Jubilee Platinum: Buy Says Midas

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Jubilee Platinum (LSE:JLP), a platinum producer operating in South Africa, saw its shares soaring to a third of its’ previous close.

JLP stocks are trading at 16.35p as of press time, up by 4.125p from last Friday’s close.

An article about the potential of the company referred the share price of JLP as a “bargain” considering that the company holds a 63% interest in Tjate Mine, said to contain some 65 million ounces of platinum group elements (PGE).

Platinum is currently priced at US$1,500 per ounce.

Tjate Project

The Tjate mine is a 5,000-hectare located south of the Merensky and UG2 reefs being mined Anglo Platinum and Impala Platinum, two of the biggest players of in the industry. This is the largest undeveloped platinum projects in the world, the article said.

Technological Advantage

The investment advice mentioned exclusive rights to a smelting process acquired by Jubilee Platinum, which, according to Hart, gives JLP the edge over the current big players.

JLP holds the licence to use ConRoast, a “unique smelting” technique, exclusively until 2020. South Africa state-owned minerals technology laboratory Mintek holds the patent, which JLP plans to exploit.

The technology is able to efficiently process the ores taken from the UG2 reef and elsewhere, which contain chromium and nickel, among others. Most platinum ores now come from UG2 as resources from the Merensky reef is dwindling.

A ConRoast smelter is currently underway with plans for a second plant is being constructed by JLP to provide a processing plant for ores mined in the UG2. The smelter will be commercialized to service companies as Northam Plantinum and Sylvania Platinum in processing their finds.

Financial Estimates

Because of this technology, JLP estimates a net present value of US$1.7 billion, or US$500 million more than its US$1.2 billion assumption for its Merensky find in the 20 years total mine life.

MIDAS Verdict

The article suggest MIDAS has taken account of the prior trading history of Jubilee Platinum, saying it had been valued as high as 124p in 2007 at a time when it did not have much to offer. Now, with supply of platinum becoming scarcer along with more efficient technqiues, JBL are in a greater position.

Company Spotlight

Jubilee Platinum is a dually listed in London Stock Exchange’s Alternative Investment Market and the Johannesburg Stock Exchange in South Africa, with a primary focus on platinum and other PGE.

References
↑ Jubilee Platinum Tjate Project
↑ ConRoast Smelting Technology
 Company Overview

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