Jubilee Metals Group PLC (LON:JLP), a leader in metals processing with operations in Africa, has announced its unaudited operational results for the six months to 31 December 2021.
PGM Operations – South Africa
· Jubilee successfully recommissioned on-time and in-budget the significantly upgraded and fully integrated new Inyoni PGM1 processing facility in South Africa in November 2021
· The £ 17.5 million (ZAR 377 million) 2 investment program enables the new integrated facility to produce up to 44 000 PGM ounces (previously 30 000 PGM ounces) and 615 000 tonnes of additional chrome concentrate per annum (complete rebuild of old Hernic chrome plant)
· The investment in Inyoni has materially increased the Group’s production capacity of PGM ounces and, importantly, increases the proportion of the ounces produced that are fully attributable to Jubilee along with the associated earnings compared with the significant dilution of earnings caused by the Windsor PGM JV where up to 40% of earnings was attributable to the JV partner
· The new Inyoni processing facility is a state-of-the-art plant that is uniquely able to process both a wide variety of chrome and PGM containing mined ores as well as historical tailings. Previously the plant was limited to processing only a single feed source
· The investment program included the construction of a new 80 000 tonnes per month Chrome processing facility (“OBB Chrome Plant”) integrated with the new upgraded Inyoni PGM circuit, delivering a world class fully integrated chrome and PGM processing facility able to process a wide variety of chrome and PGM containing mined ores as well as historical tailings
· The new integrated facility sets a strong foundation for sustained future growth and is the culmination of Jubilee’s extensive investment into achieving class leading efficiencies
· Jubilee was able to maintain contractual obligations during the re-build of the program with 20 316 PGM ounces sold during H2 CY2021 despite scheduled production downtime during expansion at Inyoni
· Unit cost and revenues are skewed by a one-off release of PGM stock as a lower grade PGM material
· January 2022 saw monthly production levels up 66% compared with H2 CY2021. The higher production levels reflect the new Inyoni facility reaching full design capacities
· During the period, Jubilee further increased its access to both mined chrome and PGM material, as well as historical tailings, which further supports Jubilee’s targeted processing capacity expansion into the Eastern Limb. This expansion would not only offer an offset to the current transport cost incurred by this material but also offers significant growth opportunities in this PGM and chrome-rich region of South Africa
· Overall, the investment in capital expenditure over this period totalled 19.3 million (ZAR 414 million) with a further £ 17.7 million (ZAR 380 million) invested in acquisitions, leaving cash and cash equivalents at the end of the period under review standing at £ 21.7 million (ZAR 466 million), compared with £ 19.6 million (ZAR 384 million) at the year ended 30 June 2021
1. PGM – 6 Element Platinum Group Metals including platinum, palladium, rhodium, ruthenium, osmium and gold
2. Average conversion rates used for the period under review for income statement purposes and the spot rate at period end for balance sheet purposes
Chrome Operations – South Africa
· Full integration of the new 80 000 tonne per month OBB Chrome Plant with the expanded Inyoni PGM plant was achieved within budget and in record time during November 2021, delivering an integrated chrome and PGM processing facility with the unique ability to process multiple feed sources
· Production of chrome concentrate increased by 41% to 609 734 tonnes, illustrating the early contribution from the new OBB Chrome Plant which was brought on-line at the end of Q2 2021 and ramped-up during Q3 2021 before being integrated with the newly expanded Inyoni Plant during November 2021
· Chrome revenue was up 28% to £ 30 million (ZAR 611 million) from H1 CY2021
· Chrome earnings were up 15% to £ 2 million (ZAR 42 million) from H1 CY2021
· The new chrome beneficiation facility follows the completion of the Windsor 8 Chrome Plant in October 2020 and which, combined, expands Jubilee’s chrome feed capacity to 250 000 tonnes per month of both chrome run-of-mine ore and historical tailings
· The increased chrome processing capacity directly contributes to increased PGM feed supply as a tailings stream produced from the chrome processing circuit
Copper Operations – Zambia
· Sable Refinery copper production up 70% to 1 314 tonnes compared with 774 tonnes for H1 CY2021 as part of the process to ensure operational readiness to accept first copper concentrate production from Jubilee’s Project Roan
· The commissioning of Jubilee’s Project Roan copper concentrator neared completion during the period with early commissioning activities commencing. The project remains on schedule to reach full production levels during the current period targeting an annual production rate of 10 000 tonnes per annum
· Jubilee’s Sable Refinery reported revenue from the sale of copper cathode of £ 8 million (ZAR 165 million) up 57% from H1 CY2021
· Sable Refinery achieved positive earnings as part of its operational readiness activities with attributable operational earnings of £ 3.2 million (ZAR 66 million) up 70% from H2 CY2021
Leon Coetzer, Jubilee Metals Chief Executive Officer, commented:
“I wish to congratulate the Jubilee team for successfully completing our fully integrated, world-class, Inyoni chrome and PGM facility in South Africa, and for further delivering on our Southern Copper Refining Strategy in Zambia. The current reporting period is an example of Jubilee’s continued commitment to invest into our company to secure further growth and sustainability of our operations.
