TIDMJLP
RNS Number : 0034B
Jubilee Metals Group PLC
08 February 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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Six Month Operations Update
H2 CY2021
Jubilee Metals Group PLC, a leader in metals processing with
operations in Africa (AIM: JLP/Altx: JBL), is pleased to announce
its unaudited operational results for the six months to 31 December
2021 ("H2 CY2021").
PGM Operations - South Africa
-- Jubilee successfully recommissioned on-time and in-budget the
significantly upgraded and fully integrated new Inyoni PGM(1)
processing facility in South Africa in November 2021
-- The GBP 17.5 million (ZAR 377 million) (2) investment program
enables the new integrated facility to produce up to 44 000 PGM
ounces (previously 30 000 PGM ounces) and 615 000 tonnes of
additional chrome concentrate per annum (complete rebuild of old
Hernic chrome plant)
-- The investment in Inyoni has materially increased the Group's
production capacity of PGM ounces and, importantly, increases the
proportion of the ounces produced that are fully attributable to
Jubilee along with the associated earnings compared with the
significant dilution of earnings caused by the Windsor PGM JV where
up to 40% of earnings was attributable to the JV partner
-- The new Inyoni processing facility is a state-of-the-art
plant that is uniquely able to process both a wide variety of
chrome and PGM containing mined ores as well as historical
tailings. Previously the plant was limited to processing only a
single feed source
-- The investment program included the construction of a new 80
000 tonnes per month Chrome processing facility ("OBB Chrome
Plant") integrated with the new upgraded Inyoni PGM circuit,
delivering a world class fully integrated chrome and PGM processing
facility able to process a wide variety of chrome and PGM
containing mined ores as well as historical tailings
-- The new integrated facility sets a strong foundation for
sustained future growth and is the culmination of Jubilee's
extensive investment into achieving class leading efficiencies
-- Jubilee was able to maintain contractual obligations during
the re-build of the program with 20 316 PGM ounces sold during H2
CY2021 despite scheduled production downtime during expansion at
Inyoni
-- Unit cost and revenues are skewed by a one-off release of PGM
stock as a lower grade PGM material
-- January 2022 saw monthly production levels up 66% compared
with H2 CY2021. The higher production levels reflect the new Inyoni
facility reaching full design capacities
-- During the period, Jubilee further increased its access to
both mined chrome and PGM material, as well as historical tailings,
which further supports Jubilee's targeted processing capacity
expansion into the Eastern Limb. This expansion would not only
offer an offset to the current transport cost incurred by this
material but also offers significant growth opportunities in this
PGM and chrome-rich region of South Africa
-- Overall, the investment in capital expenditure over this
period totalled 19.3 million (ZAR 414 million) with a further GBP
17.7 million (ZAR 380 million) invested in acquisitions, leaving
cash and cash equivalents at the end of the period under review
standing at GBP 21.7 million (ZAR 466 million), compared with GBP
19.6 million (ZAR 384 million) at the year ended 30 June 2021
1. PGM - 6 Element Platinum Group Metals including platinum,
palladium, rhodium, ruthenium, osmium and gold
2. Average conversion rates used for the period under review for
income statement purposes and the spot rate at period end for
balance sheet purposes
Chrome Operations - South Africa
-- Full integration of the new 80 000 tonne per month OBB Chrome
Plant with the expanded Inyoni PGM plant was achieved within budget
and in record time during November 2021, delivering an integrated
chrome and PGM processing facility with the unique ability to
process multiple feed sources
-- Production of chrome concentrate increased by 41% to 609 734
tonnes, illustrating the early contribution from the new OBB Chrome
Plant which was brought on-line at the end of Q2 2021 and ramped-up
during Q3 2021 before being integrated with the newly expanded
Inyoni Plant during November 2021
-- Chrome revenue was up 28% to GBP 30 million (ZAR 611 million) from H1 CY2021
-- Chrome earnings were up 15% to GBP 2 million (ZAR 42 million) from H1 CY2021
-- The new chrome beneficiation facility follows the completion
of the Windsor 8 Chrome Plant in October 2020 and which, combined,
expands Jubilee's chrome feed capacity to 250 000 tonnes per month
of both chrome run-of-mine ore and historical tailings
-- The increased chrome processing capacity directly contributes
to increased PGM feed supply as a tailings stream produced from the
chrome processing circuit
Copper Operations - Zambia
-- Sable Refinery copper production up 70% to 1 314 tonnes
compared with 774 tonnes for H1 CY2021 as part of the process to
ensure operational readiness to accept first copper concentrate
production from Jubilee's Project Roan
-- The commissioning of Jubilee's Project Roan copper
concentrator neared completion during the period with early
commissioning activities commencing. The project remains on
schedule to reach full production levels during the current period
targeting an annual production rate of 10 000 tonnes per annum
-- Jubilee's Sable Refinery reported revenue from the sale of
copper cathode of GBP 8 million (ZAR 165 million) up 57% from H1
CY2021
-- Sable Refinery achieved positive earnings as part of its
operational readiness activities with attributable operational
earnings of GBP 3.2 million (ZAR 66 million) up 70% from H2
CY2021
Leon Coetzer, Chief Executive Officer, commented:
" I wish to congratulate the Jubilee team for successfully
completing our fully integrated, world-class, Inyoni chrome and PGM
facility in South Africa, and for further delivering on our
Southern Copper Refining Strategy in Zambia. The current reporting
period is an example of Jubilee's continued commitment to invest
into our company to secure further growth and sustainability of our
operations.
