TIDMJLP
RNS Number : 9824V
Jubilee Metals Group PLC
13 August 2020
Jubilee Metals Group PLC
Registration number (4459850)
Altx share code: JBL
AIM share code: JLP
ISIN: GB0031852162
("Jubilee" or "the Company" or "the Group")
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR). Not for
release, publication or distribution in whole or in part in, into
or from any jurisdiction where to do so would constitute a
violation of the relevant laws or regulations of such
jurisdiction.
Jubilee's Chrome Processing Capacity at Windsor Fully Committed
and
Acquisition of Rights to new Chrome Processing Facility
Jubilee Metals Group ("Jubilee" or the "Company"), the AIM and
Altx traded metals processing company, is pleased to announce that
it has entered into a third party Run-Of-Mine ("ROM") chrome ore
offtake agreement that fully commits its Windsor chrome
beneficiation plant ("Windsor") for the next three years (the
"Offtake Agreement"), with an option for this to be extended
further.
Under the terms of the Offtake Agreement, Jubilee commits to the
production of 40 000 tonnes per month of chrome concentrate or,
subject to the chrome content in the ROM, saleable chrome
concentrate, while also retaining the rights to all discard
material including the contained PGMs.
In addition, Jubilee has also successfully entered into a joint
venture agreement ("JV Agreement") with a privately held South
African company ("JV Partner") to secure the rights to a further 35
000 tonnes per month chrome processing capacity ("Windsor 8").
Under the JV Agreement Jubilee will assume operational control of
the Windsor 8 facility (the 'Facility") while also committing to
upgrade it by incorporating Jubilee's processing solutions.
Highlights
-- Jubilee secures third party ROM Offtake Agreement for Windsor
targeting the production of 40 000 tonnes per month of chrome
concentrate for the next three years
-- The Offtake Agreement secures supply of quality feed to
Windsor and supports 100% operating capacity for the next three
years, while continuing to further supplement the existing PGM feed
material to Jubilee's PGM plants
-- Jubilee has locked in a chrome sale price for the chrome
production under the Offtake Agreement to secure a firm chrome
earnings margin in addition to the earnings generated by the
recovery of PGMs from the chrome discard
-- Jubilee also executes a JV Agreement to secure Windsor 8,
being the rights to an additional 35 000 tonnes per month chrome
processing capacity at the Facility
-- The Facility is strategically located to provide Jubilee with
more opportunities to secure further third party ROM supply and
associated PGM material
-- Commencement of production at Windsor 8 is targeted by end September 2020
Leon Coetzer, CEO of Jubilee, commented: "Jubilee continues to
aggressively drive its expansion across both its South African and
Zambian operations. Our significant progress in Zambia, as
announced last week, is followed by the successful implementation
of these two key agreements supporting the expansion of our South
African chrome and PGM operations. These agreements have been
secured on the back of Jubilee's track record of continuously
driving to set new industry standards.
"The Offtake Agreement, which supports Windsor's capacity to
produce 40 000 tonnes per month of chrome concentrate, secures not
only a constant feed source for Windsor under a protected
operational margin, but also significantly increases Jubilee's
surface PGM resources from the discard of the chrome operations.
The successful completion of the Offtake Agreement is credit to the
Jubilee team's ability to consistently achieve exceptional chrome
recovery efficiencies well above the norm in the industry.
"With Windsor fully committed to working at full capacity,
Jubilee has also successfully secured Windsor 8 under a JV
Agreement, being the rights to a further 35 000 tonnes per month of
chrome processing capacity. The new Facility and JV partner were
carefully selected to establish a presence in a strategic location
which will provide Jubilee with further opportunities to increase
our chrome ore supply. "
Key Terms of the Agreements
Under the terms of the Offtake Agreement, Windsor will receive a
minimum guaranteed ROM supply targeting the production of 40 000
tonnes per month of chrome concentrate, linking to the chrome
content of the ROM. The Offtake Agreement secures both a committed
feed of material to Windsor as well as the continued production of
upgraded PGM discard material for further processing at Jubilee's
PGM recovery plants.
On the back of this Offtake Agreement Jubilee has also
successfully entered into the Joint Venture Agreement with its JV
Partner to secure the rights to a further 35 000 tonnes per month
chrome processing capacity (being Windsor 8). Under the JV
Agreement Jubilee will assume operational control of the Facility
while also committing to upgrade the Facility by incorporating
Jubilee's processing solutions. The Facility is strategically
located to expand Jubilee's reach providing it with more
opportunities to secure further third party chrome material
supplies.
Jubilee has locked in the forward sale price of the produced
chrome concentrate at its Windsor operation to hedge the Company
against a volatile chrome price driven mainly by uncertainty in the
current supply and demand fundamentals of the metal. The fixed
forward sale price secures a firm earnings margin for Windsor while
allowing Windsor 8 to take advantage of any short-term price
fluctuations. The earnings margin of Windsor is strongly influenced
by the efficiencies achieved by Windsor and excludes the added
benefit of the recovered PGM ounces from the discard. Windsor is
budgeted to operate at a chrome alone margin ranging between a
minimum of 14% to a maximum of 25% per tonne of chrome concentrate
with the additional PGM margin secured for Jubilee's PGM
operations.
Under the terms of the JV Agreement, Jubilee and its JV Partner
formed an unincorporated joint venture ("Joint Venture") with
Jubilee holding the rights to 70% of all earnings generated by the
Joint Venture. Jubilee may at any time during the next five years
elect to incorporate the Joint Venture under a new subsidiary. All
capital plus interest invested into the Joint Venture by Jubilee
shall first be repaid prior to any distribution of earnings from
the Joint Venture. Jubilee has committed to invest an estimated ZAR
10 million (GBP 440 000) towards the upgrade of Windsor 8. Jubilee
is further appointed as the manager of the Joint Venture and the
operator of Windsor 8, currently owned by the JV Partner. Windsor 8
benefits from the shared services offered by Windsor to dilute its
overhead and position itself as one of the lowest cost, third party
chrome beneficiation facilities. The PGM containing discard from
Windsor 8 will be acquired by Jubilee under an existing agreement
with the JV Partner.
United Kingdom
13 August 2020
**ENDS**
For further information visit www.jubileemetalsgroup.com or contact:
Jubilee Metals Group PLC
Colin Bird/Leon Coetzer
Tel +44 (0) 20 7584 2155 / Tel +27 (0) 11 465 1913
Nominated Adviser - SPARK Advisory Partners Limited
Andrew Emmott/James Keeshan
Tel: +44 (0) 20 3368 3555
Broker - Shard Capital Partners LLP
Damon Heath/Erik Woolgar
Tel +44 (0) 20 7186 9900
Joint Broker - WHIreland
Harry Ansell/Katy Mitchell
Tel: +44 (0) 20 7220 1670/+44 (0) 113 394 6618
JSE Sponsor - Sasfin Capital (a member of the Sasfin group)
Sharon Owens
Tel +27 (0) 11 809 7500
PR & IR Adviser - St Brides Partners Limited
Catherine Leftley/Beth Melluish
Tel +44 (0) 20 7236 1177
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END
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