Wrap Text
Six Month Operations Update H1 2020
Jubilee Metals Group PLC
("Jubilee" or the “Company")
Registration number (4459850)
AltX share code: JBL
AIM share code: JLP
ISIN: GB0031852162
Six Month Operations Update H1 2020
Dissemination of a Regulatory Announcement that contains inside information according to
REGULATION (EU) No 596/2014 (MAR). Not for release, publication or distribution in whole or in
part in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws
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Jubilee, the AIM and Altx traded metals processing company, is pleased to announce its unaudited
operational results for the six month period ended 30 June 2020 (“H1 2020”).
Highlights
• Jubilee delivers sixth consecutive six-monthly period of double digit growth with a 54%
increase in combined1 H1 2020 operational earnings to GBP 12.8 million (74% increase to ZAR
266.5 million) from H2 2019
• Earnings growth achieved notwithstanding the loss of the equivalent of approximately 2
months’ of operational time due to restrictions under COVID-19 regulations
• 18% increase in combined1 H1 2020 revenue to GBP 29.4 million (33% increase to ZAR 615
million) from H2 2019
• Jubilee’s cash position increased to GBP 10.8 million (ZAR 230.5 million)
• Jubilee’s increased cash position was maintained despite settling of the final payment of GBP
1.4 (ZAR 30.6 million) for the acquisition of additional PGM and chrome rights, as well as
settling historical debt of GBP 2.5 million (ZAR 53.9 million) while maintaining the
capitalisation of the Zambian Sable Refinery
• All operations have returned to 100% capacity while maintaining strict health and safety
measures
• Jubilee commenced production of both copper cathode and cobalt concentrate at its Sable
Refinery
• Jubilee secures the rights to approximately 150 million tonnes of copper containing surface
tailings targeted to be refined at the Sable Refinery
• Jubilee targets to reach 25 000 tonnes of copper per annum within the next 4 years
PGM Operations
• PGM project operational earnings up 54% to GBP 12.5 million (74% increase to ZAR 262
million) from H2 2019
• PGM project revenue up 31% to GBP 21 million (48% increase to ZAR 439 million) from H2
2019
• Jubilee’s operations being at surface enabled the Company to pro-actively implement safety
measures to align with the required COVID-19 regulations
• PGM concentrate delivered reached 19 682 ounces (7% lower than that of H2 2019 due to
COVID-19 restrictions)
• PGM results are net of 40% of the Windsor PGM results attributable to its joint venture
partner
Chrome Operations
• Chrome project earnings up 32% to GBP 0.2 million (up 49% to ZAR 4.7 million) from H2 2019
despite suppressed chrome metal prices during the period
• Chrome project revenue down 5% to GBP 8.4 million (up 7% to ZAR 176 million) from H2 2019
• Chrome concentrate produced up 3% to 191 995 tonnes for H1 2020
• Following the acquisition of PGM surface tailings, Inyoni Operations commenced with the
production of chrome in November 2019 with a total of 21 018 tonnes of concentrate
produced for H1 2020
• Jubilee commenced with the relocation of its ground breaking fine chrome facility to its much
larger Windsor and Inyoni Operations to contribute more significantly to group earnings and
overcome the delays in the potential roll-out of the solution caused by extended equipment
delivery time lines during the period as a result of COVID-19
Integrated Kabwe Operations
• Commenced production of copper cathode and cobalt concentrate
• Secured the rights to 150 million tonnes copper containing surface tailings in Zambia offering
a long term sustainable earnings profile to the Zambian business
• Continues to actively engage with third party suppliers of both copper and zinc ore as part of
the expansion of the Integrated Kabwe Project
1- Combined revenue and earnings exclude revenue and earnings attributable to joint venture partners
2- PGM - 6 Element Platinum Group Metals including platinum, palladium, rhodium, ruthenium, osmium and gold
3- All amounts in this announcement are converted at average conversion rates for the period for income statement
purposes and at the period end spot rate for balance sheet purposes
Leon Coetzer, Chief Executive Officer, commented: “I am proud to be leading such a committed
Jubilee team that has delivered yet another exceptional performance. The growth in our operational
earnings of 54% signals the sixth consecutive six-monthly period of double digit growth for the
Company.
