TIDMJLP
RNS Number : 4855H
Jubilee Platinum PLC
18 August 2016
Registration number (4459850)
AltX share code: JBL
AIM share code: JLP
ISIN: GB0031852162
18 Aug 2016
Jubilee Platinum PLC
("Jubilee" or "Company")
Platinum Projects update
Mine-to-Metals specialist Jubilee Platinum plc (AIM: JLP, AltX:
JBL) is pleased to provide, on behalf of its subsidiary, Jubilee
Tailings Treatment Company Pty Ltd ("JTTC"), a performance,
operational and financial update of its chrome recovery section of
the Dilokong Chrome mine tailings project ("DCM Tailings" or "DCM
Project") and a progress update on the Hernic PGM-bearing chrome
tailings project ("Hernic Project").
Highlights
-- Chromite concentrate production of the DCM Project up 29 % to
9 670 tons in the month of July 2016 compared with June 2016
-- Project revenue from the sale of chromite concentrate for the
month of July 2016 up 33% to GBP 0.692 million (ZAR 12.1 million)
compared with the month of June 2016
-- Chromite project earnings from chromite concentrate for the
month of July 2016 up 46% to GBP 0.520 million (ZAR 9.075 million)
compared with the month of June 2016
-- Earnings attributable to Jubilee for the month of July 2016
from chromite concentrate production up 30% to GBP 0.293 million
(ZAR 5.114 million) compared with the month of June 2016
-- Since the start of the project in April 2016, project revenue
of GBP 1.69 million (ZAR31.2 million) generated from chromite
concentrate sales
-- Since the start of the project in April 2016, project
earnings of GBP 1.26 million (ZAR23.28 million) generated from
chromite concentrate sales
-- Upgraded platinum values in surface material after chromite
removal continue to exceed design expectations further increasing
expected saleable value of the contained platinum concentrate
-- Jubilee is concluding the audit of the operational readiness
at an existing platinum operation and is scheduling a full scale
commercial trial, which forms part of the option study for toll
processing as an alternative to building its own platinum plant at
DCM. This option potentially offers significant project upside
-- Construction at the Hernic Project of the 660 000 tons per
annum platinum and chromite processing plant continues to progress
to schedule targeting commencement of commissioning in December
2016
-- Project Capital expenditure on the Hernic Project to date of
GBP 6.2 million (ZAR 108.1 million) equivalent of 55% of total
estimated Project Capital which is commensurate with the percentage
project completion
Leon Coetzer, Chief Executive commented:
"Increased production month to month is very encouraging for the
Company and endorses previous decisions to focus on chrome and
platinum. The enriched platinum material stock pile continues to
grow and we are progressing options to turn stockpile to cash.
I am pleased with the progress at Hernic where construction is
on schedule and on budget. Looking back at the years' work and
results I am encouraged by our team's commitment and skills and am
looking forward to taking full advantage of the current position
and the opportunities presented to us. "
Overview
The DCM Project has continued to outperform the original design
numbers both in terms of revenue and earnings from chromite
concentrate sales as well as operational performance. The month of
July has shown further improvements in operational performance
which has more than offset the slight drop in the saleable value
per ton of chromite produced. The Company continues to process only
current surface material at DCM and have not commenced with the
processing of 3d party ore which offers the potential to
significantly further enhance the operational performance
numbers.
The enrichment of the platinum material which is produced by
recovering chromite from the surface material and rejecting low
value waste, continues to exceed our projections due to the high
operational efficiencies maintained at DCM. The enriched platinum
material continues to be stockpiled at DCM pending the outcome of
the platinum processing option study.
The option study which focusses on toll processing as an
alternative to building the Company's own platinum plant at DCM
will be concluded shortly. At present the Company's engineers are
completing an operational readiness audit of a target platinum
recovery plant to establish final time lines and required working
capital. A full scale commercial trial of the enriched platinum
material as a final test to confirm modelled financial numbers are
also being scheduled.
If the option study proves successful there will be no need to
build a dedicated platinum plant and platinum revenues will be
received at least one year earlier.
The Hernic project is in full execution mode with construction
progress of the platinum and chromite recovery plants illustrated
by continually updated project pictures on our website. The month
of August and September 2016 will show accelerated visual progress
on site, as the large platinum flotation units are being positioned
onto the completed civil structures.
DCM OPERATIONAL AND FINANCIAL PERFORMANCE
Chromite Project Project Project Project Jubilee Jubilee
concentrate revenue revenue earnings earnings attributable attributable
tons (GBP'000) (ZAR'000) (GBP'000) (ZAR'000) project project
produced earnings earnings
(GBP'000) (ZAR'000)
-------------- ------------- ----------- ----------- ----------- ----------- -------------- --------------
July 2016 9 670 692 12 100 520 9 075 293 5 114
-------------- ------------- ----------- ----------- ----------- ----------- -------------- --------------
June 2016 7 480 519 9 905 356 6 793 226 4 315
-------------- ------------- ----------- ----------- ----------- ----------- -------------- --------------
% change
month
on month 29% 33% 22% 46% 34% 30% 19%
-------------- ------------- ----------- ----------- ----------- ----------- -------------- --------------
Q2 2016 15 188 1,002 19,137 744 14,203 456 8,710
(May,
June 2016)
-------------- ------------- ----------- ----------- ----------- ----------- -------------- --------------
YTD 24 927 1 671 31 218 1 263 23 278 749 13 824
-------------- ------------- ----------- ----------- ----------- ----------- -------------- --------------
July 2016 production showed significant improvement from the
stable production levels reached in June 2016 with an increase in
production of saleable chromite concentrate of 29% reaching a new
monthly high of 9 670 tons.
