JOHANNESBURG (miningweekly.com) – JSE- and Aim-listed mine-to-metals specialist Jubilee Platinum’s gross profit derived from its Middelburg smelter operations increased by 89% year-on-year in the third quarter, up from R3.77-million to R7.13-million, while revenue increased 43% to R11.7-million.

“In response to the downturn in platinum markets, Jubilee refined its short-term strategy to leverage off the ConRoast process to secure access to both platinum-containing chrome-rich materials that are at or near surface, as well as platinum-bearing waste materials at surface,” Jubilee CEO Leon Coetzer said, adding that the smelter operations were generating growing cash flows by targeting the production of ferroalloy metals based on the ConRoast process and reductive smelter technologies.

The company stated that the smelter’s capacity remained fully contracted at its current operational capacity of 10 000 t/y of metal.

Jubilee also, during the quarter, secured a further ferroalloy smelting contract to produce ferrosilicon (FeSi) on the back of the successful phase 3 upgrade of the smelter. FeSi production started on August 5.

In addition, it secured a new ferronickel (FeNi) toll-smelting contract. This new contract offered a 17% increase in the revenue per ton of metal produced at the targeted metal production of 9 600 t/y of FeNi, compared with the current production level of 6 240 t/y of FeNi under the existing toll contract.

“We are delighted by the latest contract wins, which highlight the strengths of the smelter operations and are helping to drive our forward-looking strategy,” Coetzer said, adding that, given the growing returns available, the company had opted not to offer a further extension to Global Renewable Energy (GRE) with regard to the sales agreement announced in May, in terms of which GRE would acquire Jubilee’s nonplatinum assets.

“The Jubilee board has concluded that, with the increased production from further toll smelting contracts secured and the resultant improved earnings achieved by the smelter operation, the company can no longer prolong the sale of the nonplatinum assets and has elected instead to execute phase 4 of the renewable programme of the smelters,” the company said.

The company stated that the new FeNi contract extension enabled it to start with the planned final phase of the upgrade of the smelter to conclude the infrastructure renewal and the recommissioning of the existing third furnace to increase the smelter’s design capacity to an estimated 13 800 t/y.

The estimated £410 000 cost of this final phase would be provided through project funding secured over the projected earnings of the smelter operations.

“With the revenues from new toll smelting contracts, the smelter operation will be able to sustain revenue growth, resulting in positive earnings,” Jubilee said.

Meanwhile, the company had also managed to secure the rights to the recovery of platinum-group metals from the surface material at the Dilokong chrome mine (DCM), which was expected to further enhance the earnings profile of the company. 

“We continue to engage with companies holding similar assets to the DCM surface material to grow Jubilee’s access to platinum-containing material at or near surface,” Coetzer said.