8% inflation applied to operational costs for both chrome and PGM
· Profit sharing and contractual JV terms applied where relevant
The Purchase Consideration offered by One Chrome recognises the value inherent
in Jubilee's processing expertise, which has been reflected in Jubilee's
audited financial statements for FY2024 and H1 FY2025. Accordingly, the
Transaction value has been set at approximately the level of the NAV
attributable to the Disposal Group. Table 4 below sets out the attributable
NAV of the Disposal Group for the past three audited financial years and
unaudited six months to 31 December 2024. The unaudited NAV number for H1
FY2025, speaks to the growth in chrome operations. The most recent NAV as at
31 December 2024 was US$90.6 million of which 23% relates to intangible assets
comprising technical know how and processing capabilities.
Table 4: Disposal Group historical net asset value (unaudited)
Financial Period Net asset value
US$'m
H1 FY2025 (unaudited) 90 609
FY2024 82 915
FY2023 77 642
FY2022 86 957
At a guaranteed range of US$87 - US$90 million of proceeds, the Transaction
offers the potential to fully monetise the NAV of the Chrome and PGM
operations. The Purchase Consideration is subject to adjustment in the event
that the audited financial results for the Disposal Group for the year ended
30 Jue 2025 show a NAV of less than US$90 million (refer to paragraph 6
below).
5. Rationale for the Disposal
The Board recognises that there are limited avenues for meaningful growth of
Jubilee's business in South Africa and that market risks persist around the
security of chrome ore supply. Despite the scale of the Group's operations,
being one of the top five chrome producers globally, most of the growth
potential has been realised. Further significant growth opportunities are very
limited and would require significant capital outlay to acquire chrome
processing mines. In essence, the Purchaser has made the decision to capture
more value in the ground, by pursuing a fully integrated chrome strategy
through the purchase of Jubilee's South African processing facilities in order
to increase its operational footprint and deepen vertical integration,
enhancing its competitiveness.
As a pure processor of third-party chrome materials, Jubilee does not own any
chrome mining resources or mining operations in South Africa and instead is
reliant on toll processing and partnership for the supply of material to its
processing facilities.
Jubilee's Chrome and PGM Operations have reached a pivotal point requiring the
Board to make a decision:
· To continue as a pure processer of third-party ore which is faced
with the likely prospects of reducing margins due to the escalating costs to
secure third-party chrome ore with now direct ability to influence this cost
or control the efficiency of the supply. This is within an increasingly
competitive market as resource owners seek to secure the processing benefit to
capture more value from their mined chrome ore and in turn lower their
respective costs of production; or
· Pursue the limited opportunities to acquire chrome mines for
considerable capital, to secure future supply of chrome ores and sustain its
chrome and PGM processing footprint. Such an investment pursuit must be
evaluated against the capital risk, fundamentals of the chrome market and the
jurisdictional uncertainty of South Africa; or
· The sale for full value of the Chrome and PGM Operations to
redirect investment into a more favourable metals market such as copper,
supported by an existing investment and operational portfolio offering
significant potential growth opportunities. The integration and
interdependency of the Chrome and PGM Operations does not offer the
opportunity to pursue a separate sale of the two divisions.
Jubilee is a processing company that processes chrome and PGM bearing
material. It does not own any mining resources or mining operations in South
Africa other than its Tjate platinum PGM exploration project. Further
operational growth would require access to mines and resources, chrome ore
feed supply on commercially viable terms. Any attempt to expand materially
either production or expand margins would require significant capital outlay.
The financial overview of the Disposal Group in paragraph 4 above illustrates
the sensitivity of the Chrome and PGM Operations to cost escalations which is
typical of a pure processing company. This is exacerbated by the escalating
cost of chrome ore in a market where the supply and demand fundamentals are
skewed by the dominance of the China based ferrochrome industry. The increased
number of processing entrants in the market and resultant competition for
chrome ore has resulted in a decoupling of the chrome ore price from
underlying chrome prices. This decoupling can be countered by direct ownership
of the chrome ore through the acquisition of chrome mines such as Thutse.
The Purchaser recognises the value of the formation of a fully integrated
chrome producer through a combination of its chrome mines (including of its
interest in the Thutse mine), with the processing footprint and expertise of
Jubilee's Chrome and PGM Operations. The Thutse mine accounts for
approximately 75% of total third-party run-of-mine chrome ore under
partnership agreements, supplied to the processing facilities managed and
owned by Jubilee.
Chrome markets, pricing and demands are dominated by China, which remain
opaque and volatile. A lack of forward curves and/or hedging tools makes
planning difficult, reducing margin visibility and portfolio quality.
