Quarterly Operations Update Q3 2018

RNS Number : 3182E

Jubilee Metals Group PLC

17 October 2018

 

Jubilee Metals Group PLC

Registration number (4459850)

AltX share code: JBL

AIM share code: JLP

ISIN: GB0031852162

("Jubilee" or "the Company")

Quarterly Operations Update

Q3 2018

Highlights

·    Hernic project's operational earnings attributable to Jubilee up 19% to GBP 1.92 million (up 28% to ZAR 35.52 million)

·    Hernic PGM^* production up 4% to 6 009 ounces

·    PGM^* production record set of 2 270 ounces in a month

·    Combined operational earnings attributable to Jubilee up 8% to GBP 1.78 million (up 16% to ZAR 32.89 million)

·    Construction of fine chrome recovery plant at DCM progressing to schedule

·    Targeted execution strategy for the Kabwe zinc and lead project

* 6 Element Platinum Group Metals

Leon Coetzer, Chief Executive Officer, says:

"I am very pleased to report yet another solid performance by the Jubilee team.  I am equally excited with the traction gained in the implementation of our global metals recovery strategy.  We have seen a growing demand from both small and global mining companies to work with Jubilee in accessing the metals lost in the current and historical mine waste. 

Our Hernic project has breached our targeted 6 000 PGM ounces produced in a single quarter. The project continues to increase earnings as we focus to further increase the feed rate to the facility. The operational costs for the project remain well contained, delivering a cost of less than USD400 per produced PGM ounce.

The construction of our fine chrome recovery plant is well underway at our DCM plant, targeting completion by November 2018.  Once completed the fine chrome recovery plant will target the recovery of the approximate 620 000 tonnes of chrome material contained in the existing DCM tailings dam alone.   An initial recovery target of 52% has been set.

 Our Kabwe project has seen the successful conclusion of the research and design of the zinc recovery circuit. The new circuit design includes pre-processing of the surface tailings to produce an upgraded product for further leaching and refining.  The refinery will target an initial throughput of approximately 10 000 tonnes per month ramping up to an approximate 25 000 tonnes per month at completion of the project.  The new refining circuit offers the further potential to secure future ore supply from current zinc explores in the region."

Hernic Project - Platinum and Chrome (South Africa)

The Hernic Project delivered another stellar performance for Q3 continuing its performance improvement quarter on quarter since commissioning.   Ounces delivered breaks through the 6 000 ounces target set for the project for the first time since the start of production in April 2017.  Hernic Project earnings increased by 28% in ZAR terms quarter on quarter.   The project further improved on its cost base per PGM ounce producing below USD400 per PGM ounce.  Q3 included a new record production of 2 270 PGM ounces in a single month.  We expect to further increase this production rate in line with the focussed increase in reclaimed surface material delivered by Hernic.

The table below presents the comparative quarterly performance of the Hernic project:

	Tailings processed tonnes	PGM ounces delivered	Project revenue  (GBP'000)1	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)4
Total Q1 2018	110 409	4 897	2,651	44,013	1,141	18,908	1,141	18,908	434
Total Q2 2018	119 479	5 800	3,308	56,761	1,612	27,686	1,612	27,686	397
Total Q3 2018	135 146	6 009	3 356	61,785	1,920	35,523	1,920	35,523	311
Project to date	673 178	24 141	13,361	233,755	6,024	106,247	6,024	106,247	407

1= Revenue from the current project phase - 100% attributable to Jubilee until full capital recovery. 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

4= Unit cost includes provision for utility overhead.

DCM Project - Chrome (South Africa)

The construction of the fine chrome recovery project is progressing to schedule. Commissioning of the new expanded fine chrome recovery circuit remains on track for Q4 2018.  The fine chrome project is expected to significantly enhance revenues and earnings for the DCM Project. The DCM fine chrome recovery plant targets the recovery of chrome currently lost by the chrome industry in general. This new fine chrome recovery plant also serves as a demonstration plant to the chrome industry. Jubilee has received several enquiries from the chrome industry to also access the fine chrome currently lost by the industry. 