“During the six month period we have achieved a number of key milestones to both grow our PGM and
Chrome production footprint while also replicating the success in these commodities in Zambia with
the roll-out of our Copper strategy.
“The Group is demonstrating clear potential to continue to grow earnings over the next reporting
period on the back of the commissioning of both of our copper and cobalt refining circuits and the
expected ramp-up of our copper production.
“I am particularly pleased with our copper transaction where we secured the rights to approximately
150 million tonnes of copper containing surface material (“Project Elephant”). This transaction forms
a key part of our copper strategy which will target the production of copper concentrates at selected
resources to then be further refined to pure metal at our Sable Refinery.
“We have targeted a second copper resource which if successfully concluded holds the potential to be
brought into operation well in advance of our Project Elephant. This would secure a sustained copper
ramp-up prior to Project Elephant being commissioned. We have set ourselves a target to achieve the
production of 25 000 tonnes of copper per annum within the next 4 years.
“Our presence in Zambia over the past year since the acquisition of the Sable Refinery re-asserted our
belief that many opportunities exist to expand our business model into all aspects of copper in the
country. Zambia contains vast quantities of copper tailings requiring Jubilee's skills to unlock these
opportunities. Jubilee is perfectly poised to play a commanding role in this area.
“The COVID-19 pandemic has brought with it a number of challenges over the last 6 months, however
the manner in which Jubilee has been able to react and find solutions is testimony to the ingenuity of
the Jubilee team and lies at the heart of 'The Jubilee Way’.”
Combined Operational and Financial update
Jubilee has maintained its strong growth trajectory in H1 2020, delivering yet another significant
increase in earnings which is up 54% from the previous period. The growth in both revenue and
earnings was delivered despite the operational interruptions and challenges posed by the current
COVID-19 pandemic.
Beyond growth in revenue and earnings Jubilee has continued to strengthen its asset base, this time
in Zambia. This aligns with the Company’s strategy to target other geographical areas and metals
including copper tailings resources in Zambia. On 18 June 2020, Jubilee announced that it had entered
into a Joint Venture agreement with the mining rights holder, Star Tanganika Limited, to process
approximately 150 million tonnes of copper containing surface tailings targeted to be upgraded at site
and refined at its Sable Refinery in Zambia. The project will target the production of copper
concentrate through a dedicated new copper concentrating facility ("Project Elephant") targeted to
be constructed over the next 24 months. Project Elephant alone holds the potential to produce
copper concentrates in excess of the total Sable Refinery capacity of 14 000 tonnes per annum of
copper cathode. It is the Company's objective to increase the capacity to in excess of 25 000 tonnes
of copper per annum over time based on feed sources and projects currently under review. Based on
current operating margins maintained at the Sable Refinery for the production of copper cathode,
combined with the performance of Jubilee's large scale piloting test programme on copper tailings,
the project holds the potential to more than double Jubilee's current earnings profile. The ramp-up
of the copper circuit was implemented to position the Company to capitalize on the positive sentiment
returning to the copper industry which is expected to reflect in metal prices.
Jubilee has identified further copper containing resource which hold the potential to be brought into
operation well in advance of Project Elephant. Such targeted projects offer Jubilee the potential to
secure a sustained increase in copper production well in advance of commencing operation at Project
Elephant.