Contrastingly, the copper market offers Jubilee exposure to one which is
highly liquid, with real time pricing offered by LME and COMEX exchanges.
Despite seeing a recent increase in PGM prices, the average PGM basket price
received, decreased during FY2024 by 20.1% to US$1 009/oz which further
motivated the Company's investment into chrome production to offset the impact
of the reduction in the PGM basket price. The longer-term outlook for the
basket price remains uncertain, given the continued rise of electric vehicles
within the overall motor vehicle market and a maturing market in combustion
engine cars which are a key demand source for auto catalysts in which PGMs are
a large component. A weaker US$ against the ZAR also has a significant impact
on the net realised chrome and PGM operating earnings due to a large ZAR
component of cost.
The current appreciation in PGM prices is thought to have been driven by a
combination of short-term market dynamics and investor sentiment shifts,
rather than broad-based structural demand growth alone. While platinum prices
have shown recent strength, following a prolonged period of stagnation, the
broader PGM basket, comprising platinum, palladium, and rhodium, has seen only
a partial recovery, with palladium and rhodium prices remaining significantly
below prior highs. Whether this recent price rally will be sustained is
uncertain, this upward momentum already showing signs of stagnation. If
maintained, it offers the potential for the Company to remarket its Tjate PGM
asset which remains a large PGM resource.
Capital structure
The Group's South African revolving credit facility of US$16.3 million and its
South African metal trade finance facilities totalling approximately US$40.5
million, both fully drawn currently, totalling US$56.8 million, will be
assumed by the Purchaser as part of the Transaction.
The combination of the cash received in the form of consideration and reduced
gearing will strengthen substantially the Group's balance sheet. Table 5 below
illustrates the effect of the Disposal on the Group's financial position,
showing a reduction in the Group's total liabilities, current and non-current,
from c.US$184 million to c.US$71 million, and total debt reducing from c.US$84
million to c.US$ 31 million, as at 31 December 2024, representing a reduction
in debt-to-equity ratio from 35% to 13% (refer to table 5 below). This
strengthening of the balance sheet will better enable the Group to support
growth in the ongoing Zambia copper business and to deliver value to
shareholders.
Zambian opportunity and potential
Jubilee has invested significantly in its copper business in Zambia. The
development and execution of its copper strategy in Zambia has been shaped by
the successful implementation of its Chrome and PGM Operations in South Africa
evidencing sustained growth and security of long-term feed supply.
As communicated to shareholders, in Zambia, Jubilee has overcome several
infrastructural challenges and power constraints over the past period. Through
continued investment Jubilee's Roan concentrator has reached a point of stable
production of copper metal from mainly third-party resources while it is
developing its mining projects Munkoyo and Project G, placing the Company on
an exceptional platform from where it is able to now roll out and implement
its integrated metals strategy.
Jubilee's copper strategy has leveraged experiences and expertise from its
South African processing business. Whilst the Company's South African
operations are reliant on third party feed supply, Jubilee has acquired
extensive copper resources in Zambia and developed a three-pillar diversified
platform on the back of its growing presence in Zambia, with significant
growth potential that includes:
(i) Integrated mine-to-metals business: Jubilee's Sable refinery (Sable)
together with its nearby Munkoyo open-pit copper mine (Munkoyo) and Project G.
In addition, Jubilee has secured extensive further exploration rights.
· Munkoyo and Project G are being developed to be the anchor source
of copper material for cathode production at Sable.
· Further large-scale exploration properties secured to expand
Jubilee's copper resource base.
· Munkoyo is a series of nine open-pits. Resource drilling is
underway to establish the potential of combining these pits into one large
open-pit operation offering greater flexibility and scale.
(ii) Processing of third-party copper feedstock: Jubilee's Roan
concentrator (Roan).
· The upgraded Roan is fully operational reaching 384 tonnes of
copper units for the month of July 2025 alone, proving the sustainability of
the new upgraded processing solution.
· Roan concentrator produces copper concentrate from
non-traditional feedstocks. Copper sulphide concentrates are being sold into
the market and copper oxide concentrates are refined at Sable.
· Dedicated copper leaching circuit targeted to enhance copper
margins and recoveries and avoid reliance on the Sable's leaching and refining
capacity.
(iii) Processing of Jubilee acquired surface stockpiles and tailings dumps:
Jubilee's rights to the Large Waste Tailings dump which contains in excess of
240Mt is the priority asset.
· Completed a review of total surface stock portfolio to rank vast
surface resource portfolio based on potential returns offered and ease of
implementation.
· Monetisation programme underway to sell lowest ranking non-core
tailings assets with approximately US$18 million deal value already transacted
over the past six months.
