Jubilee Metals Group PLC (LON:JLP /Altx: JBL), a diversified leader in metals processing with operations in Africa, has announced its audited results for the year ended 30 June 2023. Today, Jubilee is also publishing, its Integrated Annual Report.
Jubilee has delivered a strong operational performance which has assisted in buffering some of the challenging market conditions, brought on by a fast-depreciating PGM basket price and infrastructural challenges in both operating jurisdictions. The operational performance served to demonstrate Jubilee’s ability to challenge industry norms by breaking through technical barriers and implementing solutions that extract value from materials and ore sources that were previously regarded by others as waste or too complex.
Key milestones and achievements for the year
· Record production figures across our PGM, chrome and copper operations with 42 433 PGM oz (exceeding guidance and up 2% year-on-year) 1 289 890 chrome concentrate tonnes (up 7%) and 2 923 copper tonnes (up 29%).
· Successfully implemented an investment programme of £36 million (FY2022: £58 million) equivalent to US$44 million (FY2022: US$70 million) to diversify and expand our operations in chrome, PGM, copper and cobalt.
· Commissioned a state-of-the-art expanded PGM processing facility, designed to process PGM tailings and ores, previously regarded as waste. This versatile facility boasts an annual production capacity of 44 000 oz of PGMs.
· Further expanded the chrome operational footprint through the implementation of a long-term chrome ROM offtake agreement offering increased chrome margins capable of offsetting the lower PGM margins.
· In South Africa, to address the infrastructure challenges, we initiated the installation of backup power units at our chrome facilities and managed stock levels to ensure continuous operations.
· In Zambia, we achieved significant advancements by formulating breakthrough process flow sheets for the treatment of mixed and transitional copper reefs as part of our 14 000 tonnes per annum Southern copper strategy. These breakthroughs form part of the process flowsheet upgrade at Roan currently underway.
· The upgraded flowsheet offers significant lower capital expansion opportunities within Zambia.
· The technical team is in the process of innovating a copper waste leach circuit for the treatment of copper and cobalt tailings, as part of our Northern Refining copper strategy. The development phase has commenced with upscaled continuous pilot runs to confirm the encouraging results achieved to date.
· Effectively addressed the infrastructure issues associated with the new Roan Concentrator. A modern water infrastructure system was completed in December 2022, followed by an enhanced power infrastructure finalised in February 2023.
Financial highlights
· Revenue from operations increased by 1% to £142 million (FY2022: £140 million) equating to US$171 million (FY2022: US$186 million) with growth in US$ chrome revenue predominately offsetting the market driven decrease in PGM revenue.
· Gross profit was lower at £31 million (FY2022: £45 million) equivalent to US$38 million (FY2022: US$60 million) impacted mainly by:
o Lower average PGM basket prices year-on-year decreasing by 22% to US$1 262 (FY2022: US$1 615)
o Increase of 11% in US$ operating cost per PGM oz driven mainly by the increase in power and logistic costs
o Initial decrease during H1 FY2023 in chrome margins mainly due to power constraints which was addressed through the roll-out of back-up power systems
o Decrease in copper revenue per tonne of 19% to US$7 451 (FY2022: US$9 210)
o Continued expected growth of the chrome operations offering the potential to offset lower PGM margins
· EBITDA decreased to £24.8 million (FY2022: £36.8million) or US$29.8 million (FY2022: US$48.9 million).
· Cash from operating activities was supported by increased contribution from operational expansions and remained strong at £31 million (FY2022: £35 million) equivalent to US$37 million (FY2022:US$42 million).
· The Group’s earnings per share decreased by 35% to 0.48 pence (FY2022: 0.73 pence), as a result of the weighted average number of shares increasing by 9% to 2 687.7 million shares (FY2022: 2 455.5 million shares) predominately due to the exercise of warrants during the financial year and earnings attributable to owners of the parent decreasing by 28% to £12.9 million (FY2022: £18.0 million) or US$15.5 million (FY2022: US$24.0million).
· Group cash and cash equivalents at 30 June 2023 of £12.5million (FY2022: £16 million) or US$15.9 million (FY2022 US$19.5 million).
· A robust net cash position supporting the Group’s current assets to cover total liabilities by 103% (FY2022: 131%).
