TIDMJLP
RNS Number : 7351L
Jubilee Metals Group PLC
14 January 2021
Jubilee Metals Group PLC
("Jubilee" or the "Company")
Registration number (4459850)
AltX share code: JBL
AIM share code: JLP
ISIN: GB0031852162
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR). 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.
Six Month Operations Update
H2 2020
Further Record Growth Achieved
Jubilee, the AIM and Altx traded metals processing company, is
pleased to announce its unaudited operational results for the six
month period ended 31 December 2020 ("H2 2020").
Highlights
-- Jubilee's PGM(3) and Chrome operational earnings(1) for H2
2020 increased by a record 123% to GBP 28.4 million (126% increase
to ZAR 603.3 million(2) ) from H1 2020
-- Jubilee's attributable PGM and Chrome revenue(1) for H2 2020
increased by 64% to GBP 48.2 million (66% increase to ZAR 1
billion) from H1 2020
-- Jubilee's Sable Refinery achieves early earnings from its
copper and cobalt production as part of securing operational
readiness to accept first production from Project Roan, achieving
attributable operational earnings of GBP 1.8 million (ZAR 39
million)
-- Both the chrome and PGM operations deliver record operational performance
-- The implementation of Jubilee's copper strategy to achieve 25
000 tonnes of copper units per annum gains momentum with the
commencement of the construction of Project Roan's copper
concentrator with phase 1 expected to come on line during Q1
-- Jubilee secures in excess of 288 million tonnes of copper
tailings with the further addition of an approximate 18 million
tonnes of tailings in December 2020
-- During the period H2 2020 Jubilee successfully completed the
addition of its new 35 000 tonne per month Windsor 8 chrome
operation where production commenced in October 2020 and commenced
the construction of the new 80 000 tonne per month chrome operation
adjacent to its Inyoni PGM operation
-- Jubilee approved the further expansion of its PGM Inyoni
operation which will commence in February 2021 and is targeted for
completion in April 2021
1- Combined revenue and earnings exclude revenue and earnings
attributable to joint venture partners
2- 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
3- PGM - 6 Element Platinum Group Metals including platinum,
palladium, rhodium, ruthenium, osmium and gold
PGM Operations
-- PGM project operational earnings (4) up 119% to GBP 27.4
million (122% increase to ZAR 581 million) from H1 2020
-- PGM attributable project revenue (4) up 74% to GBP 36.6
million (77% increase to ZAR 776 million) from H1 2020
-- PGM concentrate(4) delivered reached 28 187 PGM ounces up 49% from H1 2020
-- Increased PGM production, including record production at
Inyoni during December, achieved despite planned December
operational stoppage by the operation's JV PGM partner
4- All numbers reflect only production attributable to Jubilee
and excludes that portion of production attributable to its JV
partner
Chrome Operations
-- Chrome project earnings increase sharply to GBP 1 million (ZAR 22 million) from H1 2020
-- Chrome project revenue up 37% to GBP 11.6 million (39% to ZAR 244.4 million) from H1 2020
-- Chrome concentrate produced up 67% to 319 834 tonnes for H2 2020
-- The increase in chrome earnings are supported by the
implementation of the new fixed margin chrome processing
contracts
-- New Windsor 8 operations commenced production in October 2020
-- Jubilee has commenced with the construction of a new 80 000
tonne per month chrome operation adjacent to its Inyoni PGM
operation
Copper Operations
-- Jubilee's Sable Refinery achieves early earnings from its
copper and cobalt production as part of securing operational
readiness to accept first production from Project Roan, achieving
attributable operational earnings of GBP 1.8 million (ZAR 39
million)
-- Jubilee's copper strategy gains momentum with the
commencement of the construction of the new copper concentrator as
part of its Project Roan
-- Jubilee's Sable Refinery has completed the ore processing
facility and is fully operational ready to accept the increased
feed from Project Roan
-- Project Roan will be commissioned over three phases with the
first phase targeted to commence delivery of first copper units to
Sable Refinery by end February 2021
Leon Coetzer, Chief Executive Officer, commented: "Jubilee has
delivered an exceptional operational performance during a time that
has seen tremendous challenges overshadowed by the onslaught of the
COVID-19 pandemic.
"The past six months has seen both Jubilee's PGM and chrome
operations maturing as well as its copper strategy gaining
significant momentum with the commencement of the construction of
the first of a targeted three, copper concentrators in Zambia in
line with our goal to take a leading role in the processing of
surface tailings in the country.
"The Jubilee team has demonstrated its resilience and innovation
during this time with the significant progress made with the
roll-out of our copper strategy while growing our PGM and chrome
business by delivering an exceptional operational performance.
