JOHANNESBURG (miningweekly.com) – Jubilee Platinum has formed a joint venture (JV) with Aim-listed BMR Group to recover zinc, lead and vanadium at BMR’s Kabwe project, in Zambia. 

Under the terms of the deal, AltX- and Aim-listed Jubilee will have the right to earn into the Kabwe operations through a three-staged debt funding.

Jubilee's earn-in interest in the Kabwe operations will be through preferred shares issued in the operations, which will have equal voting rights to ordinary shares and will have the preferred right to receive 100% of distributed profits from Kabwe until the preferred debt finance plus a 30% interest component is fully paid.

In Phase 1, Jubilee will provide £300 000 to the Kabwe operations to secure a 15% interest. This funding will be considered as confirmation by Jubilee of the initial design, work programme and budget for the construction of the project (the approved works programme).

The approved works programme to be prepared by Jubilee by February 28, 2018.

Once complete, Jubilee will confirm whether or not it wants to proceed with the further farm-in to the Kabwe operations.

Should it proceed with Phase 2, Jubilee will provide a further £1-million in funding towards the implementation of the approved works programme in return for a further 15% interest in the Kabwe operations.

Phase 3 will enable Jubilee to lift its interest in the Kabwe operations to 40% by providing a further £1-million in funding for the implementation of the approved works programme, targeting commercial production

Kabwe will be appointed operator of the project, with responsibility for commissioning, funding, construction and operations.

BMR will retain full ownership of the Kabwe mining licence, tailings and infrastructure, as well as 60% of the long-term post-tax profits of the Kabwe operations.

"This transaction is in line with our mission to take our brand and expertise across country borders and commodities,” Jubilee CEO Leon Coetzer said in a statement on Monday.

He added that the project was meaningful in scope, diversity and potential contribution to the company's earnings.

“The project benefits from existing infrastructure including power, water and building infrastructure, which significantly reduces the required project capital and shortens the implementation timeline,” he said.

BMR chairperson Alex Borrelli commented that the company has secured a strong partner to co-develop the Kabwe operations.

“Our principal objective is to ensure that, subject to Jubilee's review, we can complete the construction, and start commissioning of the Kabwe plant by June 30, 2018, with revenue generation commencing thereafter.

“BMR is confident that Kabwe is a robust and feasible operation and we look forward to co-developing this project with Jubilee,” he stated.

He further noted that, in addition to the work at Kabwe, BMR expects the two companies will work towards integrating the treatment of high-grade zinc ore from the Star Zinc mine, in which BMR has a 49% interest, at an early stage at the Kabwe plant, which should lead to enhanced returns.