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Jubilee Metals Group Q&A: Expecting growth in earnings in H2 2020 (LON:JLP)

Jubilee Metals Group plc (LON:JLP) Chief Executive Officer Leon Coetzer caught up with DirectorsTalk for an exclusive interview to discuss the highlights from their operational update, production at the Sable refinery, achieving 25,000 tonnes of copper per annum and the outlook for the company in the coming months.

Q1: Leon, you’ve published your six month operational update earlier, it looks like a great set of results that can only described as a tricky time for most. In your opinion, what were the key highlights?

A1: Very much so. It’s a challenging period as I’m sure it is for most companies at the moment dealing with constantly changing regulations to trying to ensure the safety of our people.

The key highlight for us that really stand out is the manner in which Jubilee Metals Group has been able to respond to these challenges, again it bears testament to that fact that we run surface operations, automatic operations that are able to be adjusted to rapidly ramp up  post having to have stopped for the implementation of the COVID regulations. 

Again, it testifies to a strategy of being a surface operator, being able to access our materials already at surface as a business.

Q2: You mentioned in the update that production had commenced at the Sable refinery, currently on a production rate of around 100 tonnes of copper cathode which you plan to ramp up during the next quarter. Is that replacing the zinc production?

A2: Basically, the company has reached a point where we have two maturing strategies.

On the one side we have South Africa through our platinum, palladium, chrome business which has really delivered the majority of the earnings we announced in our update, a tremendous growth yet again and expected a further slight expansion into the coming 6 months.

Parallel to that, we have set in Zambia our base metals strategy where we have acquired a copper refinery, as you’ve said we’ve commissioned our copper refine circuit, cathodes being produced and we’re now entering that phase of rapid ramp up. We’re ramping up that refinery on its copper production.

As we’ve said before, we’ve also commenced structure of our zinc circuit but under the COVID-19 regulations, we were forced to put that on hold because of the ability to get technical people, engineers, construction people across borders onto the operation but we’re very eager to recommence that project as soon as possible.

So, certainly, the copper is not replacing zinc, the copper is just able to be expanded far more rapidly than zinc can under the current restrictions.

Q3: Whilst we’re on the subject on ramping up, you’ve set a target to achieve a production rate of 25,000 tonnes of copper per year, just over 2,000 tonnes a month. How viable do you think that is? Can you expand on the steps needed to get to that point?

A3: 25,000 tonnes of copper per annum, we’ve said that as a company, that’s our target that we chose and we’re targeting to reach that in basically three key steps which shareholders and investors will start seeing materialising.

The firs, of course, was the acquisition of our refinery, decapitalisation, implementation of the copper refining circuit in the refinery and bringing that into operation.

The next step was to secure short term copper supplies and that really is majority coming from our own tails that we own as well as third party miners that bring copper ore that’s in the region of our refinery.

The biggest step and the drive towards reaching that 25,000 tonnes of copper per annum is of course the type of transactions that we announced about 2 weeks ago where we acquired the rights to very large surface assets. We’re speaking of 150 million tonnes of surface material containing copper and that’s not the only transaction we’re targeting of that size and it’s these staged acquisitions that we drive to implement to feed and drive us towards that 25,000 tonnes of copper per annum.

It’s very much achievable and a very clear target set by ourselves.

Q4: Just going back to the highlights, double digit growth yet again, how do you view the outlook for Jubilee Metals Group?

A4: At the moment, I think that the next 6 months, assuming under the current threat of COVID-19 epidemic that we replicate the first 6 months, we can expect a growth in earnings simply by being able to run our facilities as we are, at 100% of its capacity.

So, purely based on our platinum, palladium, chrome and rhodium income in South Africa, one can expect an earnings growth from that side of the operations but equally, and very excitingly, in the coming 6 months we’re looking forward to bringing the copper into our earnings. The copper is as yet not included in the first 6 months so certainly looking forward to seeing the copper come through in the next 6 months of our earnings.

So, we’re looking forward to a very strong performance from our company in the coming months.

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