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JUBILEE METALS GROUP PLC - Six monthly operations update

Release Date: 05/08/2019 10:00
Code(s): JBL     PDF:  
 
Wrap Text
Six monthly operations update

Jubilee Metals Group PLC
Registration number (4459850)
AltX share code: JBL
AIM share code: JLP
ISIN: GB0031852162

Dissemination of a Regulatory Announcement that contains inside information according to
                          REGULATION (EU) No 596/2014 (MAR)


                                             Jubilee Metals Group PLC
                                          Six Monthly Operations Update

Jubilee Metals Group ("Jubilee" or the “Company"), the AIM and AltX traded metals
processing company, is pleased to announce its operational results for the six month period
ended 30 June 2019 (“H1 2019”), in line with the Board’s decision, as previously reported, to
present a consolidated operational and financial review on a six monthly period while
continuing with a more frequent project updates.


Operational & Projects Highlights

     -    75% increase in combined H1 2019 revenue to GBP 14.36 million (ZAR 263.87 million)
          from H2 2018
     -    47% increase in combined H1 2019 operational earnings to GBP 5.64 million (ZAR
          103.71 million) from H2 2018
     -    Production of chrome concentrate increased significantly to reach 164,936 tonnes for
          H1 2019 with both the DCM fine chrome and the Windsor chrome (previously referred
          to as PlatCro) operations brought on-line
     -    Production of PGM* ounces reached 11,559 ounces for H1 2019 with Q2 2019
          delivering 6,473 ounces
     -    The JV PGM recovery plant for the Windsor PGM project commenced commissioning
          in June 2019, with the grinding circuit which is critical for achieving high recoveries of
          PGMs being brought into operation during July 2019
     -    Windsor PGM project has delivered 212,616 tonnes of PGM rich material, to the JV
          PGM recovery plant for further refining, during H1 2019
     -    Production of saleable PGM concentrates from the Windsor PGM project expected to
          commence during August 2019
     -    Acquisition of the Sable Zinc Kabwe Refinery for the processing of the Kabwe material
          has become effective with all contractual conditions precedent met
     -    Commenced the accelerated implementation of the upgrade zinc, vanadium and lead
          circuit
     -    Targeting to bring the copper refining line at the Sable Zinc Kabwe Refinery into
          operation during H2 2019

* 6 Element Platinum Group Metals including platinum, palladium, rhodium, ruthenium, osmium and gold

Leon Coetzer, Chief Executive Officer, says: “I am delighted to present Jubilee’s Six Monthly
Operations Update which showcases the exceptional progress we continue to make across
our portfolio of metals processing projects – delivering against our targeted performance and
bringing new operations on-line.

“Such a marked increase in combined revenue – 75% against H2 2018 – reflects our sustained
focus on increasing and diversifying our earnings base and maintaining strong margins. This
has been achieved through a considerable uplift in production figures across our portfolio,
both in chrome and PGMs. Notably our chrome performance has seen significant growth
which is attributable to our ground-breaking DCM fine chrome operation and Windsor chrome
operation being brought online during the period. Replicating this success, we expect to see a
step-up in PGM production following the Windsor PGM project being brought into operation
during July 2019.

“With the acquisition of Sable Zinc Kabwe Refinery for the processing of the Kabwe material
fully completed, our technical and operational teams are focussed on bringing the project on-
line against accelerated timelines. This means we will soon be adding zinc, vanadium, lead
and copper to our commodity basket, an important element of our on-going development
strategy to diversify our earnings through additional jurisdictions and increased metal
exposure.”

Combined chrome and PGM operational financial update

The results for H1 2019 confirm the Jubilee team’s ability to successfully deliver against
targeted performance and to bring new operations on-line. The successful acquisition of the
Sable Zinc Refinery in Zambia enhances the Company’s future operational earnings capability
and expands the Company’s operations to other geographical areas and metals.

The table below presents the combined operational revenue and earnings performance for
H1 2019:

                           Project revenue         Project revenue        Jubilee attributable        Jubilee attributable
 COMBINED
                              (GBP'000)              (ZAR'000)1           earnings (GBP'000)2         earnings (ZAR'000)


 H2 2018                        8.219                  151.256                    3.825                      70.695

 H1 2019                        14.361                 263.873                    5.641                     103.713

1 = Average monthly conversion rates used
2= Includes stock adjustments at year end as well as backdated employee costs for FY2019 in an amount of GBP 0.19 million
(ZAR 3.51 million)

Combined project revenue for H1 2019 increased by 75% to GBP 14.36 million (ZAR 263.87
million) compared to H2 2018. Combined operational earnings for H1 2019 increased by
47% to GBP 5.64 million (ZAR 103.71 million) compared to H2 2018.
Chrome update

The Group’s performance on chrome saw significant growth during H1 2019 compared to H2
2018 which is attributable to its DCM fine chrome operation and its Windsor chrome
operation that were brought on-line.

