Jubilee buys Zambian zinc refinery for $12m
Purchase from Glencore speeds up its multimetal project, the first outside its three tailings treatment businesses in SA
As Jubilee Metals Group gains traction on its three SA chrome and platinum group metal projects, it has bought a refinery with secured funds of $22.5m in shares and debt to fund a new multimetal project in Zambia.
Jubilee, which is traded on the London and Johannesburg bourses, bought the Sable zinc refinery for $12m from Glencore subsidiaries in Zambia, for which Jubilee will make phased payments.
By refurbishing the zinc refinery, Jubilee will cut 18 months out of the timeline to build a new zinc circuit. The total capital for Kabwe is $24m.
The Kabwe project in Zambia, which entails the retreatment of tailings, the waste product coming out of a processing plant, will deliver 8,000 tonnes of zinc, 15,000 tonnes of lead and 1,500 tonnes of vanadium a year once the project ramps up to steady state production over a two-year period.
The share issue to raise $14.5m and the debt funding of $8m ensures there is enough capital to build the project, said CEO Leon Coetzer.
In SA the largest operation is the one treating 55,000 tonnes a month of chrome tailings coming from Hernic. The plant will deliver up to 33,000oz a year of platinum group metals (PGMs).
Hernic got off to a slow start in 2018, but it delivered positive earnings of R21m for January and February.
The second operation is PlatCro, which is delivering PGM-bearing material to Northam Platinum’s Eland concentrator.
In the two months to end-February, PlatCro generated earnings of R16m, ahead of target.
The project is beneficial for Jubilee and Northam, allowing the latter to recommission the concentrator by feeding it Jubilee’s material as well as tailings.
Northam bought the Eland mine and concentrator from Glencore for R175m. More than $1bn had been invested in buying and building Eland by Xstrata, a mining company taken over by Glencore.
Northam is expected to begin processing Jubilee’s material in May 2019. Jubilee forecast the project will deliver 30,000oz of PGMs a year.
The third project is the Dilokong chrome and platinum operation, which Jubilee describes as a “world first” for its ability to treat and deliver super-fine chrome, which other companies cannot recover and pass on to their tailings dumps.
The fine-chrome plant reached steady state production in March and based on its success Jubilee intends building similar plants at its two other operations in SA, said Coetzer.
The DCM plant holds capacity to process up to 25,000 tonnes per month of chrome-containing tailings material. Jubilee will aim to roll this out to its other operations.