A subsidiary of South Africa’s largest ferrochrome producer – K2018239983 (NewCo) – has exercised its rights to sell all further chrome rights to the chrome contained in all of the historical tailings at Inyoni, to metals processing company Jubilee Metals.
Inyoni was previously known as Jubilee’s Hernic project.
The historical tailings that are now available to Jubilee have increased by 1.7-million tonnes of historical tailings at the Inyoni operations. It also includes 630 000 t of previously processed tailings and a further one-million tonnes of platinum-group-metal- (PGM-) rich material acquired by Jubilee.
A statement issued by Jubilee on Tuesday noted that the acquisition had the potential to significantly enhance earnings from the Inyoni operations, which previously free issued the currently produced saleable chrome concentrate to Hernic.
Jubilee will now accelerate the implementation of its fine chrome technology at the Inyoni operations to further increase chrome concentrate production.
The acquisition also provides Jubilee with the optionality to respond to market conditions throughout the metals mix, optimising project earnings.
The total consideration for all the chrome contained in the historical tailings is about $16.3-million, at current conversion rates, which will be majority funded from Jubilee’s existing cash and operating cash flows, together with project funding as necessary.
Commenting on the addition of the chrome rights, CEO Leon Coetzer said Jubilee was already recovering the chrome concentrate at Inyoni. The concentrate would now be sold to the market solely for Jubilee’s benefit.
“This has the potential to add a further 8 000 t to 10 000 t a month of chrome concentrate to our existing chrome operations with no additional risk to Jubilee and the majority of operating costs already being absorbed by the PGM operation,” he said.
The agreement was a further milestone in the company’s ongoing strategy to grow and diversify the company’s earnings base, Coetzer added.
Jubilee last month entered into a framework and tailings purchase agreement with NewCo to acquire 100% of the rights to PGM earnings from the current and future tailings produced at Jubilee’s Inyoni project, which is located in the Bushveld Complex, South Africa.