Jubilee swings to interim profit and sees more coming

Jubilee Metals expects its leap into an interim profit to continue for the balance of its financial year as new projects are ramped up, adding to its successful Hernic platinum group metals (PGM) and chrome recovery operations.

Jubilee swung to a post-tax profit of R13m for the six months to end-December compared with a loss of R7.8m in the same period a year earlier.

With cash generation of R20m compared to R7m before, and a balance sheet cash position of £5.8m, Jubilee is positioned for its growth projects in Zambia as well as ramping up production from a number of early-stage businesses in SA. Those include the fine-chrome plant at its Dilokong Chrome Mine (DCM) project and the PlatCro business that is already sending PGM-bearing material to Northam Platinum’s Eland concentrator near Brits.

PGM output from its Hernic project rose to 12,288oz from 6,629oz, contributing R130m towards Jubilee’s total revenue of R144m. Group revenue was up 39% compared with the same period a year earlier.

Jubilee recovered its PGMs at Hernic at a cost of less than $400/oz, making it one of the cheapest sources of the metal worldwide. The first couple of months after December proved difficult because of the year-end holidays and outages caused by electricity supply constraints by debt-ridden state power utility Eskom.

Jubilee will bump up the amount of material it is feeding into its Hernic PGM plant, which will “further grow the earnings potential”, said Jubilee CEO Leon Coetzer.

“Further earnings growth drivers are targeted in the near term with the acceleration in deliveries of its platinum material to Northam,” he said.

Jubilee is particularly proud of its achievement of an industry-first: the recovery of ultrafine chrome from tailings at Dilokong. The plant has been commissioned and reached steady-state production during March.

It will treat 25,000 tonnes a month of tailings and Jubilee intends rolling the technology out to its other South African operations where chrome and PGMs are found in the same tailings.

PlatCro, which is a chrome-tailings retreatment operation Jubilee bought in January, is strategically placed near Brits and chrome-generating businesses.

PlatCro has 1.5-million tonnes of tailings that it will treat to extract chrome and PGMs, which will come from the nearby mothballed Eland concentrator that Northam bought from international commodity trader Glencore for R175m.

Northam is investigating the restart of the Eland mine and is commissioning its concentrator with PlatCro material and its own tailings until the mine is back in production.

Jubilee is also busy with a base-metal project at Kabwe, Zambia, to retreat tailings to recover lead, zinc and vanadium. It has issued shares and taken on debt to ensure the project is fully funded.

seccombea@bdfm.co.za