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Quarterly Operations Update
Jubilee Metals Group Plc
(“Registration number: 4459850”)
AIM share code: JLP
AltX share code: JBL
ISIN: GB0031852162
(“Jubilee” or “the Company”)
Quarterly Operations Update
Jubilee is pleased to announce an operations update for its metals recovery division, Jubilee
Processing Proprietary Limited (“JPL”) for Q4 2017.
Highlights
- Hernic operational earnings increased 94 % to GBP 0.97 million (ZAR 17.47 million)
(Q3 2017: GBP 0.50 million (ZAR 8.60 million))
- Hernic unit cost per PGM ounce produced reduced to USD 382 (Q3 2017: USD 476)
- Hernic PGM(1) production up 31 % to 3 755 ounces (Q3 2017: 2 874 ounces)
- Hernic project revenue up 33 % to GBP 2.05 million (ZAR 37.01 million) (Q3 2017:
GBP 1.54 million (ZAR 26.58 million))
- JPL operations revenue up 24 % to GBP 3.30 million (ZAR 59.87 million) (Q3 2017:
GBP 2.67 million (ZAR 46.11 million))
- JPL operations earnings up 43 % to GBP 1.22 million (ZAR 22.12 million) (Q3 2017:
GBP 0.85 million (ZAR 14.73 million))
(1) = Platinum Group Metals (6E platinum, palladium, rhodium, iridium, osmium, and gold)
Leon Coetzer, Chief Executive commented:
“The Jubilee team has delivered an exceptional performance despite the traditional operational
slowdown over the festive period.
Our Hernic operation has continued to deliver significant operational improvements quarter on
quarter, this despite the budgeted increased maintenance and operational slow down over the
festive period.
We have implemented necessary process upgrades at our DCM operations to allow for a more
flexible operation to expand the processing of 3rd party material. We will also be implementing
operational efficiency enhancements developed by our in-house technical teams. I look forward to
rolling-out these enhancements across our project portfolio.
Our due diligence on the Kabwe project is progressing well with the second round of leach tests
concluded, which have confirmed the high recoverability of the lead, zinc and vanadium contained in
the surface resource. I expect to receive the metal refining results shortly and then to be in a
position to conclude our way forward on the project.”
HERNIC OVERVIEW
The Hernic operations performance continued to improve significantly quarter on quarter
despite the extended plant maintenance and operational slow down during the festive
period.
The Q4 2017 data shows a further sharp increase in project earnings coupled with a drop in
unit cost to below the USD400 per PGM ounce making the Hernic project one of the lowest
cost platinum producers in the industry.
The overall debt incurred towards the construction and commissioning of the Hernic project
has, to date, reduced to GBP 2.10 million (68 % reduction).
The table below presents the comparative quarterly performance of the Hernic operation
for 2017:
Jubilee Jubilee
Tailings PGM Project Project Project Project Unit cost /
1) 2) 3) attributable attributable
processed ounces revenue ( revenue( earnings( earnings PGM oz
earnings earnings
tonnes delivered (GBP'000) (ZAR'000) (GBP'000) (ZAR'000) (USD)
(GBP'000) (ZAR'000)
Total Q2
80 828 808 459 7.604 (110) (1.928) (110) (1.928) 901
2017
Total Q3
105 673 2 874 1.539 26.581 496 8.592 496 8.592 476
2017
Total Q4
121 644 3 755 2.047 37.011 965 17.466 965 17.466 382
2017
Total 2017 308 145 7 437 4.045 71.196 1.351 24.130 1.351 24.130 475
Revenue / Unit cost /
Earnings /
Project PGM oz PGM oz PGM oz
Summary (USD) (USD) (USD)
Q4 2017 724 382 342
(1)= Revenue from the current project phase - 100% attributable to Jubilee until full capital recovery. Revenue is projected based on latest
average PGM market prices and USD exchange rates and results are only final once final Quotational Period has passed
(2)= Average monthly conversion rates used
(3)= Project Earnings include all incurred operational costs including management services and mineral royalties
DCM overview
The DCM operational performance was affected by a significant plant upgrade of the
chrome recovery circuit. The plant upgrade was both to further increase the operational
flexibility of the chrome recovery circuit as well as to increase the crushing capacity for the
processing of 3rd party run-of-mine material (“ROM”). The improved processing flexibility
was required to compensate for the increased feed variance introduced by the processing of
3rd party ROM. The chrome processing plant upgrades interrupted processing of the ROM
material for approximately 8 weeks before resuming in January 2018.
