Jubilee secures more chrome processing capacity

Jubilee Metals is spending R154m to consolidate its chrome and platinum group metals (PGMs) tailings retreatment business by buying a processing plant and dumps, to add to its portfolio.

Jubilee, a low-key operator, is steadily tying up resources and projects to become a profitable source of chrome and PGMs, as it advances work on developing an underground PGM mine at Tjate in northeastern SA, and a base metals tailings retreatment project in Zambia.

In the latest step in its strategy, Jubilee, which is traded on the AltX and London’s AIM bourses, has agreed with PlatCro Minerals to buy its chrome processing operations for £8.6m (R154m) in a deal that will be funded via project funding, cash and the issuance of shares.

Jubilee reckons the target business generates annual earnings of $5.5m a year.

Not only will Jubilee buy the plant, which has the capacity to process 75,000 tonnes of feed a month, but it will also acquire 1.8-million tonnes of tailings, which contain chrome and PGMs.

Jubilee says its position on the Western Limb of the Bushveld Igneous Complex, a geological feature that hosts the world’s richest known PGM and chrome deposits, will allow it to extend processing capacity to smaller companies for a fee.

“Our integrated processing hub offers leading processing access to the various independent mines free of the capital and regulatory burden associated with own build,” Jubilee CEO Leon Coetzer says.

With the consolidation, Jubilee can now process 65,000 tonnes a month of PGM-bearing tailings and 80,000 tonnes a month of chrome-bearing material.

Jubilee has an agreement with Northam Platinum to provide 60,000 tonnes a month of PGM-bearing material that has had the chrome removed, to process at its mothballed Eland operations from early in 2019.

The agreement suits both parties because not only does it provide a processing option to Jubilee but it is a cheap and practical way for Northam to recommission the concentrator at the suspended Eland mining and concentrating operation it bought from Glencore.

Northam is studying the best way and time to bring the Eland operation back into production, and the agreement with Jubilee allows it to fine tune its concentrator until that happens.

The deal, which is expected to be concluded early in 2019, will be funded through a cash payment of $2.8m, project financing of $6m and the balance in newly issued shares.

seccombea@businesslive.co.za