Despite this challenging undertaking that lays our foundation for future performance, the team delivered a stellar operational performance.
“The Jubilee team has displayed exceptional commitment and ingenuity by implementing on-time and in-budget the complex integration of the newly constructed OBB Chrome Plant, with a fully upgraded and expanded Inyoni PGM circuit. The safety of our team was paramount during this complex project with the full project delivered without a single lost time injury to any member of our team, all while continuing to operate certain sections of the facility to maintain contractual commitments for the delivery of PGM ounces.
“This new circuit at Inyoni, expands our capability to produce 44 000 PGM ounces per annum, from 30 000 ounces previously, reducing Jubilee’s reliance on the Windsor JV agreement which led to a significant dilution of earnings.
“Our chrome results already illustrate the early impact of the new OBB Chrome Plant with an increase of 41% in the production of chrome concentrate during the period under review. In addition, the recovery of chrome from the various feed supplies produces an upgraded PGM feed stream to our PGM recovery plant.
“Our Southern Copper Refining Strategy in Zambia has reached a significant milestone with the commencement of commissioning activities at our newly constructed copper concentrator situated in Ndola (Project Roan) that delivers copper concentrate to our Sable Refinery and third-party suppliers.
“The early material produced under Project Roan as part of our Phase 1 implementation is already delivering results with a 70% step-up in copper production at our Sable Refinery.
“I look forward to the Jubilee operational team’s performance over the next six months with the full impact of the Inyoni facility being felt, as well as the targeted ramp-up at Roan enabling us to take another major step in our commitment to achieve annual copper production of 25 000 tonnes.”
Combined Operational and Financial update
The Company saw the culmination of a continued period of planned substantial infrastructure investment and integration across its projects, which resulted in scheduled operational downtime at the chrome and PGM operations to facilitate the construction and integration of new processing circuits. The newly constructed and commissioned fully integrated chrome and PGM facility has set a tremendous platform for future growth for the Company. It sets the example of the type of facility that the Company plans to develop as it expands its chrome and PGM operational footprint in the Eastern Limb of the Bushveld complex in South Africa. This is a strategic development, demonstrating Jubilee’s ability to continue to grow its business by re-investing its earnings into high growth projects.
During this period, the Company maintained its contractual obligations to deliver the required PGM production despite its Inyoni PGM operation only being partially operational to achieve 20 316 PGM ounces sold for H2 CY2021 (H1 CY2021: 21 975 ounces). The PGM results are skewed and impacted by the staged decommissioning and re-commissioning of the new integrated Inyoni facility over the reporting period resulting in the one-off release of certain lower-grade PGM inventories and refilling of the operational pipeline over the period. The total PGM ounces sold included in-process stock released as part of the recommissioning of the expanded and upgraded PGM facility. The in-process stock was sold as a lower grade PGM material and prior to the completion of the newly commissioned final product cleaning circuit. This release of inventory does not reflect the normally incurred full operational revenues and cost and therefore skews the overall PGM unit cost and PGM revenues delivered. These ounces are therefore excluded from the calculation of the reported PGM unit cost below.
