RE: Investors Chronicle14 Jun 2021 09:39
Full article;
Jubilee Metals (JLP: 19.6p), an Aim-traded mining company that makes it’s money by extracting platinum group metals (PGMs) and copper from mine tailings in South Africa and Zambia, has secured a significant amount of PGM containing surface material and expanded its operational footprint beyond the Western Limb of the Bushweld Complex.
In quick succession, the company has entered into two long-term PGM feed supply agreements on the Eastern-Limb of the Bushweld Complex that will deliver an additional 46,500 tonnes per month of PGM rich feed, equivalent to the production of 33,700 PGM ounces (oz) per year. The consideration is linked to the prevailing PGM basket price and is payable monthly in advance of uplifting the material and transporting it to Jubilee's Inyoni PGM plant.
A sizeable amount of the feed is based on the LG6 chrome reef, an area that is particularly high in rhodium content (12 per cent of produced PGM ounce). The price of rhodium, a mining by-product used as a catalyst in three-way catalytic converters in cars, has been on a tear in the past year, quadrupling in value, driven by demand from car makers. The market is forecast to be in a 60,000 ounces deficit this year, or 5 per cent of estimated market demand (source: Johnson Matthey).
In addition, Jubilee has acquired outright a further 255,000 tonnes of PGM containing chrome tailings, equivalent to the production of 12,300 PGM ounces. The material will be initially processed at Jubilee's expanded Inyoni PGM facility and ensures that the expanded capacity is fully committed, with current arising tailings prior to the plant’s expansion. The directors confirmed that the company is on target to deliver record production of more than 50,000 PGM ounces this year.
They also confirmed that commissioning of Jubilee’s new 80,000 tonnes per month chrome ore processing facility near its Inyoni operations is expected by the end of July. This will increase overall processing capacity to 250,000 tonnes per month. The company has already entered a third-party Run-Of-Mine chrome ore offtake agreement with Samancor which will fully commit both Jubilee’s Windsor chrome beneficiation plant as well as the future capacity of the new 80,000 tonnes per month chrome facility for the next three years, with an option of an extension, thus supplementing its secured surface chrome tailings stockpiles. The chrome will be supplied to Samancor on a fixed margin contract.
Importantly, Jubilee now controls the source feed to its fine chrome and PGM circuits, which ensures stability of operations and means that it can capture 100 per cent of the value. Effectively, the chrome production is paying to pre-concentrate the PGM circuit feed. It’s low risk production, too. That’s because the material treated by Jubilee is at surface and usually pre-ground, thus reducing the two major costs in a typical mining operation (mining and comminution) and eliminating the risks of mining almost entir
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