Shareholders are also referred to the announcement dated 6 August 2025.
Unlike chrome that is a physically traded metal, copper is traded through a
more transparent market as recorded on the various metal exchanges such as the
London Metals Exchange. Copper fundamentals are well supported with a positive
long-term outlook based on supply concerns and its growing role in the energy
transition.
The Disposal provides Jubilee with the ability to focus its efforts and
resources on its copper portfolio in Zambia, which it believes offers greater
potential for growth, operational, jurisdictional and economic upside. It
further allows the Company to reallocate strategically resources from a
low-growth and capital-intensive business in South Africa to a focused
presence in Zambia that has a large resource base, high growth potential and
offers greater commodity liquidity within the copper market.
Divesting in South Africa removes a considerable amount of jurisdictional
risk. South Africa's real GDP growth decelerated from 1.9% in 2022 to 0.6% in
2023, due to persistent electricity shortages, transport sector constraints
and lower international prices for gold and PGM. Added to this is a
challenging outlook for South Africa with GDP growth only 0.6% in CY2024 and
according to the International Monetary Fund, real GDP growth will reach just
1.5% in 2025. In addition, there are considerable risks associated with
electricity supply, transport bottlenecks and fiscal vulnerabilities arising
from bailouts of state-owned enterprises.
The outlook for Zambia is more positive. According to the IMF, growth momentum
is expected to continue in 2025, with real GDP growth projected at 5.8%.
Economic activity would be supported by a rebound in agricultural output,
increased copper production, and a gradual recovery in electricity generation.
The IMF expects economic growth of 6.4% in 2026.
From a copper demand perspective, the International Copper Study Group noted
that global usage is expected to continue to be supported by improvements in
manufacturing activity in some of the key copper end-use sectors, continued
demand from energy transition, urbanisation, digitalisation (data centres) and
the development of new production capacity in India and a number of other
countries.
The Board recognises that infrastructure challenges, particularly relating to
power and water availability, have impacted mining operations across the
country in recent periods due to drought and grid constraints. However,
Jubilee has proactively incorporated these considerations into its project
planning and is engaging with both government stakeholders and independent
power providers to implement sustainable energy and water solutions. The Group
is also assessing on-site power generation and water efficiency technologies
to mitigate operational risks and ensure continuity of production.
The Company believes achieving value for its Chrome and PGM Operations now,
provides the best outcome available to Shareholders, providing upfront and
guaranteed capital for the business and reducing the risks associated with
achieving a continued positive return from these assets in the years ahead.
Beyond security of ore supply, these risks as a processor of third-party
materials, include, commodity price volatility, currency risk, continued
uncertainty in South Africa around infrastructure and supply of services such
as electricity, and the high levels of working capital and trade debt required
to operate the scale of the South African business.
Potential for dividends and share buybacks
The Board believes that by successfully deploying the proceeds of the Disposal
in the opportunities presented by copper mining and processing in Zambia, the
Group will be on a pathway to sustained growth and profitability, and in the
future to making distributions to shareholders by way of dividends and/or
share buybacks. Zambia will remain in a growth phase for the next few years
and will require, inter alia, capital from the proceeds of the Disposal, from
normal trade finance sources and ongoing operating cashflows to achieve that
growth. The Board further believes that in due course the opportunities in
Zambia have the potential to create a profitable and cash generative business,
capable of delivering value to shareholders through capital growth and returns
by way of dividends and/or share buybacks.
6. Terms of the Disposal
6.1 Purchase Consideration
The Purchase Consideration of up to US$90 million is payable by One Chrome to
BHM pursuant to the Sale Agreement, as follows:
(i) Cash payments of US$25 million payable as follows:
· an Advance Payment of US$15 million shall be paid to BHM on the
Signature Date provided that, should all the Conditions (Suspensive
Conditions) to the Sale Agreement not have been fulfilled by 31 December 2025
or such later date as agreed to by the Parties, the Advance Payment shall be
refunded to the Purchaser in full within five (5) days after the date of 31
December 2025 or such date as agreed to by the Parties; and
· an amount of US$10 million shall be paid by no later than two (2)
Business Days after the Completion Date.
(ii) Deferred Payments of US$50 million payable as follows:
· a minimum deferred payment of US$15 million shall be paid by no later
than the first anniversary of the Completion Date; and
· further minimum annual deferred payments of US$10 million shall be
made following each subsequent anniversary of the Completion Date, until the
maximum deferred payments of US$50 million have been settled in full.
