Jubilee Metals Group PLC (LON:JLP; Altx: JBL), a leader in diversified metals processing, with operations in Africa, has today published its condensed unaudited Half-Yearly Financial Report for the six-month period ended 31 December 2022.
Overview
Financials
§ Group Revenue of £63.1 m (H1 FY2022: £63.3 m)
o Revenue contribution from combined PGM and chrome sales of £58 m and copper sales of £5.1 m
o PGM basket price US$1 453/oz down 11%, partially offset by PGM operational cost management and production output
o Realised copper price US$ 6 893/t down 28% on H1 FY2022 with strong market recovery post period
§ EBITDA of £10.3 m (H1 FY2022: £13.7 m)
§ Adjusted EBITDA of £11.8 m (H1 FY2022: £14.9 m)
§ Operating expenses of £9.7 m (H1 FY2022: £10.9 m)
§ Strong net cash flows from operating activities of £16.9 m (H1 FY2022: £2.3 m)
§ Continued investment of £24.1 m (US$28.4 m) in copper and cobalt expansions
§ Closing cash position of £11.7 m (30 June 2022: £16 m)
Operations
§ Lost time injury frequency rate (LTIFR) of 1.0 in South Africa; LTIFR of 2.9 in Zambia
o Regrettable safety incident, related to an engineering service provider that sadly resulted in a fatality
o Decisive action taken to take a more direct safety management role of service providers
§ Strong operational performance from the South African PGM and chrome operations despite initial impact of power outages
§ PGM operations recorded 18 208oz all from own operations (H1 FY2022: 20 316oz)
o PGM oz up 20% from own operations on the back of Inyoni expansion (H1 FY2022: 15 152oz)
o Initial impact of power outages addressed by increased stock holding and installation of back-up power units at chrome operation in November 2022
§ Chrome production up 2.3% to 634 111 tonnes on track to exceed full year guidance of 1.2 m tonnes despite initial impact of power disruptions
§ Costs remain tightly controlled
o Net cost per PGM oz net of chrome credits of US$608
o Net cost per copper tonne of US$5 232
§ Copper production of 1 149 tonnes below expectation as a consequence of the delayed ramp-up of Roan Concentrator, mainly due to power and water disruptions in Zambia, now resolved (H1 FY2022: 1 314 tonnes)
o Expanded power infrastructure implemented (Feb 2023)
o New privately owned water infrastructure implemented (Dec 2022)
o Roan Concentrator resumed ramp-up of operations (end Feb 2023)
o Successfully delivered first cobalt production through commissioning of cobalt hydroxide circuit at Sable Refinery in Zambia adding to its copper refining capability
Strategy and growth projects
§ Jubilee benefits from its ability to produce multi-commodities providing it with a buffer against market volatility
§ Eastern Limb PGM expansion progressing targeting an additional 25 000 PGM oz per annum
o Expected to commence construction during Q4 CY2023
§ Ramp-up of copper operations at Roan Concentrator in Zambia recommenced, reaching 80% of capacity at time of announcement, following successful power and water interventions
o Final phase of ramp-up to commence early April targeting 100% of capacity and full commercialisation of the Southern Copper Refining project during May 2023
§ Roll-out of copper expansion strategy in Zambia refined to align with the security of additional power and water infrastructure
o Centralised processing footprint offering significant capital savings by enlarging Roan Concentrator and reducing the number of new greenfields operations required for Northern Refinery expansion
§ Discussions well advanced to secure a further refining footprint to serve the targeted Northern Refining expansion strategy
§ Sable Refinery commenced production of cobalt hydroxide achieving export grade with the ability to further expand operations
Full year Outlook FY2023
§ PGM production of 38 000oz unchanged with potential of upwards revision depending on South Africa’s power supply outlook
§ Chrome operations expected to exceed guidance of 1.2 m tonnes of chrome concentrate with support of stronger chrome prices seen during current period
§ Copper guidance adjusted to 3 000 tonnes, revised to align with the delayed ramp-up of Roan Concentrator and commercialisation of the Southern Copper Refining project
o Post commercialisation, expected in May 2023, the Southern Copper Refining project, projected to maintain 550 tonnes of copper per month from Roan alone and 130 tonnes from third party supplies
o Copper prices remain well supported by constrained supply against a strong demand for the metal. Copper price up by 13.6% during January 2023 to date compared with the reporting period
§ The flexibility of Sable Refinery offers Jubilee the ability to pivot between copper and cobalt production to rapidly respond to changing market fundamentals. This flexibility is used at all times to maximise copper equivalent production units.
o Cobalt prices have come off sharply during the current period therefore Sable is able to pivot towards increased copper production
Statement from Leon Coetzer, Jubilee Metals Group CEO:
“Our South African operations delivered a strong performance, with a 20% increase in PGM oz versus H1 FY2022 from own operations while our chrome operations exceeded guidance, despite the impact of initial power interruptions. Costs remained tightly under control, with PGM unit cost remaining close to US$600 per ounce. This positions our PGM operations at the bottom quartile of the industry’s cost curve which is of key importance during current volatile markets.
“Our Roan copper concentrator is back on track, with the resumption of the ramp-up of the operations reaching 80% of full capacity by the time of this announcement, after an extended period of water and power outages that have been addressed through our various interventions during February this year.
“Jubilee has shown its resilience, acting speedily to implement solutions that address the infrastructure challenges faced at our operations during the period. The actions taken in South Africa included the implementation of back-up power units at our Windsor operations, which will be expanded over the coming period, while increasing the PGM stock held at our Inyoni operations to buffer against any prolonged power outages at our chrome operations. In Zambia, we expanded our scope and implemented a dedicated, privately owned water infrastructure, to ensure water supply to our Roan operations, while expanding the power infrastructure and entering into a new power arrangement, that significantly enhances the security of supply to our operations. Together, these measures should mitigate against the impact of future power or infrastructure related issues on our operations.
“Our Integrated Southern Copper and Cobalt Refining project has confirmed Jubilee’s capability to produce both copper and cobalt from perceived waste and discard materials. It forms the foundation for our teams to drive forward with confidence the implementation of the refined Northern Copper and Cobalt Refining project as we seek to reach in excess of 35 000 tonnes of copper per annum.
“Jubilee’s exposure to a multi-commodity operational footprint, offers great flexibility and is of key strategic value, especially in current volatile metal markets. Chrome and Copper prices have remained resilient, and we expect this to translate into an increased contribution to earnings and revenues. Green shoots in cobalt demand started emerging post the period driven by encouraging interest from China’s construction sector, which would support a recovery in cobalt demand.”