Chrome operations achieved 609 734 chrome concentrate tonnes for H2 CY2021 (431 390 tonnes during H1 CY2021) on the back of increased operational capacities following the commissioning of the new OBB chrome beneficiation circuit which was fully integrated with the newly commissioned upgraded Inyoni PGM facility during the period under review.
In Zambia, copper production increased to 1 314 tonnes of copper for H2 CY2021 (H1 CY2021: 774 tonnes) as part of ensuring operational readiness to accept first copper concentrate production from Project Roan. Project Roan’s integrated copper concentrator near completion during the reporting period with early commissioning activities underway at the time of writing. The Roan concentrator is targeted to ramp up during the current period to deliver a targeted 10 000 tonnes of copper units annually. The fully operational Sable Refinery delivered increased positive earnings as part of its operational readiness activities with attributable operational earnings of £ 3.2 million for H2 CY2021, compared to £ 1.9 million for H1 CY2021.
The table below presents the combined unaudited operational revenue and operational earnings performance for H2 CY2021:
| COMBINED | Project revenue (£’000) | Project revenue 1 (ZAR’000) | Project earnings (£’000) | Project earnings (ZAR’000) | Jubilee attributable earnings2 (£’000) | Jubilee attributable earnings (ZAR’000) |
| H2 CY2020 | 51 949 | 1 101 115 | 31 174 | 662 531 | 29 500 | 627 336 |
| H1 CY2021 | 75 623 | 1 526 846 | 40 383 | 819 965 | 40 118 | 814 643 |
| H2 CY2021 | 61 813 | 1 264 325 | 20 215 | 413 480 | 19 002 | 388 663 |
1- 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
2- Attributable earnings represent Jubilee’s net share of operational earnings after distributions to JV partners and before development costs
PGM Operations Update – South Africa
Jubilee’s PGM operations consist of the Inyoni PGM operations and the Windsor PGM JV (operated under a JV agreement with Eland Platinum). Jubilee successfully completed and commissioned the new fully integrated and enlarged chrome and PGM facility at the 100% owned Inyoni during November 2021. The investment in Inyoni has materially increased the Group’s production capacity of PGM ounces and, importantly, increases the proportion of the ounces produced that are fully attributable to Jubilee along with the associated earnings compared with the significant dilution of earnings caused by the Windsor PGM JV where up to 40% of earnings was attributable to the JV partner.
The new Inyoni facility integrates the new OBB Chrome Plant with the expanded and upgraded Inyoni PGM operations. The Inyoni PGM operations were expanded to increase its processing capacity by 45% to 75 000 tonnes per month and to diversify its capacity with the addition of a multi feed blending circuit and additional PGM recovery circuit. This has allowed for the feeding and recovering of PGMs from a wide variety of feed material. This new fully integrated chrome and PGM circuit has overcome the historical limitations of only being able to process material from the then Hernic operations and historical waste. The new integrated chrome and PGM facility increases Jubilee’s Inyoni operational capacity to 615 000 tonnes per annum of chrome concentrate and 44 000 ounces of PGM per annum. This increased Inyoni capacity reduces Jubilee reliance on the Windsor PGM JV, reducing future earnings dilution and exposure to significantly reduced efficiencies. Jubilee now holds an annual PGM capacity that consists of up to 44 000 PGM ounces at Inyoni (previously only 30 000 PGM ounces) with the additional option of accessing the Windsor PGM JV at a capacity of 16 000 PGM ounces – this represents a material increase in the anticipated production of PGM ounces which will be attributable to Jubilee. Following the recommissioning of the integrated Inyoni operation and the restocking of the in-process pipeline the expected production target for the full financial period is readjusted to between 43 000 to 48 000 PGM ounces depending on the supplementary production achieved for the remaining period through the Windsor PGM JV.
