Jubilee Metals Regulatory News (JLP)

Jubilee Metals Group PLC

Registration number (4459850)

AltX share code: JBL

AIM share code: JLP

ISIN: GB0031852162

("Jubilee" or "the Company")

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).

Jubilee secures funding to execute Kabwe Project

Acquisition of Sable Zinc Refinery

Jubilee is pleased to announce that it has executed a share purchase agreement for the acquisition of the Sable Zinc refinery in Kabwe Zambia. The refinery is situated immediately adjacent to the large stock piles of zinc, lead and vanadium that Jubilee has contracted from BMR Group PLC.

In making this agreement the Board is also pleased to announce that they have secured a combination of debt and equity financing to fully complete the transaction and deliver the Company's Kabwe project.

Highlights

· Consideration for the Sable Zinc refinery is GBP 9.16 million (US$12 million) in stage payments

· The Acquisition reduces the time to build the refinery by some 18 months delivering the first metal within a year from the Acquisition

· Overall project capital to produce first metal is significantly reduced to some GBP18.32 million (US$ 24 million)

· The project will ramp up over a two-year period from 20 tonnes to 40 tonnes per hour producing significant amounts of zinc, vanadium and lead

· Jubilee is financing the Acquisition and ramp up by an equity raising of GBP11.07 million (US$14.5 million) and a secured convertible loan note of GBP6.11 million (US$8 million)

· The Kabwe project is expected to significantly enhance Company earnings on the back of three revenue producing metals

Leon Coetzer, Chief Executive Officer, says:

"I am delighted that, after months of test work, flowsheet design and refinery acquisition negotiations, we can announce the full implementation plan for the Kabwe base metal project. My team and I are looking forward to managing an implementation programme to deliver to our shareholders this outstanding project on time and in budget.

I am particularly pleased that we have been able to secure the support of large institutional funders in the equity placing which, is testimony to Jubilee's Metals Recovery strategy and the quality of the Kabwe project"

Sable Zinc Kabwe Project ("Project")

The combined secured funding fully funds the Acquisition as well as the project capital required to implement the Project to produce zinc, vanadium and lead from the surface material at Kabwe. The Project targets an initial processing rate of 20 tonnes per hour producing a zinc concentrate and vanadium pentoxide before ramping up to a targeted 40 tonnes per hour producing zinc metal, vanadium pentoxide and a lead concentrate. The Project targets to produce annually over 8 000 tonnes of zinc, 1 500 tonnes of vanadium and 15 000 tonnes of lead as it ramps up to full capacity over a 2-year period.

Jubilee has already secured Zambian ministerial approval for the transaction. The Minister also waived previous conditions placed on the Kabwe mining licences.

Sable Zinc Acquisition

Jubilee executed the acquisition of Sable Zinc Kabwe Limited in Zambia from two subsidiaries of Glencore plc "Glencore" for a consideration of GBP9.16 million (US$12 million) (ZAR 175.97 million) (the "Acquisition").

The Acquisition is funded through a combination of debt and equity. Jubilee secured a convertible loan note for GBP6.11 million (US$8 million) (ZAR 117.31 million) with ACAM LP and successfully completed a placing of 491,814,444 new Jubilee shares at an issue price of 2.25 pence per share to raise GBP11.07 million (US$14.50 million) (ZAR 212.57 million) before expenses.

The consideration for the Acquisition is payable in stages as follows:

· US$6,000,000 within 5 business days after fulfilment or waiver of the conditions precedent to the share purchase agreement ("Closing Date");

· US$3,000,000 on the earlier of the date falling 30 days after the date of completion of the conversion of the Sable Zinc Kabwe plant to a zinc processing plant and the date falling 6 months after the Closing Date ("Second Instalment"); and

· US$3,000,000 on the earlier of the date falling 30 days after the date of commencement of commercial production and the date falling 6 months after the Second Instalment.

The Acquisition is conditional upon the fulfilment of the following conditions precedent as contained in the agreement:

· Approval and/or clearance of the transaction under the Zambian Competition Act; and

· Conclusion of an acid supply agreement for the sale of acid produced at the plant by Sable Zinc Kabwe to Glencore until such time as such acid is required for the operations of Sable Zinc Kabwe in the production of saleable products.

Project loan

Jubilee also, through its wholly owned subsidiary Braemore Holdings (Mauritius) Pty Ltd, successfully secured debt funding of GBP6.11 million (US$8 million) from ACAM LP ("ACAM"), ACAM is an affiliate of two sophisticated investors based in London and New York. The funding is secured over Jubilee's Zambian assets, bears interest at 12 per cent per annum and is repayable in full 36 months from the date of execution of the funding agreement. 

At any time that the loan is outstanding, ACAM may at its absolute discretion, by conversion notice, elect to convert the loan and all accrued but unpaid interest into 5 per cent unsecured convertible loan notes with a conversion price of 2.81 pence (ZAR 53.98 cents) ("Subscription Price") and a maturity date which falls on the third anniversary of the Closing Date.

During the loan period, Jubilee may notify ACAM of its intention to prepay the whole of the loan balance by prepayment notice. On the date of any prepayment Jubilee will issue warrants to ACAM to a value equal to 50 per cent of the amount of the loan and all accrued but unpaid interest thereon divided by the Subscription Price.

Jubilee and ACAM have agreed to work together, without obligation from either party, to explore funding solutions for future expansion projects outside of South Africa as opportunities arise.

Equity Placing

The Company has successfully completed a placing of 491,814,444 new ordinary shares of 1 pence each ("Ordinary Shares") in Jubilee (the "Placing Shares") at a price of 2.25 pence (ZAR 43.22 cents) per share to raise approximately GBP 11.07 million (ZAR 212.57 million at current exchange rates) before expenses.

The placing includes the issuance of 1,473,055 warrants priced at a premium of 50 per cent of the placing price or 3.38 pence (ZAR 64.83 cents) per warrant share valid for a period of 2 years.

The Placing Shares have been issued, conditional on Admission (as defined below), as fully paid and rank pari passu in all respects with the existing ordinary shares, including the right to receive all dividends and other distributions declared on or after the date on which they are issued. Application will be made for the Placing Shares to be admitted to trading on AIM and to be listed on the AltX of the JSE Limited, which is expected to take place on or about 28 March 2019 ("Admission").

Following Admission, the Company's total issued share capital will comprise 1,855,300,673 Ordinary Shares. As the Company does not hold any Ordinary Shares in treasury, this figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company following Admission.

The combined Loan and Placing ensures that the Kabwe project is fully funded to reach its operational targets. The funding was successfully secured in partnership with the Company's lead arranger RiverFort Global Capital Ltd and its corporate broker Shard Capital Partners LLP with assistance from WH Ireland.

United Kingdom

21 March 2019

Contacts

Jubilee Metals Group PLC

Colin Bird/Leon CoetzerTel: +44 (0) 20 7584 2155 / Tel: +27 (0) 11 465 1913 

Corporate Adviser

RiverFort Global Capital Ltd

Brian Kinane

Tel: +44 (0) 753 496 7789

Corporate Broker

Shard Capital Partners LLPDamon Heath/Erik WoolgarTel: +44 (0) 20 7 186 9900

Nominated Adviser

SPARK Advisory Partners LimitedAndrew Emmott/Vassil KirtchevTel: +44 (0) 203 368 3555

JSE Sponsor

Sasfin Capital (a member of the Sasfin group)

Sharon OwensTel +27 (0) 11 809 7500