Jubilee Metals Group PLC (LON:JLP), a leader in metals processing with operations in Africa, has today announced significant further progress at its Copper and Cobalt tailings projects in Zambia with the successful execution of three strategic transactions which significantly increases Jubilee’s beneficial interest across the Company’s copper and cobalt tailings projects in Zambia. The Transactions include Project Elephant (Kitwe Tailings Project), Project Roan (Ndola Tailings Project) and the Mufulira Project. Completion of the Transactions is subject to fulfilment of certain conditions precedent that are normal for transactions of this nature including regulatory approvals and consent.
At completion of the Transactions, Jubilee will hold a 100% interest across its integrated Southern Refining strategy which includes the Sable copper and cobalt refinery (14 000 tonnes per annum copper capacity) together with Project Roan (10 000 tonnes per annum copper concentrator). In addition, Jubilee increases its beneficial interest across its Northern Refining Strategy, with Project Elephant’s TD52 portion to 80.75% (highest copper and cobalt concentration of all tailings within Project elephant) which is specifically targeted by the accelerated development of Jubilee’s cobalt extraction process, Jubilee’s beneficial interest at the Mufulira Project increasing to 97%.
Combined, the Transactions have an aggregate value of c. US$ 24.77 million (c. £ 17.83 million) and offers Jubilee the flexibility to better schedule the development of the various tailings projects. As such Jubilee will increase its investment into the Southern Refining Strategy by expanding Sable Refinery to increase the copper sulphide recovery circuit as well as expanding the cobalt recovery circuit.
Accordingly, the Company is seeking to raise gross proceeds of c. £ 30 million (c. US$ 41.8 million) by way of a conditional placing of new ordinary shares at a price of 16.03 pence per share, which will be applied to satisfy the consideration in respect of the Transactions and towards the expansion of Sable Refinery while accelerating the capitalisation and progress of Project Lechwe and Project Elephant.
- Jubilee has successfully executed agreements for the Transactions with its partners on the respective projects to further increase its beneficial interest in these copper and cobalt tailings assets in Zambia
- Jubilee’s beneficial interest in Project Roan has been increased to 100% (previously 80%), three months prior to the expected commissioning of the targeted 10 000 tonnes per annum copper project during November 2021. This increases Jubilee’s interest across the integrated Southern Refining Project to 100%
- Jubilee’s beneficial interest in the copper and cobalt rich TD52 as part of the larger 114 million tonnes Project Elephant, is increased to 80.75% (previously 57.75%)
- Follows very encouraging cobalt recovery results from Jubilee’s development centre
- Includes the final payment under the existing joint venture agreement, solidifying Jubilee’s controlling interest
- Jubilee’s beneficial interest in the Mufulira Tailings Project is increased to 97%. The Mufulira Project, which is expected to hold similar characteristics to Project Elephant, is strategically located near the processing facilities targeted for Project Elephant
- As a result of the Transactions, Jubilee now has greater control over the development of its tailings projects in Zambia and therefore the sequence and rate of development of both its Northern and Southern refinery strategies
- Placing proceeds in part allocated to the expansion of Sable Refinery to increase the copper sulphide recovery circuit previously limited under the Project Roan joint venture agreement as well as expanding the cobalt recovery circuit as part of the process development and testing for the cobalt solution at Project Elephant, while continuing to accelerate the capitalisation and progress of Project Lechwe and Project Elephant
Leon Coetzer, CEO of Jubilee Metals Group, commented:
“I am delighted to have secured these Transactions which each individually are strongly value accretive and add tremendous value to Jubilee’s expanding copper and cobalt portfolio in Zambia.
“Our Southern Refining Strategy is now fully owned by Jubilee capturing 100% of the earnings potential and allowing us the complete flexibility to better integrate Project Roan with the refining capability at Sable Refinery. We are now able to increase the copper sulphide section of our refinery to fully absorb this portion of Project Roan’s production that previously was allocated to be sold as a high grade concentrate under the terms of the joint venture while only the copper oxide was targeted to be fully refined to copper cathode. In short succession of our recent addition of a refining presence in the North, we will also expand our cobalt refining capability as part of the development of the cobalt solution for Project Elephant offering significant potential for our Northern Refining project.
“In addition, the Transactions enable Jubilee to secure a stronger ownership position and flexibility to better sequence the integrated Northern Refining projects in order to unlock value in an efficient and value accretive manner.
“The transaction at Project Elephant targets the richest tailings dam, TD52 at Elephant, where Jubilee’s process development centre has confirmed very promising results from the cobalt recovery with potential to significantly increase the overall project economics. The third transaction increases Jubilee’s beneficial interest to 97% at the Mufulira Project.
“The funds raised in the conditional Placing will also support Jubilee’s continued capital investment, including the completion of Project Roan, while at the same time accelerating the capitalisation of Project Lechwe and Project Elephant.”
Rationale and further details of the Transactions
As previously announced, during 2020 Jubilee entered into various joint venture agreements to secure rights to process over 300 million tonnes of copper and cobalt containing tailings in Zambia. The copper and cobalt tailings are located in three central locations in Zambia. With the addition of the refinery at Mopani, announced on 24 August 2021, the Group’s project naming convention was updated as follows:
- Southern Refinery Strategy (14 000 tonnes per annum capacity) which incorporates the Sable Refinery together with Project Roan located in the Ndola area; and
- Northern Refinery Strategy (17 000 tonnes per annum capacity) which incorporates the newly targeted refinery at Mopani, called Leopard together with the copper tailings project in the Luanshya area, called Project Lechwe (previously Elephant 1), as well as the copper and cobalt tailings in the Kitwe area called Project Elephant (previously called Elephant 2). Jubilee has secured additional copper and cobalt tailings at Mufulira which is currently being sampled to confirm the quantity and quality and will form part of the Project Elephant resource.