The addition of the copper tailings in Zambia followed the significant increase in access to chrome and
PGM surface material with the acquisition of all historical and future PGM tailings and all historical
chrome rights at the Inyoni Operations, located in the Bushveld Complex, in November 2019. The
acquisition transformed the Company’s Inyoni Operations from a co-operation processing agreement
to owning 100% of the rights to PGM and chrome earnings from the current and future tailings
produced at Jubilee’s Inyoni Operations, without additional risk to the Company. Jubilee has also
acquired all rights to a further c. 1 000 000 tonnes of PGM rich material located close to the Company’s
Windsor Chrome Operations. Jubilee was able to minimise the impact on it operations despite the
temporary shutdown of the Inyoni PGM and Windsor PGM JV Operations, which have now returned
to full capacity, delivering 19 682 ounces of PGM concentrate for H1 2020 (accounting only for 60%
of ounces delivered and attributable to Jubilee from the Windsor PGM Operation).
In March 2020 Jubilee announced the temporary shutdown of its South African operations in line with
the rules and regulations enforced by the South African authorities as a result of the COVID-19
pandemic. Jubilee took measures to minimise the negative financial effects and where possible
cushion the effect on employees and in April 2020 Jubilee announced that all of its projects had
recommenced operations excluding the Dilokong Chrome Mine (“DCM”). In May 2020, following a
review to further optimise earnings, it was concluded that the leading fine chrome facility which was
situated at DCM for the development and testing of the Company’s renown fine chrome facility, would
be best placed at the Company's much larger Inyoni or Windsor chrome Operations to maximise
earnings from this unique facility. The relocation process is expected to be completed by the end of
August 2020 and is expected to significantly enhance Jubilee’s chrome operational outputs.
The table below presents the combined operational revenue and earnings performance for H1 2020:
Jubilee Jubilee
Project
Project revenue attributable attributable
COMBINED revenue1 1 1
(ZAR'000) earnings earnings
(GBP'000)
(GBP'000) (ZAR'000)
H1 2019 14.361 263.873 5.6412 103.713
H2 2019 24.966 461.669 8.299 153.501
H1 2020 29.441 615.028 12.760 266.554
1- Combined revenue and earnings excludes revenue and earnings attributable to joint venture partners
Chrome Operations update – South Africa
Jubilee’s chrome operations include DCM Chrome, Windsor Chrome and Inyoni Chrome following the
acquisition by Inyoni of the chrome rights in November 2019. Chrome earnings increased by 32% to
GBP0.2 million (up 49% to ZAR 4.7 million) from H2 2019 despite chrome revenues reducing by 5% to
GBP 8.5 million (up 7% to ZAR 176 million) from H2 2019. This increase was driven by efficiencies and
adjusting third party ore supply agreements to better reflect the fluctuations in the chrome price.
The table below presents the combined operational revenue and earnings performance for chrome
for H1 2020:
Chromite Jubilee Jubilee
Project Project
concentrate attributable attributable
CHROME revenue revenue
produced earnings earnings
(GBP'000) (ZAR'000)
Tonnes (GBP’000) (ZAR’000)
H1 2019 164 936 6.599 121.188 1.576 28.907
H2 2019 186 249 8.881 164.138 169 3.134
H1 2020 191 995 8.422 175.938 223 4.660
Chrome prices remain volatile due to the disruptions in the supply chain over the sixth month period,
and these price fluctuations are expected to continue over the next six months as the world emerges
from the pandemic and supply and demand fundamentals are better matched.
Platinum Group Metals (“PGM”) Operations update – South Africa
Jubilee’s PGM operations consist of the Inyoni and Windsor PGM operations with a further PGM
project awaiting approvals at DCM. PGM project revenue is up 31% to GBP 21 million (48% to ZAR 439
million) from H2 2019. PGM project operational earnings is up 54% to GBP 12.5 million (74% to ZAR
262 million) from H2 2019. The impact on PGM production due to the operating restrictions enforced
under the COVID-19 regulations resulted in a slight decrease in PGM ounces delivered. Operations
have since returned to full capacities.
The table below presents the combined operational revenue and earnings performance for PGMs for
H1 2020:
Jubilee Jubilee Unit
Tailings PGM Project Project
attributable attributable cost /
PGM processed ounces revenue revenue
earnings earnings PGM oz
tonnes delivered (GBP'000) (ZAR'000)
(GBP'000) (ZAR'000) (USD)
H1 2019 237 035 11 559 7.762 142.686 4.065 74.806 412
H2 2019 553 672 21 082 16.085 297.530 8.129 150.368 544
H1 2020 481 353 19 682 21.019 439.091 12.537 261.894 537
The PGM basket price remained buoyant with demand continuing to outweigh supply and the PGM
basket price is expected to remain well supported.