The table below presents the operational revenue and earnings performance for chrome for
H1 2019:
                      Chromite                                                                        Jubilee           Jubilee
                                         Project        Project       Project         Project
                     concentrate                                                                   attributable      attributable
 CHROME                                 revenue        revenue       earnings2       earnings
                      produced                                                                       earnings          earnings
                                       (GBP'000)      (ZAR'000)1     (GBP’000)      (ZAR’000)
                       Tonnes                                                                       (GBP’000)         (ZAR’000)

 H2 2018                17.011           1.126         20.664          (535)         (9.812)           (267)            (4.906)

 H1 2019               164.936           6.599         121.188         1.219         22.354            1.576            28.907

1= Average monthly conversion rates used
2 = Project earnings include project expenditure on plant and equipment as well as negative stock value adjustments for FY2019
applying metal prices as at the end of FY2019. It also includes all incurred operational costs and management services costs

The Windsor chrome operation (previously referred to as the PlatCro chrome operation) has
already contributed positively to chrome earnings ahead of projections as the Company
continues to drive efficiencies and enhance performance. Tonnes produced reached 164,936
for H1 2019 delivered with 15,663 tonnes contributed by the DCM fine chrome recovery
plant. Revenue from chrome for H1 2019 increased almost five fold to GBP 6.60 million (ZAR
121.19 million) compared to H2 2018. Earnings attributable to Jubilee increased almost six
fold to GBP 1.58 million (ZAR 28.91 million) compared to H2 2018.

The DCM fine chrome recovery plant produced its first on-spec chrome during the period
under review. The fine chrome operation was ramped up during the period to reach full
design capacity in June 2019 producing 5,872 tonnes for the month alone. The June
performance has already been exceeded in July 2019 with c. 6,298 tonnes produced. The
contribution to earnings from the fine chrome operation is expected to start reflecting the
successful ramp-up in the H2 2019 period.

This achievement confirms Jubilee’s ability to recover fine chrome at saleable concentrate
grades. Throughput is expected to be sustained at similar levels during H2 2019. The expected
continued increased production rates from the fine chrome operation will further contribute
to the earnings margin. The Windsor operation is performing well, contributing the majority
of the chrome production during the period under review.

Platinum Group Metals update

The Company’s PGM performance remains strong overcoming the delayed operational start
due to power outages during the early part of the period. Q2 2019 delivered exceptional
performance delivering 6,473 PGM ounces. We expect a significant increase in PGM
production on the back of the Company’s second PGM project, Windsor PGM, coming into
operation which effectively doubles the Company’s PGM production capacity.

The table below presents the operational revenue and earnings performance for PGMs for
H1 2019:
                                                                                                         Jubilee          Jubilee         Unit
                Tailings        PGM           Project         Project   Project           Project
                                                                                                      attributable     attributable      cost /
 PGMs          processed       ounces        revenue1        revenue earnings3           earnings
                                                                                                        earnings         earnings       PGM oz
                tonnes        delivered     (GBP'000)       (ZAR'000)2 (GBP'000)        (ZAR'000)
                                                                                                       (GBP'000)        (ZAR'000)        (USD)

 H2 2018        267.183        12.288          7.093        130.592         4.093         75.601          4.093           75.601             319

 H1 2019         237.035        11.559         7.762        142.686         4.065         74.806          4.065           74.806             412

1= Revenue from the current project phase – 100% attributable to Jubilee. Revenue is projected based on latest average PGM market prices
and USD exchange rates and results are only final once final Quotational Period has passed
2= Average monthly conversion rates used
3= Project Earnings include all incurred operational costs including management services and mineral royalties. It also includes backdated
employee costs for FY2019 in an amount of GBP 0.60 million (ZAR 1.10 million)

Revenue from PGMs for H1 2019 increased by 9.44% to GBP 7.76 million (ZAR 142.69 million)
compared to H2 2018. Project earnings were GBP 4.07 million (ZAR 74.81 million) compared
to GBP 4.09 million (ZAR 75.60) in H2 2018. Project earnings for H1 2019 include a once off
extraordinary expense of GBP 0.13 million (ZAR 2.40 million) for the upgrade of the secondary
grinding circuit. Jubilee maintained the PGM operation’s low cost base producing at USD412
per PGM ounce sold.

The Windsor PGM project is expected to commence with the production of platinum and
palladium rich concentrates during H2 2019, holding the potential to double Jubilee’s current
PGM ounce production over the life of the project. A total of 212,616 tonnes of PGM rich
material have been delivered to the JV PGM recovery plant which is expected to commence
with the production of saleable PGM concentrates during August 2019. The PGM
concentrator has completed the commissioning of both the grinding and primary recovery
circuits. The second recovery circuit is expected to be brought on-line during the month of
August which will further enhance the PGM extraction efficiencies. The Windsor PGM
operation continues to target production at a processing rate of 60,000 tonnes per month.

Zinc, lead and vanadium update – Zambia

The Agreement for the acquisition of the Sable Zinc Kabwe Refinery for the processing of the
Kabwe material has become effective with all contractual conditions precedent met with final
competition commissioning approval received for the transaction from the Zambian
Competition and Consumer Protection Commission.

The final administrative process for the Sable Zinc Kabwe refinery handover and share
transfer with Glencore is near completion with only the final share transfer to be completed
and registered.
Jubilee’s technical and operational teams are focussed on bringing the Kabwe project on-line
against accelerated timelines. Having progressed with the finalisation of the detail process
design, Jubilee’s engineers will now commence the process upgrade to integrate the Kabwe
Tailings project. The project targets to integrate the process over two phases with the first
phase targeting the production of vanadium pentoxide (V2O5) and an intermediate saleable
zinc concentrate, while phase two is targeting production of refined zinc and a lead
concentrate. The Kabwe Tailings project has the potential to significantly enhance Company
earnings on the back of three revenue producing metals.

During this period the Company will also look towards bringing the copper refining line into
operation to capitalise on the regional demand for such refining capacity.


United Kingdom

5 August 2019
                                        
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/Vassil Kirtchev
Tel: +44 (0) 203 368 3555

Broker - Shard Capital Partners LLP
Damon Heath/Erik Woolgar
Tel +44 (0) 20 7 186 9900

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/Juliet Earl
Tel +44 (0)20 7236 1177

Date: 05/08/2019 10:00:00
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