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Third Quarter operations - correction
Jubilee Platinum PLC
Registration number (4459850)
AltX share code: JBL
AIM share code: JLP
ISIN: GB0031852162
("Jubilee" or the "Company”)
Correction:
The following amendments have been made to the ‘Third Quarter 2014 operations and financial
update’ announcement released earlier today.
All South African Rand (ZAR) values and % movements between quarters as quoted are
correct. The unaudited net profit reported in Pound Sterling in brackets within the text of the
announcement was incorrectly stated as GBP0.73 million and GBP0.7 instead of GBP0.073
million and GBP0.07 million for Q3 and Q2 respectively and the gross profit in Q3 was GBP0.47
million as opposed to the reported figure in brackets of GBP0.47. Furthermore, the unaudited
net profit in Pounds Sterling in the summarised table of results for Q2 and Q3 was reflected in
the incorrect column.
All other details remain unchanged. The full amended text is shown below.
Third quarter 2014 operations and financial update
Jubilee, the AIM quoted and AltX quoted Mine?to?Metals company, is pleased to announce an
operations and financial update for its Middelburg smelter and power operations ("Middelburg
Operations") for the third quarter of 2014 (“Q3”). The Company is also updating shareholders
regarding the sale of the Quartzhill property, owned by its subsidiary - Tjate Platinum
Corporation Proprietary Limited ("Tjate").
Highlights
a. Unaudited revenue for the Middelburg Operations up 21.16% Q3 on Q2
b. Unaudited gross profit for the Middelburg Operations up 15.36% Q3 on Q2 to 38.72%
sustaining the Middelburg Operations’ targeted gross margin of 38%
c. Unaudited net profit for the Middelburg Operations for Q3 was up 4.6% to ZAR 1.31
million (GPB0.073million) from ZAR1.25 million in Q2 (GBP0.070 million) despite the
labour strike action during the month of July and production ramp-up post the national
labour strike in the metal industry by NUMSA in August
d. Record production (840 tons of metal) and revenues achieved for September reaching
design capacity post the labour strike
e. Processing of first batch of platinum containing material scheduled to commence in Q4
f. Funding secured towards upgrading the power line infrastructure connecting the
Company's power plant to the national grid, in order to increase electricity power sales to
the South African National Energy Provider and the local municipality
g. Tjate submitted its final specialist reports in regard to its Environmental Impact
Assessment ("EIA") and the Environmental Management Programme ("EMP") to the
Department of Mineral Resources (“DMR”) thus meeting the final hurdle in its application
for a Mining Right
Leon Coetzer, CEO of Jubilee, says:
"The Company illustrated the robustness of its business model during Q3 as it was able to
maintain the continued growth in earnings from the Middelburg Operations despite the
challenges faced due to a nationwide labour strike by the National Union of Metal Workers of
South Africa (“NUMSA”) during the month of July. The impact of the strike was partly offset by
the increased sales of electricity to the South African National Energy Provider by the
Company’s private power plant during this time but, revenues and earnings were negatively
impacted for both July and August months due to the production interruptions. The Company
was able to return to normal operations during the month of September.
“We were especially encouraged by the record production achieved during September
delivering 840 tons of metal for the month resulting in record revenue and earnings for the
Middelburg Operation.
“The Company continues to make significant progress in all of its current and projected
activities. The project for the surface processing of platinum containing material from the ASA
Metals surface material (estimated to be 800 000 tons) is progressing well as we drive towards
bringing the project into operation. Jubilee is currently pursuing a number of further surface
platinum opportunities to grow its surface asset portfolio.
“All specialist studies and reports related to the Tjate mining right application have now been
submitted to the DMR. Tjate continues working closely together with Anglo Platinum to
expedite the conclusion of the sale of Quartzhill, linked to the grant of the mining right to Tjate.
"The Company is currently meeting all the challenges presented by the current operating
environment and remains fully confident in development of its business model and the
opportunities it presents."
Middelburg Operations
The Middelburg Operations managed to sustain earnings despite the strike during July and the
ramp following the strike in August. Operations in September returned to targeted production
levels delivering record metal production of 840 tons.
Unaudited revenue increased by 21.16 % to ZAR21.62 million (GBP1.2million) from ZAR17.8
million in Q2 (GBP 1 million). (Please refer to tables below)
Unaudited gross profit increased by 15.36% to ZAR8.4 million (GBP0.47 million) from ZAR 7.3
million in Q2 (GBP 0.4 million). The Middelburg Operations achieved its targeted gross profit
margin of 38.00% by reporting a gross profit of 38.72% for Q3. The growth in gross profit
margins were negatively impacted by a disproportionate increase in the cost of sales for Q3
mainly caused by labour strike action and the operational strategy deployed to counter this
impact.
