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Jubilee Metals Group

Q&A with Jubilee Metals Group PLC: Latest update from Kabwe project (LON:JLP)

Jubilee Metals Group PLC (LON:JLP) Chief Executive Officer Leon Coetzer caught up with DirectorsTalk for an exclusive interview to discuss the latest from their Kabwe project, progress of other projects and when to expect them online and what’s in the pipeline going forward.

 

Q1: Your latest announcement on the Kabwe project indicated that Jubilee Metals Group had taken control of this exciting surface metals recovery project. Could you recap the new arrangement and give us an update on how the project is progressing?

A1: Originally, Jubilee and a company BMR entered into a contractual agreement whereby we were appointed to review, develop, implement and operate the solution for the Kabwe project. During that phase of the project, we recognised the potential of the project as well as the fact that some of our proprietary process solutions could dramatically improve the situation in that project.

We then entered into discussions with BMR to change the contractual agreements and we were very happy that by August last month, we were able to announce that we’ve in fact changed our contractual agreement whereby JLP took immediate effective control of the project. We took 87.5% controlling position, if you add our shares of BMR, it means we have an indirect controlled position of 91% of that project and in return, we would then offer a 12.5% royalty payment to BMR.

At the same time, we held the option, and still do, to take our ownership up to 100% of that project and just to be clear, the royalty that we’ve offered to BMR of course is only payable after JLP have secured our capital return rates, it’s also only after all related project costs have been fully covered by the project. Only thereafter on distributable cash we then pay a remaining 12.5% of the distributable cash to BMR.

What that meant was with this new arrangement is it has allowed Jubilee to accelerate its investment into the project because we had a stronger position, our position was more secured, and it was independent of BMR’s own financial strength, this is why we announced to the market that on the back of that agreement, we’ve accelerated our investment. We will, as we said, be implementing the zinc refining circuit first of that project, we’re targeting that refining circuit to bring it into operation and start producing zinc by mid-year next year. Shortly after that, the lead and vanadium circuit will follow on that project.

For us, it was always a very exciting step, I think our shareholders approve of that move as well, it put us into control of a 6.5 million tonne surface stock rich in lead, zinc and vanadium.

 

Q2: In our previous interview, you spoke of the next half of 2018 being a very busy period with several projects under construction. How are you progressing with these projects and when can we expect to see them coming on line?

A2: We certainly are looking at a very busy time at the moment, we ended the previous half-year in June on a high, we made record platinum ounces, our Hernic project alone produced 6,800oz which translated into earnings of £2.7 million, £6 million revenue from Hernic alone so on a very high the first 6 months.

The next 6 months, quite right, we announced very excitedly that we are launching our fine chrome recovery process into the industry in these 6 months, we are operating and recovering chrome at various projects. The industry as a whole are very inefficient at recovering fine chrome, if you look at the losses in fine chrome, up to 60/70% of those losses are due to what we call fine chrome, it’s like a powdery fine chrome. Our R&D team that work really hard in the background in the past 2 years have solved that problem and we’re launching that solution into the industry with our first plant being built and commissioned by November which is a fine chrome recovery plant at our Dilokong mine. We have and expect two more on the cards to follow that installation to demonstrate to the industry how you solve this problem, it of course opens up a whole new potential earnings and revenue stream for our company.

As we said, our Kabwe project of course is under construction, the zinc circuit has been pushed really hard targeting that mid-2019 to start producing zinc metal. Of course, we have our PlatCro platinum project where we are constructing classification and dewatering circuits to upgrade the platinum material before it is refined in partnership with Northam Platinum and that targeted to come on line February next year. Of course, when that project comes on line, we’ll more than double our platinum production in our company so definitely a very busy 6 months.

 

Q3: What is next in the pipeline for Jubilee Metals Group?

A3: We are fortunate in that we have a solid foundation of projects now in the company, it’s across jurisdictions and it’s across metal groups of base metals coming on stream; chrome, platinum on stream.

It’s drawn the attention of a number of mining companies, we are engaged in discussions with international mining companies at the moment with operations in Europe, Australia, South America and in Africa. We are very excited that this foundation has demonstrated to the mining industry what we are capable of and we certainly are looking to capitalise on that position in the very near future with these discussions.