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Jubilee - operations Escom update
Jubilee Platinum Plc
AIM: JLP JSE: JBL
Registration number: 4459850
ISIN GB0031852162
("Jubilee" or the “Company")
UPDATE ON SALE OF ENERGY AND ADDENDUM TO INCREASE POWER SALES
Jubilee, the AIM and JSE quoted mine-to-metal specialist, is
pleased to announce that its South African subsidiary Power
Alt (Pty) Ltd (“Power Alt”) achieved its targeted sales of
5.1MW of generated power into the South African national
electricity grid under the Power Purchase Agreement (“PPA”)
announced on 08 August 2012.
In addition, the PPA’s contracted power value (“CPV”) has
been increased to ZAR50.1 million (approximately GBP4 million)
per year and an option has been granted to Power Alt to
increase the sale of generated power to 10 MW, which has the
potential to increase the CPV to ZAR 98 million (approximately
GBP7 million) per year.
Highlights
Power Alt achieved its targeted sales of 5.1MW of electricity
The PPA’s has been increased to ZAR 50.1 million per year
(approximately GBP4 million) from ZAR12.2 million (GBP870,000)
for the initial trial period
An option has been offered under the PPA Contracted Power
Capacity (“CPC”) to increase the sale of power to 10MW from
5.1 MW, which equates to an increase in the projected CPV to
more than ZAR98 million per year (approximately GBP7 million)
Funding of £1.3 million has been secured, via a SEDA Advance
pursuant to the SEDA Agreement announced on 15 March 2011.
Under the SEDA Advance, 15 757 576 shares are being issued at
a subscription price of £0.0825.
The SEDA advance will be used to both expedite the expansion
of the Power Alt electrical grid to ensure the time-line as
specified in an Addendum to the PPA (see below) is met for
the delivery of 10MW of power, as well as providing funding
towards bringing Platinum Australia’s Phokothaba processing
plant to operational readiness for the toll treatment of
Jubilee’s acquired Dilokong Chrome Mine tailings.
Leon Coetzer, Chief Executive Officer of Jubilee, said: "The
increased value of the PPA and the Addendum continue to build
on the Company’s earnings capability. The agreement will at
full value ensure that Jubilee is a net seller of power based
on the total power allocation of 16MW at the Middelburg
operation. The agreement acts as a profitable offset to the
continually increasing power costs in South Africa, which is a
major cost component to the Company’s smelting operations.
The funding that has been secured ensures Jubilee can capture
the full value offered through the Addendum to the PPA while
simultaneously expediting the project to recover platinum from
the Dilokong Chrome mine tailings expected to commence
processing within the first half of 2013“.
An addendum to the PPA (“Addendum”) has extended the expiry
term of the PPA by twelve months thereby increasing the PPA
contract value to ZAR50.1 million (approximately GBP4 million)
per year. The Addendum to PPA includes the further option to
increase the sale of generated power to 10 MW. To achieve an
increase to 10 MW capacity, Power Alt would have to invest a
further ZAR7.7 million (approximately GBP 550,000) on
associated cabling and electrical switchgear to upgrade the
connection to the national electricity grid.
The increase in power sales under the Addendum to 10MW would
ensure that Jubilee is a net seller of electricity compared to
the electricity utilised for smelting. Jubilee has a total
allocation of power of 16MW. The Addendum and its extension to
the expiry term is subject inter alia to Power Alt securing
the issuance and grant of all applicable regulatory consents
and electricity generation licences in this regard and being
able to deliver the 10MW power before April 2013.
Jubilee acquired a 51% position in Power Alt in 2011 to both
secure electrical power for its smelting operations as well as
target the sale of privately generated power in South Africa.
The supply of electrical power in South Africa is experiencing
severe constraints and is expected to remain so for a
prolonged period. The revenue generated by the sale of
electricity at Power Alt would act as an effective offset to
the cost of electricity used by Jubilee’s smelting operations.
Jubilee is currently increasing its interest in Power Alt from
51% to 70% having made the first of three payments (see
announcement dated 15 October 2012). As such the Company’s
current interest in Power Alt is 58.6%.
Under the toll processing agreement with Phokothaba, announced
9 October 2012, Jubilee has the exclusive right to process a
targeted 40,000 to 50,000 tonnes of platinum-bearing tailings
per month from the Dilokong Chrome mine to produce an
estimated 1,600 oz 4E (platinum, palladium, rhodium and gold)
in concentrate per month for an exclusive period of 8 months,
with an option to extend the period on a non exclusive basis.
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 7220 0500
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
10 January 2013
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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