Unaudited net profit increased by 4.6% to ZAR 1.31 million (GBP 0.073 million) in Q3 from ZAR
1.25 million in Q2 (GBP0.07million). The net profit margin was below the target of 12% due to
costs incurred as a result of the labour strike.
The Company concluded smelter-recipe optimisation test work on platinum-containing waste
material secured for possible smelting at its Middelburg Operations. A trial smelt of a bulk 30-
ton lot is scheduled to take place in the short term to define more precisely the material’s PGM
content and recovery. The data from the trial will be used to assess the degree of variability of
the material in order to optimise the process controls and if warranted to move forward to
commence processing of the estimated 85 000 tons of platinum containing material at its
Middelburg Operations.
The targeted processing of this platinum-containing material is in line with the Company's stated
strategy to migrate the Middelburg Operations onto the processing of higher value material on
the back of the successful renewal program.
The Company secured funding through an investor equity placing, the proceeds of which will be
used towards upgrading the power line and infrastructure (“Infrastructure”) connecting the
Company's power plant, Power Alt, to the national grid. This upgrade will enable increased
electricity sales to the South African National Energy Provider and the local municipality. The
installation of the electrical hardware is expected to be executed over a period of approximately
8 weeks following approval from the local municipality. The increase in capacity equates to a
potential monthly increase in power exports of approximately 3.6 million kWhs equating to an
increase in revenue from power exports to the South African National Power Grid of
approximately GBP 195 000 (ZAR 3 500 000) per month at current contracted unit rates.
Middelburg Operations unaudited financial results
Below is a table of unaudited external revenues (excluding any intercompany revenues), gross
profits and net profits of the Middelburg Operations achieved for Q3 compared to Q2. These
figures represent the operational performance of the Middelburg Operations only and not the
overall consolidated financial performance of the Group for the quarter ended 30 September
2014.
%
Q3 Q3 Q2 Q2 change
2014 2014 2014 2014 ZAR
ZAR GBP* ZAR GBP*
Total revenue 21 615 804 1 204 022 17 839 980 993 705 21.16%
Total cost of sales (13 246 128) (737 823) (10 584 902) (589 590) 25.14%
Gross Profit 8 369 676 466 199 7 255 078 404 115 15.36%
Gross Profit % 38.72% 40.67%
Net profit 1 304 617 72 669 1 247 138 69 467 4.60%
Net profit % 6.04% 6.99%
* Average conversion rate is used for the relevant quarter
Below is a table of unaudited external combined revenues (excluding any intercompany
revenues) for the Middelburg Operations, cost of sales and gross profits achieved for Q3 2014
compared to Q3 2013. These figures represent the operational performance of the Middelburg
Operations only and should not be taken as an indication of the overall consolidated financial
performance of the Group for the quarter ended 30 September 2014.
%
Q3 Q3 Q3 Q3 change
2014 2014 2013 2013 ZAR
ZAR GBP* ZAR GBP*
Total revenue 21 615 804 1 204 022 16 727 333 1 080 586 29.22%
Total cost of sales (13 246 128) (737 823) (9 599 305) (620 115) 37.99%
Gross Profit 8 369 676 466 199 7 128 028 460 471 17.42%
Gross Profit % 38.72% 42.61%
* Average conversion rate is used for the relevant quarter
Mining & Exploration and ConRoast process
It was announced on 21 July 2014, that a current platinum producer had appointed an
engineering and project management firm to conclude a definitive feasibility study for the
implementation of a 10MW furnace at their property. This study is now expected to be
concluded during Q4.
The Company and Tjate, progressed to submitting the final specialist reports for the EIA and the
EMP to the DMR in respect of the Tjate Platinum Mine Project. The Company and Tjate,
together with the Tjate Community and Anglo Platinum have had positive on-going
consultations on the immediate social and labour benefits that would be expected to flow to the
community on conclusion of the sale of Quartzhill.
Shareholders should note that the financial information contained in this announcement has not
been reviewed or audited by the Company's auditors.
Contacts
Jubilee Platinum plc
Colin Bird
Tel +44 (0) 20 7584 2155
Leon Coetzer
Tel +27 (0)11 465 1913
Andrew Sarosi
Tel +44 (0) 1752 221937
JSE Sponsor
Sasfin Capital, a division of Sasfin Bank
Limited Sharon Owens
Tel +27 (0) 11 809 7500
Nomad and Broker
Daniel Stewart and Company PLC
Emma Earl / David Coffman – Corporate Finance
Colin Rowbury – Corporate Broking
Tel: +44 (0) 207 776 6550
17 October 2014
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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