The annual deferred payments will be accelerated by US$5/t for each tonne of
chrome concentrate production exceeding 1.5 million tonnes and by US$70/oz for
each ounce of PGM production exceeding 36 000 ounces.
(iii) A minimum Royalty of US$12 million up to a maximum of US$15 million
shall be payable by One Chrome to BHM, subject to fulfilment of certain
royalty related conditions (Royalty Conditions) namely:
· One Chrome will pay US$3.50 cents per ton of chrome concentrate
produced by the Disposal Group, on condition that the Disposal Group has met
certain commodity price and exchange rate performance criteria. These targets
must be confirmed by the Disposal Group appointed Auditor for each 12-month
period;
· the Royalty payments shall be made by One Chrome to BHM within 10
days after the completion of the calculation, until the maximum Royalty of up
to US$15 million has been achieved; and
· if the Royalty Conditions have not been fully or partially
fulfilled and aggregate Royalty payments of less than US$12 million have been
made throughout the Deferred Payment period referred to in paragraph (ii)
above, the difference between US$12 million and the payments made up to such
date, will be paid by One Chrome pro-rata over a further deferred period of
two-years, in equal instalments.
The Purchase Consideration was calculated with reference to the NAV of the
Disposal Group which shall be at least US$90 million as at 30 June 2025 as
certified in the Auditors Certificate certifying the NAV as at 30 June 2025
having reference to the Audited Accounts for FY2025.
6.2 Suspensive Conditions
Completion is subject to the following Suspensive Conditions being satisfied
or waived in accordance with the Sale Agreement.
· Approval of the South African Competition Commission Tribunal
under the Competition Act;
· Approval of the South African Reserve Bank to the extent
required;
· Consent of any financiers of the companies within the Disposal
Group to the extent that such consent is required in respect of a change of
control of the Disposal Group that will occur pursuant to the Disposal;
· Passing of shareholders' resolutions on the part of Jubilee and
One Chrome approving the Disposal;
· Passing of a shareholders' special resolution on the part of BHM
approving the Disposal; and
· Execution and implementation of the SOB.
6.3 Security
The Deferred Payment is secured by the Purchaser through a pledge over 49% of
the issued capital of JMG SA Holdings to be held in escrow by BHM's nominated
attorneys. The Share Pledge shall be reduced proportionally on each occasion
that the Purchaser makes a Deferred Payment, provided that at all times until
the Deferred Payment has been reduced to zero, the Share Pledge shall not at
any time fall below 25.1% of the JMG SA Holdings' ordinary shares. To ensure
enforceability, Jubilee has secured step-in-rights over the pledged shares.
6.4 Termination and Break Fee
If the Suspensive Conditions to the Sale Agreement are not satisfied or waived
by 31 December 2025 then the Sale Agreement may be terminated by the party
entitled to the benefit of the Suspensive Condition not satisfied or waived or
by either BHM, One Chrome or Jubilee. The Advance Payment shall be refunded to
the Purchaser in full within five (5) days after the termination date of the
Sale Agreement.
The Sale Agreement provides for a reciprocal break fee of US$900 000, in the
event that the Disposal does not proceed as intended, due to the fault of
either BHM or One Chrome or any material act or omission attributable to it.
6.5 Adjustment
The Purchase Consideration was calculated based on BHM's representation and
warranty that as at 30 June 2025, the NAV of the Disposal Group shall be at
least US$90 million. If the NAV is below US$90 million, then the Purchase
Consideration shall be reduced by US$1 for every US$1 that the NAV is below
US$90 million.
6.6 Warranties and indemnities
The Sale Agreement contains certain customary representations, warranties and
indemnities and is subject to customary limitations and exclusions. Warranties
were given subject to detailed disclosures made by BHM.
7. Use of Proceeds
The use of proceeds from the payment consideration, net of transaction costs,
will together with existing resources and operating cash flows, be employed to
reduce existing bank facilities of up to US$8.3 million to allow Jubilee to
restructure its funding to better align with the Company's copper strategy
post the Disposal. The main use of the proceeds will be towards the
development and implementation of Jubilee's copper strategy, and more
specifically the following projects:
(i) Munkoyo Operations
Funding of the implementation of the optimised open pit mining solution as
well as the implementation of the on-site processing solution. Munkoyo
resource is currently being drilled in partnership with a mining and
geological firm which will be used to inform the final designs.
(ii) Project G
Implementation of a more detailed exploration program to better inform optimal
open pit design and completion of the on-site ore upgrade facility prior to
refining at Sable Refinery
(iii) Sable Refinery Expansion
The expansion of the Sable refinery to meet the capacity demands from both the
expanded Munkoyo and Project G operations.
