Jubilee Metals Group (LON:JLP), the AIM and AltX traded metals processing company, today announced its operational update for Q1 2019.
Leon Coetzer, Chief Executive Officer, says:
“The period has been exceptional for Jubilee, showcasing the implementation of our stated mission to grow our earnings base, while maintaining strong margins and diversifying our operational footprint into base metals and across a number of mining jurisdictions.
The team delivered strong earnings growth breaching GBP 3 million while simultaneously implementing the PlatCro chrome transaction to increase our chrome operational footprint and successfully securing the funding for the implementation of our Zambian Kabwe project. This performance was achieved despite a notoriously slow operational period in January.
Our DCM fine chrome project is a remarkable achievement, delivering its first saleable chrome concentrate to the market. I look forward to the team achieving full design throughputs on the back of this success during the next period. “
Highlights
· 57% increase in quarterly operational earnings to GBP 3.22 million (ZAR 58.85 million)
· 54% increase in combined quarterly revenue up to GBP 6.56 million (ZAR 119.90 million)
· PlatCro chrome acquisition completed and contributing to Company earnings ahead of projections
· PlatCro PGM* project (platinum and palladium dominant) targeted to commence with production in Q2 2019
· First chrome concentrate from DCM fine chrome project delivered to market with production ramp up expected to reach full design capacity of 25 000 tonnes per month in Q2 2019
· Exposure to wider commodity basket, including chrome, PGMs, vanadium, zinc and lead
· Increased backing from institutional investors secured to complete funding for the Kabwe project
· Successful secondary placement of all Jubilee shares held by BMR Group PLC to institutional investors
- 6 Element Platinum Group Metals including platinum, palladium, rhodium, ruthenium, osmium and gold
Consolidated operational financial review for Q1 2019
Q1 2019 has seen continued delivery by the Jubilee team bringing into operation a further two projects, with the acquisition of the PlatCro chrome operation and the commissioning of the DCM fine chrome project.
This strong performance is expected to continue in Q2 2019 as the PlatCro PGM project is brought into production at a targeted processing rate of 60 000 tonnes per month and the acceleration of the Kabwe vanadium, zinc and lead project, following the recent acquisition of the Sable Zinc Kabwe Limited (“Sable Refinery”) refinery in Zambia.
The table below presents the operational revenue and earnings performance for Q1 2019.
| PGM | Project revenue (GBP’000) | Project revenue (ZAR’000)1 | Jubilee attributable earnings (GBP’000) | Jubilee attributable earnings (ZAR’000) |
| Q4 2018 | 3,737 | 68,807 | 2,173 | 40,078 |
| Q1 2019 | 3,443 | 62,959 | 1,908 | 34,993 |
| CHROME | Project revenue (GBP’000) | Project revenue (ZAR’000)1 | Jubilee attributable earnings (GBP’000) | Jubilee attributable earnings (ZAR’000) |
| Q4 2018 | 534 | 9,840 | (123) | (2,267) |
| Q1 2019 | 3,117 | 56,945 | 1,309 | 23,854 |
| COMBINED | Project revenue (GBP’000) | Project revenue (ZAR’000)1 | Jubilee attributable earnings (GBP’000) | Jubilee attributable earnings (ZAR’000) |
| Q4 2018 | 4,271 | 78,647 | 2,049 | 37,811 |
| Q1 2019 | 6,560 | 119,904 | 3,216 | 28,847 |
Reporting timetable going forward
With the rapidly widening project footprint in terms of mining jurisdictions, and commodity basket, as well as an active expansion plan, the Board has, in consultation with a number of major shareholders, concluded that it will in future present a more detailed consolidated operational and financial review on a six monthly period while continuing with a more frequent project update. As the business continues to mature, the Board believes this will provide shareholders with a more detailed view of the Company’s operational and project performance.
PlatCro operations – chrome, platinum and palladium (South Africa)
Following completion of the acquisition of the PlatCro chrome operation in mid-January 2019, the Company has successfully phased in management and operational control over the project. The chrome operation has already contributed positively to the group chrome earnings ahead of projections as the Company continues to drive efficiencies and enhance performance.
Importantly, Q2 2019 will be the first full quarter for this operation, and a more detailed operational and financial performance will be provided in the half yearly update, which the Company believes will be more reflective of the potential of this operation. The PlatCro PGM project is expected to commence with the production of platinum and palladium rich concentrates during Q2 2019, and holds the potential to double Jubilee’s current PGM ounce production over the life of the project.
Hernic PGM operations – platinum and chrome (South Africa)
The Hernic PGM operation maintained a strong performance despite the power outages suffered during February and the delay in reaching full operational levels following the festive period which affected the supply of feed material during January 2019. The operations have returned to full operational levels producing in excess of 2 000 PGM ounces for April 2019.
The Company maintained the operation’s low cost base producing at below USD400 per PGM ounce sold, to achieve an attributable project earnings for the quarter at GBP 1.91 million (ZAR 35 million).
DCM operation – chrome (South Africa)
Jubilee’s ground breaking DCM fine chrome recovery plant, constructed during Q4 2018, has successfully advanced its commissioning phase during Q1 2019, with the first chrome concentrate being produced to target concentrate grades in January 2019 and delivered to market.
The production rate continues to be ramped up with design throughput rates of 25 000 tonnes per month expected to be reached during early Q2 2019. This new fine chrome recovery plant is a significant milestone for Jubilee as it demonstrates to the industry the recoverability of fine chrome at saleable concentrate grades.
Kabwe operation – zinc, lead and vanadium (Zambia)
As previously announced on 21 March 2019, Jubilee has entered into an agreement with two subsidiaries of Glencore plc (the “Agreement”) to acquire Sable Zinc Kabwe Limited (the “Sable Refinery”) in Zambia (the “Acquisition”).
Closing of the Acquisition is conditional upon the fulfilment of certain conditions precedent as contained in the Agreement, including the approval of the Acquisition under the Zambian Competition Act. Jubilee has submitted its application for the approval of the Acquisition to the Zambian Competition and Consumer Protection Commission (the “Commission”) and has had positive engagements with the Commission to further its review of the application.
During this interim period, Jubilee’s project team has been granted access to the Sable Refinery to refine the implementation plan with a view to integrating Jubilee’s vanadium, zinc and lead refining process with the existing operations at the Sable Refinery once the condition relating to the Approval by the Commission as noted above has been satisfied.
Jubilee has entered into discussions with various potential suppliers of run of mine zinc rich material within the Kabwe region. The supply of such high grade zinc material offers the potential to increase the targeted zinc refining capacity in addition to the targeted Kabwe surface material. Jubilee would only consider such processing opportunities if they are value accretive and further enhances project operating margins. Each of these opportunities are carefully considered both commercially and technically by Jubilee and ranked based on potential value addition to the Kabwe Project.
One such potential supplier of zinc ore includes Star Zinc a company in partnership with Galileo Resources PLC (“Galileo”). Jubilee is in discussions with Galileo to evaluate the pre-classification at source of a high grade zinc stream which would be suitable for further refining at Jubilee.
General
Jubilee is pleased to announce that the Company has successfully facilitated the placement of all Jubilee shares held by BMR Group PLC (“BMR”) with a large institutional investment fund. BMR no longer has an interest in the ordinary share capital of Jubilee. This relates to the 2018 transaction whereby Jubilee acquired 29.01% of BMR as announced on 15 January 2018. The acquisition consideration at the time was satisfied through a combination of cash and the issue of new Jubilee shares.