Despite this challenging undertaking that lays our foundation
for future performance, the team delivered a stellar operational
performance.
"The Jubilee team has displayed exceptional commitment and
ingenuity by implementing on-time and in-budget the complex
integration of the newly constructed OBB Chrome Plant, with a fully
upgraded and expanded Inyoni PGM circuit. The safety of our team
was paramount during this complex project with the full project
delivered without a single lost time injury to any member of our
team, all while continuing to operate certain sections of the
facility to maintain contractual commitments for the delivery of
PGM ounces.
"This new circuit at Inyoni, expands our capability to produce
44 000 PGM ounces per annum, from 30 000 ounces previously,
reducing Jubilee's reliance on the Windsor JV agreement which led
to a significant dilution of earnings.
"Our chrome results already illustrate the early impact of the
new OBB Chrome Plant with an increase of 41% in the production of
chrome concentrate during the period under review. In addition, the
recovery of chrome from the various feed supplies produces an
upgraded PGM feed stream to our PGM recovery plant.
"Our Southern Copper Refining Strategy in Zambia has reached a
significant milestone with the commencement of commissioning
activities at our newly constructed copper concentrator situated in
Ndola (Project Roan) that delivers copper concentrate to our Sable
Refinery and third-party suppliers.
"The early material produced under Project Roan as part of our
Phase 1 implementation is already delivering results with a 70%
step-up in copper production at our Sable Refinery.
"I look forward to the Jubilee operational team's performance
over the next six months with the full impact of the Inyoni
facility being felt, as well as the targeted ramp-up at Roan
enabling us to take another major step in our commitment to achieve
annual copper production of 25 000 tonnes."
Combined Operational and Financial update
The Company saw the culmination of a continued period of planned
substantial infrastructure investment and integration across its
projects, which resulted in scheduled operational downtime at the
chrome and PGM operations to facilitate the construction and
integration of new processing circuits. The newly constructed and
commissioned fully integrated chrome and PGM facility has set a
tremendous platform for future growth for the Company. It sets the
example of the type of facility that the Company plans to develop
as it expands its chrome and PGM operational footprint in the
Eastern Limb of the Bushveld complex in South Africa. This is a
strategic development, demonstrating Jubilee's ability to continue
to grow its business by re-investing its earnings into high growth
projects.
During this period, the Company maintained its contractual
obligations to deliver the required PGM production despite its
Inyoni PGM operation only being partially operational to achieve 20
316 PGM ounces sold for H2 CY2021 (H1 CY2021: 21 975 ounces). The
PGM results are skewed and impacted by the staged decommissioning
and re-commissioning of the new integrated Inyoni facility over the
reporting period resulting in the one-off release of certain
lower-grade PGM inventories and refilling of the operational
pipeline over the period. The total PGM ounces sold included
in-process stock released as part of the recommissioning of the
expanded and upgraded PGM facility. The in-process stock was sold
as a lower grade PGM material and prior to the completion of the
newly commissioned final product cleaning circuit. This release of
inventory does not reflect the normally incurred full operational
revenues and cost and therefore skews the overall PGM unit cost and
PGM revenues delivered. These ounces are therefore excluded from
the calculation of the reported PGM unit cost below.
Chrome operations achieved 609 734 chrome concentrate tonnes for
H2 CY2021 (431 390 tonnes during H1 CY2021) on the back of
increased operational capacities following the commissioning of the
new OBB chrome beneficiation circuit which was fully integrated
with the newly commissioned upgraded Inyoni PGM facility during the
period under review.
