(Alliance News) - Jubilee Metals Group PLC on Friday said it will raise GBP10 million to fund its Green Copper project in Zambia.
The London-based metal processing company with projects in South Africa and Zambia said it will offer the shares at a price of 5.5 pence each. Jubilee was down 14% to 5.88p in London on Friday morning. It has GBP161.0 million market capitalisation.
This comes after Jubilee announced earlier this week that it had secured one of the largest copper waste rock assets in Zambia and had formed a strategic partnership that will invest in this "significant" dump. It estimated the waste rock material on surface at more than 350 million tonnes.
Overall project costs, including mining equipment and project infrastructure, are likely to be around USD50 million, Jubilee said.
The metal processing firm also said on Tuesday that it had signed a binding funding term sheet with Abu Dhabi-based International Resources Holding RSC to form a dedicated special purpose vehicle through which both the acquisition of the copper waste rock asset and implementation of the processing solution will be funded.
International Resources is affiliated to the Abu Dhabi conglomerate, International Holding Co PJSC.
Jubilee said it will hold a minimum of 30% funded position of the special purpose vehicle and manage its operations.
The price for the acquisition of the waste rock dump was GBP30 million, which is to be paid in instalments over a period of 18 months, and project costs are anticipated to be USD50 million.
The capital raise specifically focusses on the Green Copper project, Jubilee said on Friday, but also will help maintain the investment into the expansion of its existing copper and chrome operations in South Africa.
Proceeds will be used to pay the initial GBP1.8 million due for the acquisition of the copper waste rock dump, to expand the sulphide recovery circuits at its Sable refinery, and to progress the project development phase of the Mufulira slag project.
Chief Executive Officer Leon Coetzer said: "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.
"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."
Jubilee shares were untraded in Johannesburg on Friday, closing on Thursday at ZAR1.60.
By Sabrina Penty, Alliance News reporter
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Jubilee Metals (JLP)