Jubilee Metals Group Q&A: A far stronger sustainable business (LON:JLP)

Sable Refinery in Zambia

Jubilee Metals Group plc (LON:JLP) Chief Executive Officer Leon Coetzer caught up with DirectorsTalk for an exclusive interview to discuss their latest operational update, key drivers behind growth and what investors and shareholders should expect to see in the coming months.

Q1: Jubilee Metals Group have provided an operational update for the first three months of H2 2020. Leon, how has the company been affected during the COVID lockdown regulations & are there any continuing impacts?

A1: During the severe lockdown during the months of April and May, our operations were impacted, of course. We went through an initial shutdown, complete shutdown to allow us to implement the various safety measures, test protocols, social distancing measures and operations. Following that we were allowed to start up in staged format to ultimately reach back to 100% our capacities. The operation that probably remained shut for the longest was our Windsor PGM project which we run in partnership with Northam Platinum & that was done for approximately a six-week period before we gradually brought that back on stream.

As of June this year, we were running full steam at all of our operations & I think that’s why we felt it would be an important quarter update. We typically only do a six monthly update but bring out a quarter update to actually allow our shareholders and investors just to see the performance level of the company when running all of its operations at full capacity for a full three-month period.

Q2: Just talking about the performance, the results achieved over this period seem brilliant. What have been the key drivers behind this growth on what we can only say is it already a strong first half for the group?

A2: It certainly was an exceptional three-month performance. The key drivers behind them, of course, was that all of our South African operations are now fully commissioned, fully operational, and it reflects a full quarter of all of these operations running.

Of course, the other big difference in our business is the introduction of our new third party ore processing agreements where we’re buying third party ore, we recover the chrome concentrates from these ores and then recover the PGM. So, these PGM feeds supplement our already large surface resources we own for our PGM operations so what you see coming through is high quality PGM feed into our operations and supported by very strong chrome efficiency performances.

We’ve pumped a lot of capital into our chrome operations to set very high standards for the industry on chrome recoveries, in fact, our chrome recoveries are respected throughout the industry for what we are achieving. That allows us to also, as the results reflect, bring our chrome operations into a stronger margin on the back of our recoveries while our PGM operations benefit from higher quality and higher quantity of PGM feed & that then comes through.

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Of course, we also have seen a very strong PGM market where the platinum, palladium prices have been really strong through this period & that of course always supports a company like us. Equally, our chrome operations have had a strong performance even though the chrome prices remain depressed during this period, you’ll see that our margin on our chrome operations has increased and eked out a far stronger sustainable business on the back of our performance.

Q3: Now,  I know you’ve produced regular operational updates but what should investors or potential investors expect to see in terms of news flow over the coming months from Jubilee Metals Group?

A3: Well, of course, the immediate next release which is due is our annual results for the period June ‘19 to June ’20, those annual results we’ll be releasing over the next coming days & definitely, certainly, before the end of October to reflect the past 12 months performance.

We’ve released a six-monthly update during that period so it shows how good those results will be & I think the significance of this quarter results we brought out was to show that even though, as you said, our previous six months operational update was so strong, this quarter from a financial perspective has already exceeded that six months operational update.

The other side that the shareholders can keenly look towards updates is of course our copper business in Zambia, we are capitalising that business at a very rapid rate, our teams are fully on the ground post-COVID, we are allowed to travel, the borders have opened up slightly to allow teams to travel more freely in and out of Zambia from South Africa.

Of course, our project Roan and project Elephant are the two key projects there that we are driving exceptionally hard. We were very happy with the progress made at our Sable refinery where the upfront part of our refinery, which is the part that accepts the new concentrates coming in, cleans those concentrates before it goes into the refinery, that circuit is complete. The project Roan side, which is the first of our copper projects coming on stream has made tremendous progress.

So, our shareholders can certainly look to see how the copper side of our business now starts performing to start equalling the performance from our South African PGM operations.

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