In Zambia, copper production increased to 1 314 tonnes of copper
for H2 CY2021 (H1 CY2021: 774 tonnes) as part of ensuring
operational readiness to accept first copper concentrate production
from Project Roan. Project Roan's integrated copper concentrator
near completion during the reporting period with early
commissioning activities underway at the time of writing. The Roan
concentrator is targeted to ramp up during the current period to
deliver a targeted 10 000 tonnes of copper units annually. The
fully operational Sable Refinery delivered increased positive
earnings as part of its operational readiness activities with
attributable operational earnings of GBP 3.2 million for H2 CY2021,
compared to GBP 1.9 million for H1 CY2021.
The table below presents the combined unaudited operational
revenue and operational earnings performance for H2 CY2021:
COMBINED Project Project Project Project Jubilee Jubilee
revenue revenue earnings earnings attributable attributable
(GBP'000) (1) (ZAR'000) (GBP'000) (ZAR'000) earnings earnings
(2) (GBP'000) (ZAR'000)
H2 CY2020 51 949 1 101 115 31 174 662 531 29 500 627 336
----------- --------------- ----------- ----------- --------------- --------------
H1 CY2021 75 623 1 526 846 40 383 819 965 40 118 814 643
----------- --------------- ----------- ----------- --------------- --------------
H2 CY2021 61 813 1 264 325 20 215 413 480 19 002 388 663
----------- --------------- ----------- ----------- --------------- --------------
1- All amounts in this announcement are converted at average
conversion rates for the period for income statement purposes and
at the period end spot rate for balance sheet purposes
2- Attributable earnings represent Jubilee's net share of
operational earnings after distributions to JV partners and before
development costs
PGM Operations Update - South Africa
Jubilee's PGM operations consist of the Inyoni PGM operations
and the Windsor PGM JV (operated under a JV agreement with Eland
Platinum). Jubilee successfully completed and commissioned the new
fully integrated and enlarged chrome and PGM facility at the 100%
owned Inyoni during November 2021. The investment in Inyoni has
materially increased the Group's production capacity of PGM ounces
and, importantly, increases the proportion of the ounces produced
that are fully attributable to Jubilee along with the associated
earnings compared with the significant dilution of earnings caused
by the Windsor PGM JV where up to 40% of earnings was attributable
to the JV partner.
The new Inyoni facility integrates the new OBB Chrome Plant with
the expanded and upgraded Inyoni PGM operations. The Inyoni PGM
operations were expanded to increase its processing capacity by 45%
to 75 000 tonnes per month and to diversify its capacity with the
addition of a multi feed blending circuit and additional PGM
recovery circuit. This has allowed for the feeding and recovering
of PGMs from a wide variety of feed material. This new fully
integrated chrome and PGM circuit has overcome the historical
limitations of only being able to process material from the then
Hernic operations and historical waste. The new integrated chrome
and PGM facility increases Jubilee's Inyoni operational capacity to
615 000 tonnes per annum of chrome concentrate and 44 000 ounces of
PGM per annum. This increased Inyoni capacity reduces Jubilee
reliance on the Windsor PGM JV, reducing future earnings dilution
and exposure to significantly reduced efficiencies. Jubilee now
holds an annual PGM capacity that consists of up to 44 000 PGM
ounces at Inyoni (previously only 30 000 PGM ounces) with the
additional option of accessing the Windsor PGM JV at a capacity of
16 000 PGM ounces - this represents a material increase in the
anticipated production of PGM ounces which will be attributable to
Jubilee. Following the recommissioning of the integrated Inyoni
operation and the restocking of the in-process pipeline the
expected production target for the full financial period is
readjusted to between 43 000 to 48 000 PGM ounces depending on the
supplementary production achieved for the remaining period through
the Windsor PGM JV.
The investment by Jubilee into the completed integrated project
totalled GBP 17.5 million (ZAR 377 million) and it illustrates
Jubilee's continued commitment to investing into its operations to
creating the foundation for sustained future growth.
As announced on 3 and 4 June 2021, Jubilee's current PGM
operational footprint has been largely focused on the Western Limb,
a single area of the two main PGM areas in South Africa. The
Eastern Limb has been a key focus for Jubilee to expand its PGM
reach and operational capacity following the completion of its
fully integrated Inyoni facility. The additional PGM Supply
Agreements from the Eastern Limb entered into gives Jubilee access
to this area offering a platform to establish a dedicated
integrated chrome and PGM facility and to pursue further growth
opportunities.
