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LONDON (Alliance News) - Jubilee Platinum PLC Wednesday reported its results for the last financial year, which was a period of transition for the company as it restructured its portfolio to focus on being a platinum producer.
The miner's main focus was on the Middelburg operations in South Africa, which comprised of a smelting operation and a power plant. Those operations generated almost all of the company's revenue and earnings but the company sold them after the financial year ended so it could focus on becoming a platinum producer.
Jubilee therefore separated its financial accounts for the year ended June 30 into current continuing operations and the Middelburg operations.
From current continuing operations, the platinum miner reported a GBP2.9 million pretax loss in the year ended June 30, narrowing from the GBP3.6 million loss a year as it cut its operating expenses to GBP2.8 million from GBP3.5 million. In absence of the Middelburg operations, the company generated very little in revenue in the year.
The Middelburg operations generated GBP5.2 million in revenue in the same period, which was up from GBP4.0 million a year earlier, leading the gross profit to rise to GBP3.0 million from GBP1.7 million. That narrowed the net loss before tax to GBP452,002 in the year from the GBP1.9 million loss a year earlier.
Jubilee sold the Middelburg operations on the first day of October to Siyanda Resources Proprietary Ltd for a total of ZAR110.5 million, around GBP5.3 million.
Jubilee conducted an expansion and optimisation programme at Middelburg during the financial year, which led to that improved performance. The operations then began to draw interest from suitors, leading to the sale so Jubilee could focus on becoming a platinum producer.
Although it has sold its sole revenue-generating operation, it believes using the proceeds from the sale to develop its platinum projects will yield better results in the long term.
"The income from the disposal will largely be invested in the construction and commissioning of the platinum surface projects, which offer the potential of a multiple increase in income when compared to the income potential of the Middelburg operations," it said.
Following the sale, Jubilee is left with a development portfolio of projects.
Its immediate focus is on platinum surface projects, which it hopes can deliver near term production to get its revenue running in the absence of the Middelburg operations. The main benefit of these types of projects is that platinum group metals lie at surface, meaning it is easy, quick and cheap to process and produce compared to an underground operations.
"These highly sought-after platinum surface beneficiation projects, come with little of the associated risk or cost of mining since all the material is at surface and their mineral content can easily be defined with a high degree of confidence. The company has been able to demonstrate its industry-leading processing ability in this field, which has assisted the company in securing the assets and allowing it to outpace its competitors," said the company.
Its first platinum surface project will be the wholly-owned Dilokong chrome mine surface tailings project in South Africa, which is thought to have around 950,000 tonnes of platinum/chrome containing material.
Jubilee gained access to the tailings at Dilokong in the year from the owner of the Dilokong mine, which will see Jubilee build a processing plant to process those tailings. That construction has already started and the company is hoping to commission the front end of the processing plant in the end of January 2016, with the chrome aspect of the plant being commissioned later in 2016.
Jubilee also has an agreement in place with the world's fourth largest ferrochrome producer Hernic, whereby Jubilee will build another plant to process Hernic's tailings in South Africa in a similar operation. The pair plans to sign a plant engineering and design agreement as well as a co-operation agreement which will lead to the construction of the plant.
In the long term Jubilee wants to develop its flagship Tjate platinum project in South Africa, where it is waiting to be formally awarded the mining right from authorities.
"In summary, the mining world remains complex and difficult for all concerned irrespective of their size and mission. As always this board refuses to be intimidated by matters outside their control and remain focused on building a significant platinum producing business," said Chairman Colin Bird.
Jubilee shares were up 4.8% to 3.59 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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