Aim- and AltX-listed Jubilee Metals delivered a sixth consecutive six-monthly period of double-digit growth with a 54% year-on-year increase in combined operational earnings for the first half of the year at £12.8-million.
Jubilee also achieved an 18% year-on-year increase in combined first half revenue to £29.4-million.
According to a July 13 release, the company’s increased cash position was maintained despite settling of the final payment of £1.4-million for the acquisition of additional platinum-group metals (PGMs) and chrome rights, as well as the settling of historical debt of £2.5-million, while maintaining capitalisation of the Zambian Sable Refinery, where Jubilee has started production of both copper cathode and cobalt concentrate.
Jubilee is targeting the production of 25 000 t/y of copper within the next four years.
In terms of its PGM project operational earnings, there was a 54% year-on-year increase to £12.5-million, while PGMs project revenue increased by 31% year-on-year to £21-million.
PGMs concentrate delivered reached 19 682 oz during the period, about 7% lower than that of the prior comparable period owing to Covid-19-related restrictions.
PGM results are net of 40% of the Windsor PGM results attributable to the company's joint venture partner.
With regard to the chrome operations, Jubilee’s project earnings were up 32% year-on-year to £200 000, despite suppressed chrome metal prices during the period.
Chrome project revenue was down 5% year-on-year to £8.4-million and chrome concentrate production was up 3% year-on-year to 191 995 t.
The combined operational revenue performance for the first half of 2020 amounted to over £29.4-million, or R615-million, with attributable earnings amounting to £12.7-million, or R266-million.
Chrome earnings increased by 32% to £200 000 (up 49% to R4.7-million) from the prior comparable period despite chrome revenues reducing by 5% to £8.5-million (up 7% to R176-million) from the second half of 2019. According to Jubilee, this increase was driven by efficiencies and adjusting third party ore supply agreements to better reflect the fluctuations in the chrome price.
In the interim, chrome prices are expected to remain volatile owing to the disruptions in the supply chain over the sixth-month period, and these price fluctuations are expected to continue over the next six months as the world emerges from the pandemic and supply and demand fundamentals are better matched.
Following the acquisition of PGM surface tailings, Inyoni Operations started production of chrome in November 2019 with a total of 21 018 t of concentrate produced for the first half of this year.
Jubilee has started the relocation of its ground-breaking fine chrome facility to its much larger Windsor and Inyoni operations to contribute more significantly to group earnings and overcome the delays in the potential roll-out of the solution caused by extended equipment delivery time lines during the period owing to the pandemic.
CEO Leon Coetzer says the group is “demonstrating clear potential to continue to grow earnings over the next reporting period” on the back of commissioning both of the company’s copper and cobalt refining circuits and the expected ramp-up of copper production.
Overall, Jubilee maintained its strong growth trajectory in the first half of the year, delivering another significant increase in earnings. The growth in both revenue and earnings was delivered despite the operational interruptions and challenges posed by the current Covid-19 pandemic, the company says.
Beyond growth in revenue and earnings, Jubilee continued to strengthen its asset base, this time in Zambia.
This aligns with the company’s strategy to target other geographical areas and metals including copper tailings resources in Zambia.
In June, Jubilee announced that it had entered into a joint venture agreement with the mining rights holder, Star Tanganika, to process about 50-million tonnes of copper containing surface tailings targeted to be upgraded at site and refined at its Sable Refinery, in Zambia.
The project, called Project Elephant, will target the production of copper concentrate through a dedicated new copper concentrating facility to be built over the next 24 months. Project Elephant alone holds the potential to produce copper concentrate in excess of the total Sable Refinery capacity of 14 000 t/y of copper cathode.
Based on current operating margins maintained at the Sable Refinery for the production of copper cathode, combined with the performance of Jubilee's large-scale piloting test programme on copper tailings, the project holds the potential to more than double Jubilee's current earnings profile.
The ramp-up of the copper circuit was implemented to position the company to capitalise on the positive sentiment returning to the copper industry, which is expected to reflect in metal prices.
Jubilee also identified a further copper containing resource which holds the potential to be brought into operation well in advance of Project Elephant. Such targeted projects offer Jubilee the potential to secure a sustained increase in copper production well in advance of starting operations at Project Elephant.