Wrap Text
Jubilee forms joint venture with BMR to recover zinc, lead and vanadium at the Kabwe Project in Zambia
Jubilee Platinum PLC
Registration number (4459850)
AltX share code: JBL
AIM share code: JLP
ISIN: GB0031852162
("Jubilee" or “Company")
Jubilee forms joint venture with BMR Group PLC (“BMR”) to recover zinc, lead and vanadium at
the Kabwe Project in Zambia
Highlights
Jubilee expands its surface processing footprint into Zambia to recover lead, zinc and vanadium from
historical surface deposits
Jubilee partners with BMR to target the recovery of lead, zinc and vanadium from an estimated 6,4
million tonnes (3,2 million JORC compliant) of surface assets at Kabwe located in Zambia
All historical mine activities have been suspended offering the project unencumbered access to
existing infrastructure
The partnership pools resources of both companies to bring the project to account
The joint venture formed between Jubilee and BMR will finance and execute the approved works
programme with commercial production expected of lead and zinc in 2018
Jubilee has the option to provide staged financing towards the execution of the project secured
against the shareholding of the Kabwe project as well as preferred income from the project
Leon Coetzer, Chief Executive Officer, says:
“I am delighted to announce that we have successfully secured access to this exciting surface project
that extends our reach beyond the South African bushveld complex and into other commodities.
This transaction is in line with our mission to take our brand and expertise across country borders
and commodities.
This project is meaningful in scope, diversity and potential contribution to the Company’s earnings.
The Kabwe project offers immediate unencumbered access to a large surface stock rich in lead, zinc
and vanadium created from historical mining and processing activities. The project benefits from
existing infrastructure including power, water and building infrastructure, which significantly reduces
the required project capital and shortens the implementation time line.
The Jubilee team’s expertise and ability is perfectly suited to the project and strongly complements
the existing BMR project team to extract maximum value from the metals contained in the various
surface discards and I look forward to working with the BMR team to bring this project into being.
In entering into this agreement, we are acutely aware of the significant further opportunities
presented within Zambia and will be actively exploring these opportunities.”
Transaction Overview
Jubilee has executed a binding agreement (the “Transaction”) to form a joint venture with AIM-
quoted BMR to target the recovery of lead, zinc and vanadium from historical surface mine tailings
and discards (“the Project”).
Under the Transaction, a joint venture company will be established (“Kabwe Operations”) which will
be assigned all intellectual property developed for the execution of the Project as well as the right to
fund and execute the Project on behalf of BMR.
Kabwe Operations will be appointed operator of the Project, with responsibility for commissioning,
funding, construction and operations of the Project. Kabwe Operations will sub-contract operator
responsibilities to Jubilee.
In terms of the Transaction Jubilee is offered the right to earn into Kabwe Operations through staged
debt funding (“Debt Finance”) as set out below. Jubilee’s earn-in interest in Kabwe Operations will
be through preferred shares issued in Kabwe Operations (“Preferred Shares”), which will have equal
voting rights to ordinary shares of Kabwe Operations and will have the preferred right to receive
100% of distributed profits from Kabwe Operations until the preferred Debt Finance plus a 30%
interest component is fully paid, where after the Preferred Shares will convert into ordinary shares
of Kabwe Operations.
Jubilee Key Earn-in Terms for Kabwe Operations
(a) Phase 1 – Jubilee will provide access to funding for Kabwe Operations to the value of £300,000
to secure a 15% equity interest in Kabwe Operations held as a Preferred Share. The funding will
be towards the confirmation by Jubilee of the initial design, work programme and budget for
construction of the Project (“Approved Works Programme”) to be prepared by Jubilee by 28
February 2018. At the completion of Phase 1 Jubilee will confirm its decision at its full
discretion to proceed with the Project and further farm-in of Kabwe Operations (“Approval
Notice”).
(b) Phase 2 – Jubilee will provide access to a further £1,000,000 funding towards the
implementation of the Approved Works Programme to secure a further 15% equity interest in
Kabwe Operations taking the aggregate interest of Jubilee to 30% held as a Preferred Share. As
security for the Jubilee Debt Finance, the BMR Group would grant security over the whole of its
shareholding in the Kabwe project through its subsidiary Enviro Processing Limited.
(c) Phase 3 - Jubilee will provide access to a further £1,000,000 funding towards the
implementation of the Approved Works Programme and targeting commercial production to
secure a further 10% equity interest in Kabwe Operations taking the aggregate interest of
Jubilee to 40% held as a Preferred Share.
In the event that the Joint Venture Agreement is deemed to be a fundamental change of business to
BMR, in accordance with Rule 15 of the AIM Rules for Companies, and is not approved by
shareholders of BMR at a General Meeting, Kabwe Operations (guaranteed by BMR) shall
immediately repay the £300,000 of Jubilee Debt Finance together with 100 per cent interest
thereon. Jubilee shall retain its interest in 15% of Kabwe Operations’s voting share capital and shall
have a pre-emptive right to participate in any future equity issue or joint venture relating to BMR’s
Kabwe project and the right to realise its interest in Kabwe Operations at the future equity issue
price or joint venture implied value, as appropriate.