Integrated Kabwe Operations, Zambia – Copper, zinc, lead and vanadium update
The Company’s Kabwe Project combined with its multi-metal Sable Refinery establishes Jubilee’s fully
integrated multi-metal recovery and refining operational footprint in Zambia. The Sable Refinery,
which acts as a central processing facility for third party material in the region, gives access to a
current resource comprising of an estimated 150 million tonnes of copper tailings and 6.4 million
tonnes of surface waste assets containing zinc, lead and vanadium pentoxide.
The acquisition of the Kabwe Project served as an entry point for Jubilee into Zambia presenting the
Company with a very well-placed platform from which to pursue the various base metal opportunities
presented by the country and to begin actively engaging with third party suppliers to develop strategic
partnerships as part of the expansion of the Integrated Kabwe Operations.
Jubilee entered into a joint venture agreement to secure rights to process approximately 150 million
tonnes of copper containing tailings, with the mining rights holder, Star Tanganika Limited, targeted
to be upgraded at site and refined at its Sable Refinery in Zambia. Based on current operating margins
maintained at the Sable Refinery for the production of copper cathode, combined with the
performance of Jubilee's large scale piloting test programme on copper tailings, the project holds the
potential to more than double Jubilee's current earnings profile.
The Board and management see great opportunity to expand operations in the country, particularly
in copper where there is a significant supply of on-surface waste material. Jubilee's implementation
of its copper strategy is centred on in-house proven ability to pre-concentrate and extract value from
tailings resources. The systematic implementation of the strategy includes; the commissioning of the
copper refinery circuit; processing tails owned by Sable Refinery to produce copper cathode; entering
into third party ore supply offtake agreements and securing exclusive access to vast surface copper
tailings resources.
During the period the cobalt refinery circuit was brought on-line to process historical copper tailings
as well as third party run-of-mine material. The first high grade copper cathode was produced in
December 2019 with the completion of the solvent extraction circuit. The Sable Refinery has been
able to maintain a production rate of approximately 100 tonnes of copper cathode per month based
on own tails alone with an additional production of 100 tonnes of copper cathode per month being
ramped up from third party run-of-mine material. The ramp-up production target from third party
run-of-mine material remains at 400 tonnes per month of copper cathode. This ramp up was
temporarily delayed by restrictions imposed on the supply of cross border services but is expected to
be reached during the next quarter.
During the period Jubilee placed the zinc refinery construction on hold due to the restrictions on the
supply of cross border services and uncertainty in market fundamentals. Jubilee will continue to
review its decision and provide further updates to shareholders if the situation changes.
United Kingdom
13 July 2020
For further information visit www.jubileemetalsgroup.com or contact:
Jubilee Metals Group PLC
Colin Bird/Leon Coetzer
Tel +44 (0) 20 7584 2155 / Tel +27 (0) 11 465 1913
Nominated Adviser - SPARK Advisory Partners Limited
Andrew Emmott/James Keeshan
Tel: +44 (0) 20 3368 3555
Broker - Shard Capital Partners LLP
Damon Heath/Erik Woolgar
Tel +44 (0) 20 7186 9900
Joint Broker – WHIreland
Harry Ansell/Katy Mitchell
Tel: +44 (0) 20 7220 1670/+44 (0) 113 394 6618
JSE Sponsor - Sasfin Capital (a member of the Sasfin group)
Sharon Owens
Tel +27 (0) 11 809 7500
PR & IR Adviser - St Brides Partners Limited
Catherine Leftley/Beth Melluish
Tel +44 (0) 20 7236 1177
United Kingdom
13 July 2020
Date: 13-07-2020 08:00:00
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