The Eastern Limb PGM Supply Agreements are mostly based on the
LG6 chrome reef known for its high rhodium content accounting for
approximately 12% of a produced PGM ounce compared with as low as
7% of other chrome reefs. The PGM Supply Agreements has secured the
rights to long term PGM feed supply with the potential to produce
up to 14 500 PGM ounces per annum, with further growth
opportunities available. Jubilee will initially process the
increased PGM feed at the Company's expanded and newly integrated
Inyoni PGM operations, while pursuing the implementation of a
dedicated processing facility in the Eastern Limb. The temporary
increase in costs to transport this material to our Western Limb
Inyoni facility is offset by the strategic investment to secure the
material for the Eastern Limb strategy and the long-term growth it
offers.
During the period, the Company maintained its contractual
obligations to deliver the required PGM production despite its
Inyoni PGM operation only being partially operational to achieve 20
316 PGM ounces sold for H2 CY2021 (H1 CY2021: 21 975 ounces). The
PGM results are skewed and impacted by the staged decommissioning
and recommissioning of the new integrated Inyoni facility over the
reporting period resulting in the once of release of certain lower
PGM grade inventories and the refilling of the operational pipeline
over the period. The total PGM ounces sold included in-process
stock released as part of the recommissioning of the expanded and
upgraded PGM facility. The in-process stock was sold as a lower
grade PGM material and prior to the completion of the newly
commissioned final product cleaning circuit. This release of
inventory, which does not reflect the normally incurred full
operational cost, skews the PGM unit cost and PGM revenues
delivered. These ounces are excluded from the calculation of the
reported PGM unit cost below.
Operational project unit costs expressed as US$ per PGM ounce
produced consisted of US$ 560 per ounce processing unit cost and a
US$ 262 per PGM ounce transport cost for the material sourced from
the Eastern Limb. The average PGM basket price realised per ounce
sold reduced by 35% over the period but showed a strong recovery at
the end of the period which was sustained during January 2022.
The table below presents the combined unaudited operational
revenue and operational earnings performance for PGMs for H2
CY2021:
PGM PGM ounces Project Project Project Project Jubilee Jubilee Unit
delivered revenue revenue earnings earnings attributable attributable cost
(GBP'000) (ZAR'000) (GBP'000) (ZAR'000) earnings earnings / PGM
(1) (2) (ZAR'000) oz (US$)
(GBP'000)
H2 CY2020 28 187 36 593 776 032 26 959 572 782 26 387 560 450 470
----------- ----------- ----------- ----------- ----------- ------------- ------------- ----------
H1 CY2021 21 975 47 155 956 869 36 725 746 657 36 459 741 335 658
----------- ----------- ----------- ----------- ----------- ------------- ------------- ----------
822
H2 CY2021 20 316 23 885 488 544 14 966 306 117 13 753 281 300 (3)
----------- ----------- ----------- ----------- ----------- ------------- ------------- ----------
1. All amounts in this announcement are converted at average
conversion rates for the period for income statement purposes and
at the period end spot rate for balance sheet purposes
2. Attributable earnings represent Jubilee's net share of
operational earnings after distributions to JV partners and before
development costs
3. Unit cost includes a transport cost component of US$262 per PGM ounce
Chrome Operations Update - South Africa
As previously announced, in November 2020 Jubilee commenced the
construction of an additional 80 000 tonnes per month OBB Chrome
Plant, which on completion increased Jubilee's overall processing
capacity to 250 000 tonnes of chrome ore and tailings per month.
The facility consists of four integrated chrome recovery circuits
to maximise chrome efficiencies, which includes Jubilee's fine
chrome operation.
The final integration of the new OBB Chrome Plant into the new
and upgraded Inyoni PGM facility was completed in November 2021.
The operational levels of the OBB Chrome Plant were largely
maintained during the rebuild and commissioning of the new Inyoni
facility with the produced PGM discard from the OBB Chrome Plant
stockpiled for later reintroduction into the new fully integrated
chrome and PGM facility.
C hrome operational earnings for H2 CY2021 increased by 15%, to
GBP 2 million from H2 CY2021. Chrome revenue for H2 CY2021
increased by 28% to GBP 30 million from H2 2021.
The table below presents the combined unaudited operational
revenue and operational earnings performance for chrome for H2
CY2021:
CHROME Chromite Project Project Project and Project
concentrate revenue revenue Jubilee attributable and Jubilee
produced (GBP'000) (1) (ZAR'000) earnings attributable
Tonnes (GBP'000) earnings
(ZAR'000)
H2 CY2020 319 834 11 565 244 435 1 320 28 522
------------- ----------- --------------- ---------------------- --------------
H1 CY2021 431 390 23 340 468 153 1 762 35 576
------------- ----------- --------------- ---------------------- --------------
H2 CY2021 609 734 29 872 611 004 2 034 41 600
------------- ----------- --------------- ---------------------- --------------
1- All amounts in this announcement are converted at average
conversion rates for the period for income statement purposes and
at the period end spot rate for balance sheet purposes
Chrome prices continued to be volatile during the period under
review due to the disruptions in the supply chain over the
sixth-month period. These price fluctuations are expected to
continue over the next six months as the world emerges from the
Covid-19 pandemic and supply and demand fundamentals are better
matched.