· The Group’s equity reduced marginally to £205 million (FY2022: £207 million), predominately due to the profit after taxation off-set by the movement in the foreign currency translation reserve as a result of the weakening ZAR and ZMW against the pound during the period under review. The Group continues to maintain a strong equity ratio of 68% (FY2022: 71%).
Project and operational highlights
South Africa
· In FY2023, our South African operations achieved 177 days without any Lost Time Injuries (LTIs), compared to 162 days in FY2022. This translates to a consistent LTIFR rate of 1.5, mirroring our previous year’s performance.
o The company was saddened by the loss of life suffered by a service provider to our operations earlier in the year.
· PGM oz sold increased by 2% to 42 433 oz (FY2022: 41 586 oz), exceeding full year guidance of 38 000 oz.
· Chrome tonnes sold increased by 4% to 1 275 287 tonnes (FY2022: 1 222 452 tonnes) exceeding full year guidance of 1 200 000 tonnes.
· Net cost per PGM oz net of chrome credits of US$508 (FY2022:US$408), remaining firmly as one of the lowest cost producers of PGMs.
· South African operations have reached stable production meeting the market guidance and offering significant growth opportunities.
· On 6 June 2023, we proudly announced a significant, long-term processing partnership. This collaboration increases our chrome ore processing capacity by 360 000 tonnes annually offering the potential to produce an additional 160 000 tonnes of chrome concentrate per annum at improved margins together with an associated feed to our PGM operations of 10 000 PGM ounces. The move into higher margin chrome offtakes offers Jubilee:
o The opportunity to obtain greater exposure to the chrome price and achieve higher margins compared with the existing fixed price chrome tolling agreements;
o The option to further expand the partnership to expand the processing capacity to 720 000 tonnes per annum of chrome ore;
o The opportunity of additional expansion opportunities leveraging Jubilee’s proven chrome efficiency capability, setting a target annualised chrome concentrate production rate of 2 million tonnes (60% expansion) over the next two years further strengthening Jubilee’s position as one of the largest chrome producers globally.
Zambia
· Zambian operations sustained a robust safety performance, achieving 122 LTI free days (FY2022: 185 LTI free days), and commensurately realising a reduction in the LTIFR to 2.4 (FY2022: 2.9).
· Successfully mitigated power and water disruptions by completing a new, privately-owned water infrastructure in December 2022 and augmenting the power infrastructure in February 2023.
· Copper production improved by 29% to 2 923 tonnes (FY2022: 2 269 tonnes), marginally below the Group’s revised guidance of 3 000 tonnes primarily due to previously announced power and water disruptions in Zambia, impacting the ramp-up of the Roan Concentrator.
· Decision taken to further upgrade the Roan concentrator to implement new technical advances and address lessons learnt in the processing of weathered and transitional copper ores. The expansion and upgrade of Roan has commenced and is expected to be completed during Q2 FY 2024.
· Jubilee successfully developed a breakthrough process flow sheet for the treatment of mixed and transitional copper reefs as part of our 14 000 tonnes per annum Southern copper strategy.
· This modular flowsheet development offers the potential to unlock numerous transitional copper ore opportunities in Zambia at a significantly reduced capital investment per opportunity.
· The Northern Copper Strategy continues to progress with the development phase entering upscaled continuous pilot trials to confirm results achieved to date. If successful, Jubilee believes this would solve the technical barrier to unlock the recovery of copper and cobalt from the vast quantity of copper tailings at surface in Zambia.
Financial highlights
South Africa
· Net revenue from our South African operations for FY2023 increased to £125 million (FY2022: £121million) up 3% from FY2022, equivalent to US$151 million (FY2022: US$162 million).
· Gross profit from South African operations for FY2023 reached £27 million (US$32 million) down 30% from FY2022 maintaining a healthy of 21% despite a 22% decline in the PGM US$ revenue per oz and external operating cost drivers of power and logistics.
· Chrome earnings margin of 12% (FY2022:13%) despite a rise in operating costs of 10% to £56/t (FY2022: £51/t). Operating costs in US$ terms remained consistent year-on-year.
· PGM cost per oz US$508 (FY2022: US$408) net of chrome credits driven higher mainly by cost of power and reliance on back-up power.
Zambia
· Net revenue from Zambian operations decreased by 8% driven by sifter market prices to £17 million (FY2022: £18 million) equivalent to US$20 million (FY2022: US$24 million) for the year.