"During the period key milestones were achieved with the
transformation of our chrome operations to secure a more
sustainable earnings margin while significantly growing the
business; achieving record PGM operational results and driving
forward the implementation of our copper and cobalt strategy in
Zambia.
"The expected significant ramp-up of our copper production in
Zambia has the clear potential to continue to grow Jubilee's
earnings on the back of the commissioning of both of our copper and
cobalt refining circuits and the expected ramp-up of our copper
production, particularly with the recent rebound, and market
expectations, of strong copper prices.
"As previously stated we have set ourselves a target to achieve
the production of 25 000 tonnes of copper per annum within the next
4 years after securing nearly 300 million tonnes of copper and
cobalt tailings. Our Project Roan is the first of three copper
concentrators that we target to implement to achieve this goal.
Jubilee is perfectly poised to play a commanding role in the
processing of copper as we also look to further implement our
strategy more widely."
Combined Operational and Financial update
Jubilee's operational growth during H2 2020 exceeded
expectations despite the challenges of the COVID-19 pandemic.
During H2 2020, the Company outperformed the strong growth
trajectory in H1 2020, delivering a 123% increase in its PGM and
chrome earnings for the period from H1 2020.
Beyond growth in revenue and earnings in its PGM and chrome
operations, Jubilee has continued to strengthen its asset base with
the addition of its copper and cobalt resources in Zambia, which is
in line with the Company's strategy to target other geographical
areas and metals.
The role-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. To date, Jubilee
has secured in excess of 288 million tonnes of copper and cobalt
containing tailings located around three main areas in Zambia.
Jubilee targets to implement a processing facility at each of these
locations with Project Roan being the first to commence with
construction. The combined production potential of the three
targeted facilities is well in excess of Jubilee's Sable Refinery
capacity of 14 000 tonnes of copper cathode per annum. It is
Jubilee's objective to expand its overall capacity to 25 000 tonnes
of copper per annum over the next 4 years.
The table below presents the combined operational revenue and
earnings performance for H2 2020:
COMBINED Project revenue Project revenue Jubilee attributable Jubilee attributable
PGM AND (1) (GBP'000) (ZAR'000) earnings (1) earnings (ZAR'000)
CHROME (1) (GBP'000)
H1 2019 14.361 263.873 5.641 (2) 103.713
---------------- ---------------- --------------------- ---------------------
H2 2019 24.966 461.669 8.299 153.501
---------------- ---------------- --------------------- ---------------------
H1 2020 29.441 615.028 12.760 266.554
---------------- ---------------- --------------------- ---------------------
H2 2020 48.158 1 020.467 28.418 603.343
---------------- ---------------- --------------------- ---------------------
1- Combined revenue and earnings exclude revenue and earnings
attributable to joint venture partners
Chrome Operations update - South Africa
Jubilee's chrome operations include DCM Chrome, Windsor Chrome
and Inyoni Chrome following the acquisition by Inyoni of the chrome
rights in November 2019. C hrome earnings increased sharply to GBP1
million (ZAR 22 million) and chrome revenue increased by 37% to GBP
11.6 million (39% to ZAR 244.4 million) from H1 2020. This sharp
increase was mainly driven by efficiency improvements and adjusting
third party ore supply agreements to better reflect the
fluctuations in the chrome price and was achieved despite chrome
prices being down 18% in aggregate the period.
The table below presents the combined operational revenue and
earnings performance for chrome for H2 2020:
CHROME Chromite Project Project Jubilee Jubilee
concentrate revenue revenue attributable attributable
produced (GBP'000) (ZAR'000) earnings earnings
Tonnes (GBP'000) (ZAR'000)
H1 2019 164 936 6.599 121.188 1.576 28.907
------------- ----------- ----------- -------------- --------------
H2 2019 186 249 8.881 164.138 169 3.134
------------- ----------- ----------- -------------- --------------
H1 2020 191 995 8.422 175.938 223 4.660
------------- ----------- ----------- -------------- --------------
H2 2020 319 834 11.565 244.435 1.005 21.985
------------- ----------- ----------- -------------- --------------
Chrome prices continued to remain volatile due to the
disruptions in the supply chain over the sixth month period, and
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.
Platinum Group Metals ("PGM") Operations update - South
Africa
Jubilee's PGM operations consist of the Inyoni and Windsor JV
PGM operations. PGM project revenue is up 74% to GBP 36.6 million
(ZAR 776 million) from H1 2020. PGM project operational earnings is
up 119% to GBP 27.4 million (122% to ZAR 581 million) from H1 2020.
Jubilee's Inyoni operations continued to operate through-out the
December period with only the Windsor JV operations shutting, as
planned, for part of the December period. Jubilee's Inyoni
operations continue to achieve exceptional efficiencies achieving
an all-time record production in excess of 3 000 PGM ounces for the
month of December.
