Aim- and AltX-listed Jubilee Metals says it has a “robust business model” and is, therefore, confident that the group will be able to withstand the disruption caused by the spread of the Covid-19 virus across the globe.
In anticipation of this disruption, Jubilee says it has already taken proactive measures to minimise costs and maximise production ahead of South Africa’s three-week national lockdown from March 27.
While work on the ground has been temporarily halted, Jubilee’s employees will continue to work remotely, where possible, to progress operations and continue advancing its growth strategy.
However, guidance being given in respect of the Covid-19 outbreak is evolving and the company intends to monitor the situation closely.
Additionally, the metals processing company on March 26 released its interim results for the six months ended December 31.
In August 2019, Jubilee announced the completion of the acquisition of the Sable zinc refinery, in Kabwe, which presents the company with a well-placed platform from which to enjoy the various base metal opportunities in Zambia.
The refinery expands the company’s commodity basket to include copper, vanadium, zinc and lead.
Having this diversified commodity basket provides Jubilee with “considerable resilience” in the face of fluctuating metals prices.
Jubilee also acquired a facility that was brought, in part, into operation within four months of the acquisition, thereby reducing the lead time to production. The copper circuits at this facility are advanced with a capacity of about 15 000 t/y of contained copper, and as such, Jubilee is accelerating its copper endeavours while updating the zinc facility.
In July 2019, the company’s Windsor platinum group metals (PGMs) project in South Africa started operations and by the end of August, all circuits were functional, with productivity initiatives being implemented.
In November, Jubilee announced that it had acquired 100% of the earnings of the Inyoni operation in South Africa. The objective of this acquisition was to transform Jubilee from a contracting joint venture (JV) to a full owner of 100% of the economic rights without additional risk.
In acquiring full control, Jubilee has increased its flexibility and now has the opportunity to increase throughput, respond to market conditions and to optimize certain aspects of the operation to its ultimate benefit.
To support these acquisitions and to assist in financing targeted expansions plans, both in Zambia and South Africa, the company completed an oversubscribed placing of about £6.5-million in November 2019.
Looking forward, Jubilee is convinced that the long-term fundamentals for copper are exceptional and, as such, has focused on the Kabwe copper project to ensure maximum production capability is achieved.
With so much opportunity for growth from the company’s current business activities alone, Jubilee says it will be focussing on maximising this benefit from current operations in the medium term, where it is aware of the risks and where it believes incremental benefit can be substantial.
During the six-month period, Jubilee’s earnings increased by 778% year-on-year to £6.6-million.
Cash generation from operations was up 570% to just under £5-million, and revenue increased by 205% to £25.4-million.
Attributable group earnings increased by 146% to £9.8-million.
The group balance sheet strengthened further on the back of the strong financial performance and large strategic investments, with total assets standing at £118.8-million, up from £102-million at the end of June 2019.
As a result, the total equity increased by 12% to £88-million, for the same period, maintaining a high 74% equity ratio.
The group paid a substantial £17.7-million in cash for investments made during the period under review, while simultaneously reducing external debt by £2.2-million, keeping the net gearing ratio at a low 0.3%.
Basic earnings a share for the period was 35p.
During the interim period, PGM production was up 72% to 21 082 oz, taking PGM revenue up to £16.2-million, a 130% increase.