· Gross profit from Zambian operations decreased by 35% to £5 million (FY2022: £8 million) and in US$ terms US$ 7.5 million (FY2022: US$10 million) for the year.
· Copper unit cost per tonne down 2% to US$5 281 (FY2022: US$5 386).
· Total capital investment to date to deliver the integrated Southern Copper Refining Strategy of £63 million (US$74 million) which includes the integrated Sable Copper and Cobalt Refinery and the Roan Concentrator.
Prospects for FY2024
SOUTH AFRICA
· FY2024 offers the potential for growth in earnings as it benefits from the expansion drive into high margin chrome operations at a time when the market is experiencing strong demand for chrome products:
o An additional 60 000 tonnes of higher margin chrome concentrate is targeted for the first 6 months of FY2024 (150 000 tonnes over the full period) reaching an additional 15 000 tonnes per month at stable production.
o The production of chrome forms a critical part of the South African business’ profitability and cost competitiveness. Jubilee will continue to expand its chrome operational footprint on attractive, market-linked terms during the period.
· The Company confirms its guidance of achieving 1.45 million tonnes of chrome concentrate for FY 2024.
· The Company will seek to incrementally expand its PGM production footprint to match the growing demand from the expansion of the chrome operations.
· Considering the prevailing PGM basket prices, the Company has opted to prioritise enhancing the efficiency of existing PGM capacity. We are also assessing potential Joint Ventures to accommodate additional PGM feed materials, which presents a cost-effective PGM expansion option for the Group. As part of this decision the construction of a new PGM facility in the eastern limb of South Africa has been placed under review.
· The Company confirms its guidance of 42 000 PGM ounces for FY2024.
Zambia
· The Southern Copper strategy targets the processing of weathered and transitional copper reefs traditionally discarded as waste.
o Jubilee developed breakthrough modular circuit designs targeting the recovery of copper from these reefs;
o Modular circuit design offers potential for rapid deployment based on learnings from the South African operations;
o Modules range from 15 000 to 50 000 tonnes per month processing capacity at lower capital of US$2.5 million for a 15 000 tonnes per month module;
o Modules targeted as part of Roan upgrade with two further modules considered under current long term offtake agreements being negotiated.
· The Company confirms its guidance of 5 850 tonnes of copper for FY 2024 which is impacted by the upgrade at Project Roan.
· As part of the development of the Northern Copper strategy, upscaled continuous process trials have commenced to both confirm the results achieved to date as well as the process flow sheet assumptions. The continuous trials will run over an extended period of approximately 10 weeks to ensure the accuracy of the results.
Leon Coetzer, CEO, commented: “I am pleased to report another year of significant growth at Jubilee in which we have demonstrated our ability to navigate through some challenging infrastructure conditions. The company successfully countered the sharp drop in the PGM basket price by expanding its chrome operations into higher-margin offtake agreements, resulting in a robust net cash position and strong cash generation. Investments in power infrastructure in South Africa and Zambia were crucial in addressing power outages and stabilizing supply, while a new private water infrastructure investment resolved disruptions issues at the Roan operations.
“This year-on-year improved production performance reflects the company’s ongoing investment strategy in expansion opportunities, with a belief in continued positive results in the short and medium term. The organisation remains committed to challenging itself to improve operational efficiencies, embodying what they refer to as the “Jubilee Way.”
“In South Africa, our operations continue maintain its status as one of the lowest cost PGM producers and our commitment to safety is evident with 177 days without any Lost Time Injuries. New processing partnerships announced in the year are expected to significantly enhance margins and processing capacities. Jubilee is also poised for growth in Zambia, investing further in our new copper division including upgrading our Roan Concentrator to boost copper output. Technical breakthroughs from the development centre offer substantial near-term growth opportunities in Zambia.
“In conclusion, the success of Jubilee can be attributed to the unwavering dedication of our employees, strategic investments, and agility in addressing challenges. The company remains committed to delivering value to stakeholders and strengthening our market position, and I continue to have every confidence our investments will generate significant returns for shareholders in the short and long term.”