The table below presents the combined operational revenue and
earnings performance for PGMs for H2 2020:
PGM Tailings PGM ounces Project Project Jubilee Jubilee Unit
processed delivered revenue revenue attributable attributable cost
tonnes (GBP'000) (ZAR'000) earnings earnings / PGM
(GBP'000) (ZAR'000) oz (USD)
H1 2019 237 035 11 559 7.762 142.686 4.065 74.806 412
----------- ----------- ----------- ----------- -------------- -------------- ----------
H2 2019 553 672 21 082 16.085 297.530 8.129 150.368 544
----------- ----------- ----------- ----------- -------------- -------------- ----------
H1 2020 481 353 19 682 21.019 439.091 12.537 261.894 537
----------- ----------- ----------- ----------- -------------- -------------- ----------
H2 2020 595 664 28 187 36.593 776.032 27.413 581.358 524
----------- ----------- ----------- ----------- -------------- -------------- ----------
The PGM basket price remained buoyant during the period, being
22% higher in aggregate, with demand continuing to outweigh supply
and the PGM basket price is expected to remain well supported.
Integrated Kabwe Operations, Zambia - copper, cobalt, zinc, lead
and vanadium update
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 approximate 288 million tonnes of copper and cobalt tailings
secured in 2020 .
The acquisition of the Kabwe Project served as an entry point
for Jubilee into Zambia presenting the Company with a very well
placed platform from which to pursue the various base metal
opportunities presented by the country and to begin actively
engaging with third party suppliers to develop strategic
partnerships as part of the expansion of the Integrated Kabwe
Operations .
During 2020, Jubilee entered into joint venture agreements to
secure rights to process approximately 288 million tonnes of copper
and cobalt containing tailings, with the various mining rights
holders. The copper and cobalt tailings are located in three
central locations dubbed Project Roan, Project Elephant and Project
Elephant 2. Jubilee targets to construct a processing facility at
each of the three locations. The extent of the processing
facilities are determined by the refining capacity at its Sable
Refinery currently limited to 14 000 tonnes per annum. Jubilee has
set a target to expand its access to refining capacity to achieve
25 000 tonnes of copper units per annum. The first of the
processing facilities has entered its construction phase at Project
Roan which targets an annual production rate of 10 000 tonnes of
equivalent copper units. The processing facility will be
commissioned over three phases to accelerate the delivery of copper
units for further refining to Jubilee's Sable Refinery. Phase 1 is
expected to commence delivery of the first copper units to Sable
Refinery by end February 2021 which results in the first
significant increase in production at the Sable Refinery targeting
to achieve 400 tonnes per month. Sable Refinery is fully
operational and ready to commence refining of Project Roan's
material and has already achieved earnings of GBP 1. 8 million (ZAR
39 million) from production during this phase.
Copper prices have been volatile in recent years, but the price
recovered strongly in 2020 touching on a 5 year high and market
forecasts suggest that it will remain strong. At current prices and
current operating margins maintained at the Sable Refinery for the
production of copper cathode and cobalt concentrate, combined with
the performance of Jubilee's large scale piloting test programme on
copper tailings, the project holds the potential to more than
double Jubilee's current earnings profile.
Copper Strategy
Having demonstrated Jubilee's ability to deliver significant
returns in Zambia, this momentum is expected to be maintained going
forward as we look to focus our efforts on implementing the copper
strategy on a global scale, using strong cash flows from our
operating activities.
The recent rebound in the copper price saw it reach a seven year
high at the beginning of December 2020, with analysts predicting
further significant growth over the next 12-24 months driven by
several long-term trends. An increased environmental agenda
globally and electrification are at the centre of this with the
proliferation of electric vehicles, the increased use of renewable
energy sources, energy efficiency and increased consumption of
electronics.
Jubilee has positioned itself to ensure that it is well placed
to take advantage of this growing market. The success in Zambia to
date is a clear demonstration of the team's technical know-how and
IP when it comes to processing copper tailings and the Company will
continue to assess opportunities to implement the copper strategy
on a global scale, replicating this success in new
jurisdictions.
COVID 19 update
The COVID-19 crisis continues across the world and we continue
to enforce very strict safety measure at all of our operations
towards safe guarding our employees. Whilst these measures have
been effective to date we continue to monitor the situation and act
where appropriately taking advice from both the industry bodies and
the authorities. The recently update regulations as announced by
the South African President affecting the closure of the South
African borders has not had a direct impacted on our operations as
yet but we continue to monitor the situation.
14 January 2021
**ENDS**
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 - Sasfin Capital (a member of the Sasfin group)
Sharon Owens
Tel +27 (0) 11 809 7500
PR & IR Adviser - St Brides Partners Limited
Catherine Leftley/Beth Melluish
Tel +44 (0) 20 7236 1177
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