All chromite production to date at DCM is from the processing of
platinum and chrome containing surface tailings alone. Stated
Project earnings is net of operational cost and cost of chromite
concentrate sales.
The saleable chromite concentrate price in ZAR terms reduced in
July 2016 due to the strengthening of the ZAR against the US dollar
and other major currencies. Jubilee was able to offset this drop in
the ZAR chromite concentrate price by improved operational
efficiencies as illustrated by the increased production rate for
July 2016. The operational cost at DCM is incurred in ZAR.
Disposal of Middelburg operations
The Company announced in February 2016 an update on the final
payment due to the Company regarding the disposal of 100% of the
issued shares in Jubilee Smelting and Refining Proprietary Limited
("JSR"), and 70% of the issued shares in Power Alt Proprietary
Limited ("PA") ("Disposal"), to Siyanda Resources Proprietary
Limited ("Siyanda") through its newly named nominated special
purpose vehicle Hornbill Investments Proprietary Limited ("SPV").
As stated previously 10% of the remaining 15% of the purchase
consideration is held in escrow with an approximated amount of
GBP0.510 million (ZAR8.9 million), net of closing adjustments
including stock and supplier adjustments. This amount was due by
the SPV to Jubilee following the expiry of the first warranty
period on 31 December 2015 (90 days after the closing date of 30
September 2015). Payment has however not yet been made. Release of
this escrow amount to the Company has been frustrated by an
unsubstantiated warranty claim submitted by the SPV. The Company
has informed the SPV that it rejects the legitimacy of such a claim
and will take all necessary steps to ensure the release of the
escrow amount due to the Company. We will continue to update
shareholders on progress made.
Contacts
Jubilee Platinum plc
Colin Bird/Leon Coetzer
Tel +44 (0) 20 7584 2155 / Tel +27 (0) 11 465 1913
Andrew Sarosi
Tel +44 (0)1752 221937
JSE Sponsor
Sasfin Capital, a division of Sasfin Bank Limited
Sharon Owens
Tel +27 (0)11 809 7500
Nominated Adviser
SPARK Advisory Partners Limited
Sean Wyndham-Quin/Mark Brady
Tel: +44 (0)203 368 3555
Broker
Beaufort Securities Limited
Jon Belliss
Tel: +44 (0) 20 7382 8300
About ASA
Pollux Investment Holdings Pty Ltd ("Pollux"), a wholly owned
subsidiary of Jubilee, holds the exclusive rights to beneficiate
the platinum group metals ("PGM's") from the platinum-containing
surface material at ASA Metals Proprietary Limited ("ASA") ("DCM
Platinum Project, Processing Agreement").
The Company has targeted the construction of a New Processing
Plant for the recovery of chrome and PGMs capable of processing up
to 35 000 tons of surface material per month. The Company executed
an addendum to the Processing Agreement ("Addendum"), whereby the
Company is incentivised to accelerate the construction and
commissioning of the New Processing Plant by targeting commencement
of commissioning of the front end of the New Processing Plant early
2016. This target has been achieved. The Addendum significantly
enhances and expedites the projected profitability of the project
since both the chrome concentrate and platinum containing
concentrate will now contribute to the overall profitability of the
DCM Platinum Project. The Project is the first of the Company's
Platinum Projects.
About the Hernic Project
Hernic Ferrochrome Proprietary Limited ("Hernic") is the world's
4th largest integrated ferrochrome producer with an estimated 3
million tons of platinum containing material at surface while
Hernic continues to add further material to the surface stock.
The Company was selected as the exclusive party to beneficiate
the chromite and PGMs contained in the Hernic Surface Material
("the Project") and address the project execution methodology as
well as the operational and financial performance targets. The
Project is the second of the Company's Two Projects.
The Hernic Surface Material has been independently fully drilled
and assayed for chrome and PGM content. This has resulted in an
independent resource statement of 1.7 million tons, of which
approximately 90% of the resource is classified in the measured
category under the internationally recognised SAMREC code. Hernic
also has access to secondary surface stocks, which it has
internally identified and could increase the surface stocks to in
excess of 3 million tons through further drilling programmes. The
total Project is estimated to contain PGM ounces in excess of 224
000 (3PGM + Au) oz.
The Project will be the largest PGM beneficiation plant of
surface chrome tailings in South Africa and is capable of producing
annual revenues of GBP 18.2 million (ZAR 400 million) at an average
metal basket price of USD 906 per (3PGM + Au) oz. The financial and
operational risks of the Project are significantly mitigated since
the material is already at surface and requires neither the cost
nor the risk associated with mining.
An extensive prefeasibility study has been concluded on the
Project, which included both pilot scale and full commercial scale
trials to confirm the design and operational parameters.
The Project is to be undertaken in four phases over an 11 month
period; namely
1. Phase one - Bankable Feasibility Study and Engineering Design. -- Completed.
2. Phase two - Construction of the chrome and platinum
processing plant ("Processing Plant"). --
On-going
3. Phase three - Commissioning and Ramp up of Processing Plant
to design capacity of 55 000 tons per month.
4. Phase Four - Stable operation of the Processing Plant.
The Company has targeted a combined processing of platinum
containing surface material over the two projects in excess of 900
000 tons per annum.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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