Wrap Text
Processing agreement update
JUBILEE PLATINUM PLC
AIM: JLP
JSE: JBL
Registration number: 4459850
ISIN: GB0031852162
("Jubilee")
JUBILEE TAKES MAJOR STEP IN IMPLEMENTING ITS MINE-TO-METAL
STRATEGY
HIGHLIGHTS
Jubilee expects to start processing material from Dilokong
Chrome Mine tailings and the tailings from current operations
(collectively “Material”) in the short term at Phokathaba’s
Smokey Hills Concentrator (owned by Platinum Australia).
In acquiring access to this facility, Jubilee has advanced the
project by some 18 months and eliminated the requirement for
significant new capital.
The PGE concentrate produced at the Smokey Hills Concentrator
(the “Concentrator”) will be Jubilee’s first own PGE
concentrate feed for processing using its unique ConRoast
process.
Jubilee finalises agreement with Corridor Mining Resources
(Pty) Ltd (“CMR”) to purchase the PGEs in the Material for the
recovery of PGE’s to concentrate, for its own account.
The purchase price payable for the Material will be based on a
platinum-price-related percentage of the revenue that Jubilee
receives from the sale of the PGE concentrate recovered.
Jubilee will be targeting a Material processing rate of up to
50,000 tonnes per month to produce a projected steady state
1686 oz. PGEs per month.
The previously announced memorandum of understanding (“MOU”)
for toll processing of Material to recover PGE concentrates is
now unconditional.
Leon Coetzer, CEO of Jubilee Platinum, commented: “This is a
major milestone for Jubilee. We will be the only junior
platinum company that can process tailings to produce a
concentrate, which we can smelt using our unique ConRoast
process. We are delighted to have entered into this MOU with
Platinum Australia regarding the use of their concentrator and
that Macquarie Bank has given its support for the transaction.
The MOU allows Jubilee to commence processing the Material
without requiring significant capital to establish a dedicated
processing plant.
This initiative will be the first PGE asset that we bring into
production and we expect to follow up other pending and new
acquisitions in the new year for concentrate production.”
TOLL PROCESSING OF MATERIAL
Jubilee has entered into binding and exclusive MOU between
that Jubilee’s subsidiary Pollux Investment Holdings (Pty) Ltd
(“Pollux”) and Phokathaba (Pty) Ltd (“Phokathaba”) (together
the “Parties”) –announced 9 October 2012 – to utilise the
Concentrator for the toll processing of the Material to
recover PGE concentrates. The MOU is now unconditional having
received approval from Phokathaba’s senior debt provider –
Macquarie Bank Limited.
KEY TERMS OF THE MOU:
Phokathaba will commit the full capacity of the Concentrator
to Pollux for the processing of Material for a minimum period
of 8 months (“Exclusivity Period”), the Exclusivity Period
will commence 30 (thirty) days after the Effective Date of
this MOU - being 08 November 2012, during which period the
Parties will conclude the Phokathaba Agreement and due
diligence.
In the event that Phokathaba is able to continue operating
exclusively on the Material supplied by Pollux post the
Exclusivity Period, the Parties may jointly agree to extend
the Exclusivity Period and conditions.
Pollux will be responsible for delivering the Material to the
Phokathaba Concentrator.
Phokathaba will be responsible for the processing of the
Material.
Phokathaba will deliver both a filtered PGE concentrate to
Pollux as well as any recovered Chromite concentrate.
The Parties have commenced formalising a toll processing
agreement in this regard.
PURCHASE OF PGES FROM THE DILOKONG CHROME MINE TAILINGS
Jubilee is also pleased to report Pollux and CMR have executed
a treatment of tailings agreement (the “Agreement”)
formalising the previous memorandum of understanding –
announced on 13 June 2012. This gives Pollux the right to
purchase from CMR the PGE’s (platinum group elements)
contained in the tailings dump (“Dump”) of Dilokong Chromite
Mine (“Dilokong”) and its current tailings (collectively
“Material”) and to process the Material to recover the PGEs
for its own account.
THE TERMS OF THE AGREEMENT
The conditions precedent of the CMR Agreement include inter
alia:
- Pollux obtaining and/or keeping in place such
environmental approvals as may be necessary or required
in respect of the processing of the Dump and the
construction and operation of the Concentrator, if
appropriate, which environmental approvals shall include
undertaking any and all environmental impact studies,
submitting environmental management reports and/or any
other requirements of the Department of Mineral Resources
or any other governmental authority;
- Pollux negotiating, finalising and entering into an
appropriate access and ancillary rights agreement with
Dilokong to, inter alia, allow Pollux access to the mine
and the Dump;
- Pollux undertaking and completing a feasibility study in
respect of the mineral content of the Dump;
- Pollux undertaking and completing, entirely to its
satisfaction, the due diligence investigation, which must
be finalised within a period of 60 days with effect from
the Signature Date – being 16 November 2012;
- Pollux negotiating, finalising and entering into an
appropriate framework and treatment of tailings agreement
with Dilokong, on terms and conditions acceptable to
Pollux and CMR, in respect of the extraction and
processing of chrome ores from the Dump; and
- CMR and/or Dilokong obtaining to the extent necessary a
certificate of exemption in terms of the relevant
regulatory authority in respect of the area on which a
Concentrator, if appropriate, is built.
SUMMARY OF PURCHASE PRICE AND PAYMENTS
Upfront Payment
Pollux will pay to CMR an Initial Fee of ZAR10 million
(approximately £714,300) which at Pollux’s election, will be
paid either in cash or in Jubilee shares (the “Initial Fee”).
The Initial Fee is deductible from or offset against any
future revenue payments due by Pollux to CMR in terms of the
Price (as defined below), in such tranches as Pollux may
determine provided that Pollux will not be entitled to offset
the entire Initial Fee in a period less than one Year from the
date of payment of the Initial Fee.
PRICE
The price payable by Pollux to CMR for the Material removed
from the Dump will be calculated, based on the platinum price,
on the basis that CMR shall be entitled to a percentage of
revenue received by Pollux for the sale of the PGE Concentrate
recovered from the Material (the “Price”).
CONTACTS
Jubilee Platinum plc
Colin Bird/Leon Coetzer
Tel +44 (0) 20 7584 2155 / Tel +27 (0)11 465 1913
Andrew Sarosi
Tel +44 (0) 1752 221937
finnCap Ltd
Matthew Robinson/Ben Thompson– corporate finance
Joanna Weaving – corporate broking
Tel +44 (0) 20 7600 1658
Shore Capital Stockbrokers Limited (Joint Broker)
Jerry Keen/Edward Mansfield
Tel: +44 (0) 20 7 408 4090
Sasfin Capital
Leonard Eiser/Sharon Owens
Tel +27 (0) 11 809 7500
Bishopsgate Communications Ltd
Nick Rome/Anna Michniewicz/Ivana Petkova
Tel +44 (0) 20 7562 3350
21 November 2012
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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