Zambian Operations Update
The roll-out of Jubilee's copper and cobalt strategy offers the
potential of significant continued earnings growth in addition to
the achievements of its PGM and chrome operations.
Background
The Company's Kabwe Project combined with its multi-metal Sable
Refinery establishes Jubilee's fully integrated multi-metal
recovery and refining operational footprint in Zambia. The Sable
Refinery, which acts as a central processing facility for
third-party material in the region, gives access to a current
resource comprising of an estimated 6.4 million tonnes of surface
waste assets containing zinc, lead and vanadium pentoxide in
addition to the approximately 300 million tonnes of copper and
cobalt tailings secured in 2020 .
As previously announced, during 2020, Jubilee entered into joint
venture agreements to secure rights to process over 300 million
tonnes of copper and cobalt containing tailings in Zambia. The
copper and cobalt tailings are located in three central locations
named Project Roan, Project Lechwe and Project Elephant.
Jubilee aims to construct a processing facility at each of the
three locations. The scope of the processing facilities will be
determined by the refining capacity at its Sable Refinery,
currently standing at 14 000 tonnes per annum. Jubilee has a set
target to expand its access to refining capacity, to achieve a
targeted 25 000 tonnes of copper units per annum.
During H1 2021, the first of the processing facilities entered
its construction phase at Project Roan, which targets an annual
production rate of 10 000 tonnes of equivalent copper units.
The Project Roan copper concentrator neared completion during
the reporting period with early commissioning activities
commencing. The completion of construction has commenced well post
the period, with the final integration of the copper oxide and
copper sulphide circuit targeted for completion during March 2022
to complete the ramp-up of the fully integrated circuit during the
current period.
The table below presents the combined unaudited operational
revenue and operational earnings performance for copper for H2
CY2021:
COPPER Copper units Project Project Project and Project
produced revenue revenue Jubilee attributable and Jubilee
Tonnes (GBP'000) (1) (ZAR'000) earnings attributable
(GBP'000) earnings
(ZAR'000)
H2 CY2020 614 3 791 80 648 1 793 38 365
------------- ----------- --------------- ---------------------- --------------
H1 CY2021 774 5 128 101 824 1 897 37 732
------------- ----------- --------------- ---------------------- --------------
H2 CY2021 1 314 8 056 164 776 3 215 65 762
------------- ----------- --------------- ---------------------- --------------
1- All amounts in this announcement are converted at average
conversion rates for the period for income statement purposes and
at the period end spot rate for balance sheet purposes
Project Lechwe Update - Zambia
During the period, the completion of the design work for the
Company's second copper processing facility, Project Lechwe,
whereby Jubilee has secured the rights to approximately 150 million
tonnes of copper containing surface tailings, further progressed
with final pilot runs under way to confirm the design work. Project
Lechwe targets to reach the production of 7 500 copper units per
annum in addition to Project Roan by Q2 of CY2023.
8 February 2022
For further information visit 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 Proprietary Limited
Sharon Owens
Tel +27 (0) 11 011 9200
Lead PR & IR Adviser - Tavistock
Jos Simson/ Gareth Tredway/Charles Vivian
Tel: +44 (0) 207 920 3150
Notes to Editors
Jubilee Metals Group is a diversified metal recovery business
with a world-class portfolio of projects in South Africa and
Zambia. We create value for all stakeholders through the
transformation of mining liabilities into profitable assets in a
manner that addresses mining's historical footprint and improves
the quality of life for surrounding communities. Our distinguishing
value proposition is our net positive impact on all stakeholders
and the environment.
Our business model focuses on the retreatment and metals
recovery from mine tailings, waste, slag, slurry and other
secondary materials generated from mining operations. In effect,
while extracting maximum financial returns, we responsibly
rehabilitate environments scarred by the surface footprint of
historical mining operations and solving air and water pollution
issues associated with those installations.
The Company's expanding multi-project portfolio provides
exposure to a broad commodity basket including Platinum Group
Metals ('PGMs'), chrome, lead, zinc, vanadium, copper and
cobalt.
Jubilee is listed on the London Stock Exchange's AIM (ticker:
JLP) and the Johannesburg Stock Exchange (ticker: JB).
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