The Transactions successfully entered into by Jubilee’s 100% subsidiary Braemore Platinum Limited (“Braemore”) increase Jubilee’s beneficial interests in the Southern Refinery Strategy to 100% and consolidate the Group’s controlling position in the Northern Refinery Strategy. In addition to an increased interest in the earnings of these projects, Jubilee will have full operational control over both its Northern and Southern Refinery Strategies and will be able to set the sequence and rate of development of the various projects and refineries now under its control.
Project Roan (Southern Refinery Strategy) is rapidly nearing completion targeting to commence commissioning activities from November this year. The transaction relating to Project Roan will increase Jubilee’s beneficial interest from 80% to 100%. The Project Roan transaction further includes additional rights to an estimated further 6.6 million tonnes of copper tailings near the processing facility (the “Tailings”) while holding the option to convert the lease agreement of the property where the processing facility is located to direct ownership of the property (the “Property”). The Project Roan transaction is valued up to US$ 15.5 million (£ 11.2 million). As previously announced, Project Roan’s processing facility is well under way which targets a ramp-up over three phases to reach full production to a rate of approximately 10 000 tonnes of equivalent copper units per annum with commissioning activities scheduled to commence in November 2021, targeting full production by end of Q1 2022. Roan commenced with the delivery of early concentrate as part of its phase 1 commissioning to the Sable Refinery in April of this year.
At Project Elephant (Northern Refinery Strategy), which is located in the Kitwe area and targets the production of 10 200 copper units per annum, Jubilee’s subsidiary Braemore will acquire a further 23% beneficial interest in the TD52 tailings dam portion of the overall project, increasing Jubilee’s interest to 80.75% as well as the early settlement of all remaining payments as part of the original joint venture agreement for Project Elephant for a consideration value of US$ 8.25 million (£ 5.9 million) which includes a US$ 1.3 million (£ 0.94 million) interest bearing project loan ceded to Braemore. TD52 holds the highest contained copper and cobalt within the larger Project Elephant’s 114 million tonnes tailings resource at 0.7% Copper and 0.08% Cobalt. Jubilee’s process development centre has confirmed very promising results from the cobalt recovery strategy which holds the potential to significantly increase the overall project economics.
As a result of the third transaction, Braemore’s interest in the Mufulira Project will increase to 97% beneficial interest in the project for a consideration of US$ 1.02 million (£ 0.74 million). The Mufulira Project material which is expected to hold similar characteristics to Project Elephant, is conveniently located near the processing facilities targeted for Project Elephant.
The Placing is being conducted, subject to the satisfaction of certain conditions set out in the Appendix to this Announcement, through an accelerated book-build process (the “Bookbuild” or the “ABB”), which will be launched immediately following this Announcement. The number of Placing Shares to be issued in connection with the Placing will be determined by the Broker, in consultation with the Company, at the close of the ABB process, and the results of the Placing will be announced as soon as practicable thereafter.
The Placing is not being underwritten and the Placing Shares are not being made available to the public.
The Company is carrying out the Placing to raise c. £ 30 million, before expenses, by way of a conditional placing of new ordinary shares at an issue price of 16.03 pence per share.
The Placing Shares, assuming full take-up, will represent approximately 7.7 % of the Enlarged Issued Share Capital.
WH Ireland Limited is acting as sole broker and placing agent to the Company and has agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price with new and existing investors. The Appendix to this Announcement (which forms part of this Announcement) contains the detailed terms and conditions of the Placing.
In connection with the Placing, the Company has entered into the Placing Agreement with the Broker which contains certain customary warranties given by the Company with respect to the Company’s business and customary indemnities given by the Company in respect of liabilities arising out of or in connection with the Placing.
The Placing is conditional, amongst other things, on:
- Admission of the Placing Shares becoming effective by no later than 8.00 a.m. on 21 September 2021 (or such later time and/ or date as the Company and the Broker shall agree, not being later than 15 October 2021);
- the delivery by the Company to the Broker of certain documents required under the Placing Agreement;
- the Company having fully performed its obligations under the Placing Agreement to the extent that such obligations fall to be performed prior to Admission; and
- the Placing Agreement not having been terminated by the Broker in accordance with its terms.
The timing for the close of the Bookbuild and allocation of the Placing Shares shall be at the discretion of the Broker, in consultation with the Company. The final number of Placing Shares will be agreed by the Broker and the Company at the close of the Bookbuild and the result will be announced as soon as practicable thereafter.
Application will be made to London Stock Exchange plc for the Placing Shares to be admitted to trading on AIM. Subject to the satisfaction of the conditions referred to above, it is expected that Admission will be effective, and dealings in the Placing Shares will commence, at 8.00 a.m. on 21 September 2021.
The Placing Shares will, when issued, rank pari passu in all respects with each other and with the existing ordinary shares in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of the ordinary shares after the date of issue of the Placing Shares.
Use of Proceeds
The Company intends that the net proceeds of the Placing will be used to satisfy the consideration in respect of the Acquisitions and towards the completion of Project Roan while accelerating the capitalisation and progress of Project Lechwe and Project Elephant.