GROUP KEY PERFORMANCE INDICATORS
| % change | FY2022 | FY2023 | Unit | GROUP KEY UNITS OF PRODUCTION | Unit | FY2023 | FY2022 | % change |
| PGM ounces sold | ||||||||
| (5%) | 35 318 | 33 376 | Oz | – Inyoni | Oz | 33 376 | 35 318 | (5%) |
| 44% | 6 268 | 9 057 | Oz | – Third party JV | Oz | 9 057 | 6 268 | 44% |
| 2% | 41 586 | 42 433 | Oz | Total PGM ounces sold | Oz | 42 433 | 41 586 | 2% |
| 29% | 2 604 | 2 923 | Tonne | Copper tonnes sold | Tonne | 2 923 | 2 604 | 29% |
| UNIT REVENUE | ||||||||
| (22%) | 1 615 | 1 262 | $/oz | Revenue per PGM ounce | £/oz | 1 048 | 1 215 | (14%) |
| (19%) | 9 210 | 7 451 | $/t | Revenue per copper tonne | £/t | 6 187 | 7 047 | (12%) |
| UNIT COSTS | ||||||||
| 24% | 408 | 508 | $/oz | Net cost per PGM ounce (after by-product credits chrome) | £/oz | 422 | 305 | 38% |
| (2%) | 5 386 | 5 281 | $/t | Net cost per copper tonne (after by-product credits cobalt) | £/t | 4 385 | 4 165 | 5% |
| UNIT EARNINGS | ||||||||
| (38%) | 1 207 | 754 | $/oz | Net earnings per PGM ounce | £/oz | 627 | 910 | (31%) |
| (43%) | 3 824 | 2 171 | $/t | Net earnings per copper tonne | £/t | 1 802 | 2 882 | (37%) |
| GROUP KEY FINANCIAL INDICATORS | ||||||||
| (1%) | 37 643 497 | 37 443 796 | US$ | Capital spend | £ | 47 409 212 | 30 993 020 | 53% |
| (10%) | 41 276 419 | 37 336 216 | US$ | Cashflow from operating activities | £ | 31 006 607 | 31 005 195 | 0% |
| (8%) | 186 387 702 | 170 901 624 | US$ | Revenue | £ | 141 928 672 | 140 006 986 | 1% |
| (39%) | 48 955 819 | 29 841 994 | US$ | EBITDA | £ | 24 782 880 | 36 773 653 | (33%) |
| (2%) | 5.90 | 5.77 | US cent | Tangible net asset value per ordinary share (pence) | pence | 4.56 | 4.86 | (6%) |
Audit Opinion
The auditor’s report on the annual financial statements of the Group was unqualified and did not contain any statements under section 498(2) or (3) of the Companies Act 2006.
Notice of Annual General Meeting and availability of the Group’s Annual Financial Statements
The Company also hereby gives notice of its 2023 Annual General Meeting (“AGM”), which will be held on 3 November 2023 at 11:00 am UK time at the offices of Fladgate LLP, 16 Great Queen Street, London, WC2B 5DG, to transact the business as stated in the notice of AGM. The Group’s Annual Report for the year ended 30 June 2023, along with the Notice of AGM, have been posted to the website, www.jubileemetalsgroup.com.
Salient Dates:
| Shareholders on the register who are entitled to receive the notice of AGM (SA) | 29 September 2023 |
| Notice of AGM posted to shareholders | 11 October 2023 |
| Last date to trade in order to be eligible to participate in and vote at the AGM (SA) | 27 October 2023 |
| Record Date for the purposes of determining which shareholders are entitled to participate in and vote at the AGM (UK)Record date for purpose of determining which shareholders are entitled to participate and vote at the AGM (SA) | 1 November 2023 1 November 2023 |
| Latest time and date for receipt of CREST Proxy Instruction and other uncertificated instructions (UK)Latest time and date for receipt of dematerialised holding instruction and other uncertified instructions (SA) | 11:00 am (UK time) 1 November 20231 pm (SA time) 1 November 2023 |
| Annual General Meeting | 11:00 a.m. (UK time) 03 November 2023 |
| Results of the Annual General Meeting released on RNS and SENS | 03 November 2023 |
Integrated Annual Report
The Integrated Annual Report for the year ended 30 June 2023 is also available on the Company’s website today at www.jubileemetalsgroup.com. Physical copies of the Annual Report will be posted to shareholders who have elected to receive them.