Production rates at DCM have been reduced to facilitate the construction and tie-in of the new fine chrome recovery plant. The reduced throughput rates will continue during the construction and commissioning of the fine chrome plant.

The table below presents the operational quarterly performance of the DCM Project:

	Chromite concentrate produced tonnes	Project revenue (GBP'000)1	Project revenue  (ZAR'000)	Project earnings2 (GBP'000)	Project earnings (ZAR'000)	Jubilee attributable earnings (GBP'000)	Jubilee attributable earnings (ZAR'000)
Total Q1 2018	9 810	1,240	20,628	245	4,080	123	2,040
Total Q2 2018	9 461	1,066	18,297	74	1,264	37	632
Total Q3 2018	8 053	592	10,824	(288)	(5,278)	(144)	(2,639)
Project to date3	147 973	15,833	274,211	7,572	130,392	2,674	46,554

1 = Average monthly conversion rates used

2 = Project earnings include project expenditure on plant and equipment

3= Since April 2017

PlatCro Project - Platinum (South Africa)

The PlatCro Project remains on track for commissioning in February 2019. The construction of the material reclamation and dewatering plant is progressing to schedule which is targeted for completion during Q4 2018.  This plant will facilitate the ramp-up of material delivery to the Eland platinum concentrator targeting a rate 50 000 to 60 000 tonnes of platinum rich material per month.

Kabwe Project - Zinc, Lead and Vanadium Project (Zambia)

As announced on 6 August 2018, Jubilee was able to ensure that the success of the Kabwe Project remains independent of the financial position of BMR with the option to acquire 100% of the Kabwe Project.  

Following a detailed technical and engineering review by Jubilee of the Kabwe Project, its process development teams were able to determine a more suitable process solution for the recovery of lead and zinc in the surface material than the originally contemplated acid and brine solution.  The enhanced solution includes a dedicated zinc and lead recovery circuit, initially targeting the recovery of zinc with the discard of the zinc circuit being further processed in the lead recovery circuit.

A phased execution methodology has been developed which targets an initial processing rate of approximately 10 800 tonnes per month ramping up to 25 000 tonnes per month over two further phases. The phased implementation of the process solution links in with the completion of the pre-processing of the surface material prior to the zinc recovery plant as well as the implementation of the lead recovery circuit on the back end of the zinc circuit.

Pilot runs have indicated that we are able to increase the zinc grade through pre-processing of the surface material by more than 50% prior to introducing the material to the zinc leach circuit. This upgrading of the feed material successfully buffers the project's economic viability against largely fluctuating acid prices in Zambia.  The tried and tested techniques used to achieve the significant upgrade in feed material was developed by Jubilee initially for its chrome and PGM operations. 

As part of the current strategy Jubilee is reviewing the potential of accessing existing zinc refining capacity located near the Kabwe Project.  The relatively limited upgrade required to the refinery would offer the potential to significantly shorten the project execution time line for the zinc recovery circuit.  Jubilee has estimated an upgrade period of approximately 4 months to adapt the refinery to the Kabwe material.  During the interim period while this potential is being assessed, the implementation of the tailings re-mining facility and the pre-processing plant for the feed material will continue at the Kabwe Project.  Jubilee expects to conclude this strategy review during Q4 2018.  

United Kingdom

17 October 2018

 Contacts

Jubilee Metals Group PLC

Colin Bird/Leon Coetzer
Tel [phone] / Tel [phone]

Nominated Adviser

SPARK Advisory Partners Limited
Mark Brady/Andrew Emmott
Tel: [phone]

Broker

Shard Capital Partners LLP
Damon Heath/Erik Woolgar
Tel [phone]

JSE Sponsor

Sasfin Capital (a member of the Sasfin group)

Sharon Owens
Tel [phone]

 

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