The investment by Jubilee into the completed integrated project totalled £ 17.5 million (ZAR 377 million) and it illustrates Jubilee’s continued commitment to investing into its operations to creating the foundation for sustained future growth.
As announced on 3 and 4 June 2021, Jubilee’s current PGM operational footprint has been largely focused on the Western Limb, a single area of the two main PGM areas in South Africa. The Eastern Limb has been a key focus for Jubilee to expand its PGM reach and operational capacity following the completion of its fully integrated Inyoni facility. The additional PGM Supply Agreements from the Eastern Limb entered into gives Jubilee access to this area offering a platform to establish a dedicated integrated chrome and PGM facility and to pursue further growth opportunities.
The Eastern Limb PGM Supply Agreements are mostly based on the LG6 chrome reef known for its high rhodium content accounting for approximately 12% of a produced PGM ounce compared with as low as 7% of other chrome reefs. The PGM Supply Agreements has secured the rights to long term PGM feed supply with the potential to produce up to 14 500 PGM ounces per annum, with further growth opportunities available. Jubilee will initially process the increased PGM feed at the Company’s expanded and newly integrated Inyoni PGM operations, while pursuing the implementation of a dedicated processing facility in the Eastern Limb. The temporary increase in costs to transport this material to our Western Limb Inyoni facility is offset by the strategic investment to secure the material for the Eastern Limb strategy and the long-term growth it offers.
During the period, the Company maintained its contractual obligations to deliver the required PGM production despite its Inyoni PGM operation only being partially operational to achieve 20 316 PGM ounces sold for H2 CY2021 (H1 CY2021: 21 975 ounces). The PGM results are skewed and impacted by the staged decommissioning and recommissioning of the new integrated Inyoni facility over the reporting period resulting in the once of release of certain lower PGM grade inventories and the refilling of the operational pipeline over the period. The total PGM ounces sold included in-process stock released as part of the recommissioning of the expanded and upgraded PGM facility. The in-process stock was sold as a lower grade PGM material and prior to the completion of the newly commissioned final product cleaning circuit. This release of inventory, which does not reflect the normally incurred full operational cost, skews the PGM unit cost and PGM revenues delivered. These ounces are excluded from the calculation of the reported PGM unit cost below.
Operational project unit costs expressed as US$ per PGM ounce produced consisted of US$ 560 per ounce processing unit cost and a US$ 262 per PGM ounce transport cost for the material sourced from the Eastern Limb. The average PGM basket price realised per ounce sold reduced by 35% over the period but showed a strong recovery at the end of the period which was sustained during January 2022.
The table below presents the combined unaudited operational revenue and operational earnings performance for PGMs for H2 CY2021:
| PGM | PGM ounces delivered | Project revenue (£’000) | Project revenue (ZAR’000)1 | Project earnings (£’000) | Project earnings (ZAR’000) | Jubilee attributable earnings2 (£’000) | Jubilee attributable earnings (ZAR’000) | Unit cost / PGM oz (US$) |
| H2 CY2020 | 28 187 | 36 593 | 776 032 | 26 959 | 572 782 | 26 387 | 560 450 | 470 |
| H1 CY2021 | 21 975 | 47 155 | 956 869 | 36 725 | 746 657 | 36 459 | 741 335 | 658 |
| H2 CY2021 | 20 316 | 23 885 | 488 544 | 14 966 | 306 117 | 13 753 | 281 300 | 8223 |
1. 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
2. Attributable earnings represent Jubilee’s net share of operational earnings after distributions to JV partners and before development costs
3. Unit cost includes a transport cost component of US$262 per PGM ounce
Chrome Operations Update – South Africa
As previously announced, in November 2020 Jubilee commenced the construction of an additional 80 000 tonnes per month OBB Chrome Plant, which on completion increased Jubilee’s overall processing capacity to 250 000 tonnes of chrome ore and tailings per month. The facility consists of four integrated chrome recovery circuits to maximise chrome efficiencies, which includes Jubilee’s fine chrome operation.