The new fully commissioned crushing capacity now offers DCM the opportunity to process a
wider variety of feed material without sacrificing overall plant throughput.
A further processing upgrade to enhance the recovery of very fine chrome from tailings will
be implemented during Q1 2018. This process upgrade was developed and tested by
Jubilee’s internal process development arm and holds significant business benefits for the
wider Jubilee tailings retreatment projects. The process enhancements are expected to
significantly improve the overall recovery of chrome from tailings.
Project earnings numbers for Q4 exclude project related capital costs (previously expensed
through the operating cost and now capitalised by DCM) as per the updated contractual
relationship with DCM. Despite the plant upgrades, project earnings from chrome for Q4
2017 remained positive. Jubilee’s reduced attributable earnings reflect the interruption in
the processing of 3rd party ROM.
The table below presents the operational quarterly performance of the DCM operation for
2017:
Jubilee Jubilee
Chromite Jubilee Jubilee working working
Project Project Project Project
concentrate 1) 2) attributable attributable capital loan capital loan
revenue revenue ( earnings( earnings
produced earnings earnings repayments repayments
(GBP'000) (ZAR'000) (GBP’000) (ZAR’000)
tonnes (GBP’000) (ZAR’000) received received
(GBP’000) (ZAR’000)
Total Q1
14 973 3.372 55.223 2.407 39.400 408 6.664 - -
2017
Total Q2
17 659 1.348 22.731 386 6.504 399 6.727 175 3.334
2017
Total Q3
15 134 1.129 19.526 184 3.173 356 6.139 - -
2017
Total Q4
11 788 1.254 22.858 508 9.307 254 4.654 - -
2017
Total 2017 59 554 7.103 120.338 3.485 58.384 1.417 24.184 175 3.334
(1)= Average monthly conversion rates used
(2) = Project earnings include project expenditure on plant and equipment
Project Pipe-Line
Jubilee continues to refine its project execution schedule for the various pipe-line surface
processing projects. These pipe-line projects offer significant growth potential in the short
term (2 years) and we continue to actively pursue further opportunities.
DCM Platinum Project
Jubilee conducted an in depth review for the recovery of platinum at DCM. The review
included several pilot and full commercial size trials to evaluate the possible joint venturing
(“JV”) with neighbouring platinum producers to benefit from their existing infrastructure.
Jubilee was unable to reach a commercially acceptable agreement with the potential JV
partners. Jubilee has concluded that a dedicated process plant for Dilokong is the optimal
commercial strategy and will target to commence execution of the project during Q2 2018
depending on regulatory approvals to commence construction. A processing plant targeting
approximately 10 000 PGM ounces per annum is envisaged.
Funding for the project will be secured via the existing project debt funding agreement that
Jubilee secured with Riverfort Capital and Jubilee’s current cash position.
Kabwe Project
The Company’s on-going due diligence of the Kabwe project has confirmed our
understanding of the significant size and quality of the various surface assets. We have
completed further metal recovery trials, which again confirmed the leachability of the zinc,
lead and the vanadium. Our final circuit trials are focussing on the refining of the leached
metals, which we expect to conclude over the next two weeks, in order to confirm the
refining processing strategy. We are working with the BMR team to establish the optimal
recovery route for extracting the metals both from a commercial perspective as well as in an
environmentally responsible manner.
PlatCro Platinum Project
Jubilee is currently engaged in the PlatCro option study. Similar to the DCM study, the
option study includes laboratory and pilot plant trials. The final round of the plant trials has
been concluded with results expected in the short term.
Jubilee looks forward to updating its shareholders on the execution time-lines for these
exciting projects.
30 January 2018
This announcement contains inside information for the purposes of Article 7 of EU Regulation
596/2014.
The financial information in this announcement is unaudited.
Contacts
Jubilee Metals Group plc
Colin Bird/Leon Coetzer
Tel +44 (0) 20 7584 2155 / Tel +27 (0) 11 465 1913
Andrew Sarosi
Tel +44 (0)1752 221937
JSE Sponsor
Sasfin Capital, (a member of the Sasfin group)
Sharon Owens
Tel +27 (0) 11 809 7500
Nominated Adviser
SPARK Advisory Partners Limited
Mark Brady/Andrew Emmott
Tel: +44 (0) 203 368 3555
Broker
Beaufort Securities Limited
Jon Belliss
Tel: +44 (0) 20 7382 8300
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