Jubilee Metals Group PLC (LON:JLP), the AIM and AltX traded metals processing company, today announced its operational results for the six month period ended 30 June 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:
| COMBINED | Project revenue (GBP’000) | Project revenue (ZAR’000)1 | Jubilee attributable earnings (GBP’000)2 | Jubilee attributable 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:
| CHROME | Chromite concentrate producedTonnes | Project revenue (GBP’000) | Project revenue (ZAR’000)1 | Project earnings2(GBP’000) | Project earnings (ZAR’000) | Jubilee attributable earnings (GBP’000) | Jubilee attributable earnings (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:
| PGMs | Tailings processed tonnes | PGM ounces delivered | Project revenue1(GBP’000) | Project revenue (ZAR’000)2 | Project earnings3(GBP’000) | Project earnings (ZAR’000) | Jubilee attributable earnings (GBP’000) | Jubilee attributable earnings (ZAR’000) | Unit cost / PGM oz (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.