The final integration of the new OBB Chrome Plant into the new and upgraded Inyoni PGM facility was completed in November 2021. The operational levels of the OBB Chrome Plant were largely maintained during the rebuild and commissioning of the new Inyoni facility with the produced PGM discard from the OBB Chrome Plant stockpiled for later reintroduction into the new fully integrated chrome and PGM facility.
Chrome operational earnings for H2 CY2021 increased by 15%, to £ 2 million from H2 CY2021. Chrome revenue for H2 CY2021 increased by 28% to £ 30 million from H2 2021.
The table below presents the combined unaudited operational revenue and operational earnings performance for chrome for H2 CY2021:
| CHROME | Chromite concentrate producedTonnes | Project revenue (£’000) | Project revenue1 (ZAR’000) | Project and Jubilee attributable earnings (£’000) | Project and Jubilee attributable earnings (ZAR’000) |
| H2 CY2020 | 319 834 | 11 565 | 244 435 | 1 320 | 28 522 |
| H1 CY2021 | 431 390 | 23 340 | 468 153 | 1 762 | 35 576 |
| H2 CY2021 | 609 734 | 29 872 | 611 004 | 2 034 | 41 600 |
1- 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
Chrome prices continued to be volatile during the period under review due to the disruptions in the supply chain over the sixth-month period. These price fluctuations are expected to continue over the next six months as the world emerges from the Covid-19 pandemic and supply and demand fundamentals are better matched.
Zambian Operations Update
The roll-out of Jubilee’s copper and cobalt strategy offers the potential of significant continued earnings growth in addition to the achievements of its PGM and chrome operations.
Background
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 6.4 million tonnes of surface waste assets containing zinc, lead and vanadium pentoxide in addition to the approximately 300 million tonnes of copper and cobalt tailings secured in 2020.
As previously announced, during 2020, Jubilee entered into joint venture agreements to secure rights to process over 300 million tonnes of copper and cobalt containing tailings in Zambia. The copper and cobalt tailings are located in three central locations named Project Roan, Project Lechwe and Project Elephant.
Jubilee aims to construct a processing facility at each of the three locations. The scope of the processing facilities will be determined by the refining capacity at its Sable Refinery, currently standing at 14 000 tonnes per annum. Jubilee has a set target to expand its access to refining capacity, to achieve a targeted 25 000 tonnes of copper units per annum.
During H1 2021, the first of the processing facilities entered its construction phase at Project Roan, which targets an annual production rate of 10 000 tonnes of equivalent copper units.
The Project Roan copper concentrator neared completion during the reporting period with early commissioning activities commencing. The completion of construction has commenced well post the period, with the final integration of the copper oxide and copper sulphide circuit targeted for completion during March 2022 to complete the ramp-up of the fully integrated circuit during the current period.
The table below presents the combined unaudited operational revenue and operational earnings performance for copper for H2 CY2021:
| COPPER | Copper units producedTonnes | Project revenue (£’000) | Project revenue 1 (ZAR’000) | Project and Jubilee attributable earnings (£’000) | Project and Jubilee attributable earnings (ZAR’000) |
| H2 CY2020 | 614 | 3 791 | 80 648 | 1 793 | 38 365 |
| H1 CY2021 | 774 | 5 128 | 101 824 | 1 897 | 37 732 |
| H2 CY2021 | 1 314 | 8 056 | 164 776 | 3 215 | 65 762 |
1- 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
Project Lechwe Update – Zambia
During the period, the completion of the design work for the Company’s second copper processing facility, Project Lechwe, whereby Jubilee has secured the rights to approximately 150 million tonnes of copper containing surface tailings, further progressed with final pilot runs under way to confirm the design work. Project Lechwe targets to reach the production of 7 500 copper units per annum in addition to Project Roan by Q2 of CY2023.