Andrew Sarosi, Director of Jubilee, who holds a B.Sc. Metallurgy and M.Sc. Engineering, University of
Witwatersrand and is a member of the Institute of Materials, Minerals and Mining, is a
"qualified person" as defined under the AIM Rules for Companies and a competent person under the
reporting standards. The technical parts of this announcement have been prepared under Andrew's
supervision and he has approved the release of this announcement.
About Kabwe Mine
Information containing resource statements are based on the information as provided by BMR to
Jubilee which is also referenced on the BMR website at www.bmrplc.com.
Mining History
The Kabwe mine was discovered during 1902 and commenced operations in 1904, reaching full-scale
production in 1906. It officially closed down on 3 June 1994 due to its operations becoming
uneconomic at that time. The site was placed under care and maintenance by the national mining
company, The Zambian Consolidated Copper Mines ("ZCCM").
For 88 years of continuous operation until final closure in 1994, Kabwe was regarded as one of the
famous mines in Africa and held a key position of national economic importance. During its life time
the mine produced the following:
Zinc (Zn) 1,800,000 tonnes
Lead (Pb) 800,000 tonnes
Vanadium Oxide (V2O) 7,816 tonnes
Silver (Ag) 80,000kg
Cadmium (Cd) 235,000kg
Importantly, the above-ground dumps of mineral-rich tailings, slag and waste left onsite during
the mining years are still in place.
A large project conducted by the World Bank and the Nordic Development Fund commenced in 2005
for the environmental rehabilitation of the Kabwe mine area and is still ongoing.
On closure of the operations in 1994, much of the site area and plant infrastructure was sold in
discrete lots to private investors, with the overall responsibility for decommissioning and
rehabilitation of the sites retained by ZCCM. In recent years, the ownership of the Kabwe complex
has been rationalised and since 2008 has been steadily acquired by BMR which now owns all the
surface rights over the 705 hectares site.
The Kabwe Tailings Stockpiles
Enviro Processing Ltd holds the Small Scale Licence 7081-HQ-SML in respect of the Tailings Stockpiles
on and the Large Scale Licence 6990-HQ-LML (applying to the whole 703 hectares of the BMR Kabwe
site.
BMR has acquired all the stockpiles of tailings at the Kabwe mine complex. These assets are held by
Enviro Mining Ltd, which is a wholly-owned subsidiary of BMR, and its two Zambian-registered
subsidiaries, Enviro Processing Ltd and Enviro Props Ltd.
Stockpile 1 The Wash Plant Tailings Dump
The wash plant tailings dumps include process residue historically produced at Kabwe prior to its
closure through the washing of newly mined and crushed ore. These have a high combined grade of
Lead and Zinc at 17.87%.
JORC Mineral Resource estimates on Zinc (Zn) and Lead (Pb) for the Kabwe wash plant tailings are:
Mineral Dry Bulk Contained Contained
Resource Volume Density Zn Pb Dry Tonnes of Tonnes of Metal
Class (m3) (t/m3) (%) (%) Tonnage Metal – Zinc – Lead
Measured 304,771 1.92 10.66 7.21 573,458 61,147 41,345
Stockpile 2 The Leach Plant Residue
JORC Mineral Resource estimates on Zinc (Zn) and Lead (Pb) for the central section of the leach plant
tailings are:
Contained
Mineral Resource Zn Pb Tonnes of Contained Tonnes of
Classification (%) (%) Dry Tonnage Metal – Zinc Metal – Lead
Measured 3.88 8.71 2,648,920 102,690 230,810
Metallurgical Testwork on the Tailings Stockpile
Following intensive and wide ranging metallurgical investigative testwork, BMR achieved the
following extraction efficiencies;
Lead and Zinc extractions for the Wash Plant Tailings of 90% Pb and 79% Zn have been
achieved. Recoveries for the Leach Plant Residue are in the region of 80% Pb and 50% Zn.
Further testwork will focus on finalising the flow sheet, the process design and establishing the
quality of the products
Other Above Ground Dumps
In addition to the aforementioned stockpiles, further aggregate stockpiles from previous mine
operations including all surface materials at the Kabwe site, totals an approximate 6,4 million tonnes
containing an estimated 356 843 tonnes of zinc and 351 386 tonnes of lead.
This announcement contains inside information for the purposes of Article 7 of Regulation
596/2014
United Kingdom
23 October 2017
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
JSE Sponsor
Sasfin Capital (a member of the Sasfin group)
Sharon Owens
Tel +27 (0)11 809 7500
Nominated Adviser
SPARK Advisory Partners Limited
Sean Wyndham-Quin/Mark Brady
Tel: +44 (0)203 368 3555
Broker
Beaufort Securities Limited
Jon Belliss
Tel: +44 (0) 20 7382 8300
Date: 23/10/2017 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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