Dual-listed Jubilee Metals has entered into an agreement to acquire all of the chrome

beneficiation assets including plant, equipment, intellectual property and all rights to the existing surface material – estimated to be in excess of 1.8-million tonnes – owned by PlatCro Minerals and associated companies (the target), for £8.26-million.

The major chrome operation currently processes 75 000 t a month.

The target currently generates earnings of about £4.3-million.

The business is acquired free from any historic liabilities.

The acquisition provides AltX- and Aim-listed Jubilee with a strategic position within South Africa’s platinum group metals- (PGMs-) and chrome-rich Western Bushveld Complex.

It consolidates the chrome and PGM operations at PlatCro and will considerably enhance future earnings from PGMs and chrome, Jubilee explained in a statement issued on Monday.

The current operation will more than double Jubilee’s existing chrome processing capacity.

Jubilee intends to increase processing efficiencies and operational capacities, while seeking to secure third-party material in the area.

“This transaction repositions Jubilee in the chrome/platinum arena in South Africa. Our integrated processing hub offers leading processing access to the various independent mines free of the capital and regulatory burden associated with own build,” commented Jubilee CEO Leon Coetzer.

With the integration of the PlatCro PGM project, the company anticipates the processing of 65 000 t a month of PGM-rich materials and 80 000 t a month of chrome materials.

The operation currently achieves yearly earnings from chrome alone in excess of $5.5-million before the contribution of PGMs.

“We see significant opportunity to increase earnings by increased throughput and improved operational efficiencies.

“I am particularly pleased that this acquisition has been enabled by our current cash and project finance, with minimal dilution to our shareholders.”

Jubilee will pay the aggregate purchase price for the acquisition to the target on January 7, 2019, save for the amount of £670 000, which will become payable by Jubilee to the target upon successful registration of the property into Jubilee or its nominee’s name.

Jubilee will take ownership and operational control of the target on January 7, 2019. 

The purchase price will be funded through $6-million in secured project financing; a cash payment of $2.83-million; and the issue of 52.49-million new Jubilee shares at a price of 2.5p apiece.