(iv) Roan concentrator
Roan is an independent processing facility that produces both copper oxide and
copper sulphide concentrate from waste, tailings, and previously mined
material. The copper sulphide concentrate is sold via off-take agreements and
the copper oxide concentrate is delivered to Sable for the production of
copper cathode. The Company targets to install a copper refining stage at Roan
to offer greater flexibility and further enhance margins. The refining step
will also seek to recover the copper lost in the super fine fraction.
(v) Large Waste Project
The Company has prioritised the Large Waste project (in excess of 240 million
tonnes). Jubilee is looking to roll out a series of 25 000tpm modular
processing units on-site, based on the design implemented at Roan. The Company
targets to achieve 5 000tpa of copper units through the initial rollout of
modular processing units.
8. Illustration of the impact of the Disposal on the Group's financial
position
The financial information below is unaudited and provides an illustration of
the net assets of the Group on the basis set out in the notes to show the
effect of the Transaction as if it had occurred on 31 December 2024.
This information has been prepared for illustrative purposes only and, by its
nature, addresses a hypothetical situation and does not, therefore, represent
the Group's actual financial position or results. Such information may not,
therefore, give a true picture of the Group's financial position or results
nor is it indicative of the results that may or may not be expected to be
achieved in the future.
The illustrative statement of financial position is based on the unaudited
statement of financial position of the Group as at 31 December 2024 and of the
Disposal Group at the same date. No adjustments have been made to take account
of trading, expenditure or other movements subsequent to 31 December 2024,
being the date of the last published historical financial information of the
Group. Unaudited Pro Forma Financial Information does not constitute financial
statements within the meaning of section 434 of the Companies Act.
Table 5: Unaudited illustrative statement of financial position as at 31
December 2024
Page Group SOFP as at 31 December 2024 (unaudited) Disposal Group SOFP as at 31 December 2024 (unaudited) Purchase Consideration Group SOFP adjusted for the Disposal (unaudited)
Note 1 Note 2 Note 3
Non-Current Assets 257 710 53 749 65 000 268 961
Current Assets 169 036 149 906 25 000 44 130
Total Assets 426 746 203 655 90 000 313 091
Net asset value 243 170 90 609 90 000 242 561
Debt 84 060 53 322 - 30 738
Non-Current Liabilities 21 336 3 494 - 17 842
Current Liabilities 78 180 56 230 - 21 950
Total Liabilities 183 576 113 046 - 70 530
Total Equity and Liabilities 426 746 203 655 90 000 313 091
Debt to Equity ratio 35% 13%
Current Assets to Current Liabilities ratio 216% 201%
Total Assets to Total Liabilities ratio 232% 444%
Notes:
The illustrative statement of financial position has been prepared on the
following basis:
1. The unaudited statement of financial position of the Group as at 31
December 2024 has been extracted without material adjustment from the
unaudited interim financial statements of the Group.
2. The unaudited statement of financial position of the Disposal Group
as at 31 December 2024 has been extracted without material adjustment from the
unaudited management accounts.
3. Assumes the deferred consideration is received in full.
9. AIM Rule 15
In view of the size of the Disposal Group relative to the existing size of the
Company, the Disposal constitutes a fundamental change of business for the
Company in accordance with Rule 15 of the AIM Rules. As such, it is a
requirement of the AIM Rules that the Disposal be approved by Shareholders at
a general meeting of the Company. The Disposal is therefore conditional on the
approval of the Resolution set out in the Notice of General Meeting.
Following Completion, the Company will continue to own, control and conduct
trading businesses, activities and assets and will not therefore become an AIM
Rule 15 cash shell and as such will not be required to make an acquisition or
acquisitions which constitutes a reverse takeover under Rule 14 of the AIM
Rules.
10. Action to be taken
The Disposal is conditional upon the terms of the Sale Agreements summarised
in paragraph 6 above, and include approval by the Shareholders of the
resolutions at the General Meeting.
Full details of how to vote on the Resolution are set out in paragraph 10 of
Part B of the Circular.
11. Letters of support
The Board has received letters of support from a number of institutional
Shareholders representing in aggregate, approximately 30.42% of the issued
share capital of the Company, to vote in favour of the Resolution.
12. Recommendation
The Board considers that the Resolution to be proposed is in the best
interests of Shareholders and the Company as a whole and unanimously
recommends that Shareholders vote in favour of the Resolution, as the
Directors intend to do in respect of their own beneficial shareholdings, which
amount in aggregate to 4 150 194 Ordinary Shares, representing approximately
0.13 % of the issued share capital of the Company.
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. END MSCZZGMRZMMGKZZRecent news on Jubilee Metals
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