Jubilee Metals Group plc (LON:JLP) Chief Executive Officer Leon Coetzer caught up with DirectorsTalk for an exclusive interview to discuss accelerating copper production, issuance of shares and when we can expect the step-up in production.
Q1: Leon, could you give us more context into this high-grade copper material and why this is important now for Jubilee Metals?
A1: We’ve faced quite a challenging period in Zambia during December and January, where our team had to react to several challenges being posed at a time when we had just completed the capitalisation, upgrade, commissioning, and successful ramp-up of our Roan operations.
So, we were set to really deliver on what we had promised our investors, only for that to be ripped from under our feet when the country suffered from a severe power crisis and outages, which forced us to bring to a standstill our operations while we addressed the power situation.
We came out the other side, fortunately, quite stronger with a new power agreement, which is no longer reliant on a single source of supply but a distributed supply. And since roughly about the 20th of January, we’ve been receiving constant, consistent power. So, that crisis was addressed and diverted.
We also, as a group, then came together to see how we recover from this lost production at a time when we had fully ramped up our operation and we are very fortunate that we’ve been able to secure significant quantities of very high-grade feed material that we can process through this facility, because this facility has the capability of doing both high-grade feed run-of-mine material as well as waste. It afforded us the opportunity to secure this material and process it through simultaneously to claw back time lost, claw back some of the copper units we had lost during this time, because that step-up in our copper production is so eagerly sought and looked for by our investors. It’s a marker that we’ve been chasing down quite hard.
Q2: Now, the issuance of shares, even though it’s a small amount to support the transaction, comes as a surprise. What motivated the decision?
A2: Of course, share issuance is always a very sensitive topic and something the board takes extremely seriously. What really drove this particular decision was the opportunity set, the opportunity set that not only are we able to buy this high-grade material from our cash reserves to get going at Roan and start clawing back, but at the same time to be able to secure the exclusive right to the full quantity of this vast amount of high-grade material that’s come onto the market.
That’s why we took the decision to support the cash investment with a small equity commitment to the owners of this material.
If you just look at the maths, we’re making roughly a £2 million investment through our equity to secure nearly $30 million contained copper value into our operations with the option of running our operations over an extended period on this higher grade. Yes, it’s a frustration, it’s a small amount of equity, but still, it is equity.
The returns it offers to our company, to our investors, are so significant that it’s an opportunity we simply could not miss.
Q3: How soon do you expect this transaction to translate into increased copper production?
A3: We’re pushing really hard. As we say in the announcement, all systems go. We fully expect by coming Monday to already be on this new material and it to start impacting our copper production profile.
We’ll be very eager to bring that out to the market to actually confirm to the market the amount of copper and the step-up of copper production. This means for our company and how much of the lost time we are now able to recoup through increased copper production.
So, absolutely expecting that to come through in the coming week.
