Jubilee Metals Group plc (LON:JLP) has announced its intention to conduct a conditional placing of new ordinary shares in the Company to raise gross proceeds of approximately £10 million (approximately US$12 million), before expenses, by way of the issue of new ordinary shares in the capital of the Company to new and existing eligible investors at a price of 5.5 pence per share.
The following sets out the background to, and the reasons for, the Placing and explains why the Directors consider the Placing to be in the best interests of the Company and its Shareholders as a whole.
Background
As announced on 12 December 2023, Jubilee Metals executed a binding agreement, subject to certain conditions, to progress the strategic investment into a historical copper waste rock dump in Zambia. Early estimates suggest that there could be as much as 350 million tonnes of waste rock material on surface, with preliminary surface sampling returning grades of 1.5% copper (the “Project”). In addition, on the same date, the Company announced a binding term sheet with Abu Dhabi based International Resources Holding RSC Limited. Subject to due diligence, and internal consents, it is intended that Jubilee and IRH will form a dedicated special purpose vehicle (“the SPV”) before the end of January 2024, through which both the acquisition of the copper waste rock asset and the implementation of the processing solution will be funded. Jubilee will hold a minimum of 30% funded position of the SPV. In addition, Jubilee will be appointed to manage the date to day operation of the SPV as well as be appointed to design, implement and operate the process solution. The consideration for the acquisition of the waste rock dump is US$30 million, which is to be paid in instalments over a period of 18 months (with an initial payment of US$1.75 million) and project costs are anticipated to be in the order of US$50 million assuming the implementation of only four copper processing units capable of producing an approximate 20 000 tonnes of copper units per annum from historical waste (“Green Copper”). Further details of these arrangements are set out in the JV Announcement.
This Green Copper Project is in addition to the existing capitalisation and ramp-up of copper production through the implementation of Jubilee’s integrated Roan concentrator and Sable refinery copper operations, as well as the current expansion of its chrome operations in South Africa.
The targeted capital raise specifically focusses on this new Project to enable the accelerated implementation of the Project while maintaining the investment into the expansion of the existing copper and chrome operations.
Use of Proceeds
The Company is seeking to raise approximately £10 million (approximately US$12 million), before expenses, specifically targeting its Zambian Copper operations, in order to:
· Pay the initial payment of US$1.75 million, due under the agreement for the acquisition of the copper waste rock dump announced on 12 December 2023 detailed above and progress resource and process design (a total of c.US$4.5m).
· Expand the sulphide recovery circuits at the Company’s Sable Refinery to accommodate increased sulphide concentrate production from newly acquired projects (c.US$5.7m).
· Progress the project development phase of the Mufulira slag project, with early-stage bulk trial and processing (c.US$2.5m).
· For general working capital purposes.
Placing Details
· Placing of new Ordinary Shares to raise approximately £10 million (approximately US$12 million) (before expenses).
· Placing to be conducted via an accelerated bookbuild process launching immediately following this Announcement.
· The Placing is conditional upon the passing of the Resolution at the General Meeting.
· The Placing Shares, assuming full take-up and completion of the Placing, will represent approximately 6.23 per cent. of the Enlarged Share Capital.
· The Placing Price represents:
o a zero per cent. discount to the 30-day volume-weighted average price; and
o a discount of approximately 19 per cent. to the Closing Price of 6.8 pence per Ordinary Share on 14 December 2023, being the latest practicable date prior to the publication of this Announcement.
Leon Coetzer, CEO of Jubilee Metals, commented:
“Jubilee’s copper portfolio continues to expand in Zambia as demonstrated by our ability to secure what we believe to be the best waste rock projects. The partnership announced recently with Abu Dhabi based IRH is a hugely exciting new venture which has the potential to catapult our growth and copper production profile. This partnership affords Jubilee the opportunity to accelerate its copper from waste production profile without the associated capital burden.
The money raised will allow us to accelerate the manufacturing of our new copper modules on these new projects and importantly secure the long lead items with suppliers in what is a tight market for key materials. The funds will also allow us to expand our plant at Sable by increasing the copper sulphide capacity to meet the increase in volumes.
This proposed fundraise is in addition to our existing funded growth projects in South Africa and Zambia. By fast-tracking this new waste rock project, we will be able to bring forward production and revenues quicker than funding from existing cash flow.”
The Placing
The Placing is being conducted by WH Ireland and Joh. Berenberg, Gossler & Co. KG, London Branch as joint brokers and joint bookrunners in relation to the Placing. A placing agreement has been entered into between the Company and the Joint Brokers in connection with the Placing.
The Placing Shares are being offered by way of an accelerated bookbuild, which will open with immediate effect following the release of this Announcement, in accordance with the terms and conditions set out in Appendix III to this Announcement.
A further announcement confirming the closing of the Bookbuild and the number of Placing Shares to be issued pursuant to the Placing is expected to be made in due course.
The Placing is not being underwritten and the allotment and issue of the Placing Shares is conditional, inter alia, upon:
· the passing, without amendment, of the Resolution, at the General Meeting;
· Admission becoming effective by no later than 8.00 a.m. on 4 January 2024 (or such other time and/or date, being no later than 8.00 a.m. on 15 February 2024, as the Joint Brokers and the Company may agree);
· the conditions in the Placing Agreement being satisfied or (if applicable) waived; and
· the Placing Agreement not having been terminated in accordance with its terms prior to Admission.
Accordingly, if any of such conditions are not satisfied or, if applicable, waived, the Placing will not proceed.
The Placing Shares will be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares then in issue, including the right to receive all future distributions, declared, paid or made in respect of the Ordinary Shares from the date of Admission. The Placing Shares will represent approximately 6.23 per cent. of the Enlarged Share Capital.
Subject to satisfaction of the relevant conditions, it is expected that Admission will become effective, and dealing in the Placing Shares will commence, at 8.00 a.m. (London time) on 4 January 2024.
The Joint Brokers have the right to terminate the Placing Agreement in certain circumstances prior to Admission, including (but not limited to): in the event that any of the warranties set out in the Placing Agreement are not true and accurate when given or the Company fails to comply with any of its obligations prior to Admission. The Joint Brokers may also terminate the Placing Agreement if there has been a material adverse change in national or international financial, political, economic, monetary or stock market conditions (primary or secondary) or an imposition of or compliance with any law or governmental or regulatory order, rule, regulation, restriction or direction which, in the opinion of the Joint Brokers, makes it impractical or inadvisable to proceed with the Placing or Admission. If this termination right is exercised or if the conditionality in the Placing Agreement is not satisfied, the Placing will not proceed.
The timing of the closure of the Bookbuild, the number of Placing Shares and the allocation of the Placing Shares between Placees is to be determined at the discretion of the Company and the Joint Brokers.
A further announcement will be made following the closure of the Bookbuild, confirming the results of the Placing and a circular convening the General Meeting to consider the Resolution is expected to be despatched shortly thereafter.
The expected timetable of principal events in connection with the Placing is set out in Appendix I to this Announcement.
Capitalised terms used but not otherwise defined in this Announcement shall have the meanings ascribed to such terms in Appendix II of this Announcement, unless the context requires otherwise.
