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Miner increases processing capacity

4th September 2015

  

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Platinum mining and exploration company Jubilee Platinum in August secured funding for the continued simultaneous execution of its two surface platinum projects in South Africa.

The projects will aim to process 80 000 t/m of platinum containing surface material to deliver an estimated 42 000 oz/y of platinum-group metals (PGMs) in concentrate per year.

“The funding package has placed us on a sound footing to transform Jubilee into a significant PGM producing company. We continue with our mission to acquire similar projects and enlarge the company’s production capacity using our knowledge and experience to the best interest of our shareholders,” says Jubilee Platinum CE Leon Coetzer.

The engineering design and specification is being fast-tracked for a timely start to construction. Platinum production is expected to start in the first half of 2016.

The size of the debt funding equates to R255-million before financing costs. The project capital required for the platinum surface projects is estimated at R271-million. The working capital required to bring the projects to operation and to achieve positive earnings is estimated at R75-million.

The secured placing allows Jubilee to remain on track with the execution of the projects. The combined funds from the placing together with the debt funding and the sale of the non-platinum operational assets will address funding requirements for the design, construction, commissioning and working capital during the ramp-up phase of the project.

The company will also issue a final debt settlement on behalf of its subsidiary, Jubilee Smelting and Refining, in lieu of services provided towards the development of the surface platinum projects, a total of 1.26-million new ordinary shares at a price of R79.06, being a premium of 21.5% to the 30-day volume weighted average price of Jubilee ordinary shares as at August 4.

The shares have been issued as fully paid and rank equally in all respects with the existing ordinary shares, including the right to receive all dividends and other distributions declared on or after the date on which they are issued.

"We are fortunate in that the ramp-up to earnings for these types of projects is very short. We are not speaking of a typical mine, where it can take five to six years or even longer to ramp up to full production. Such projects can go from construction to full operation mode within 16 months. Therefore, the cost of the debt is less because the repayment plan can kick in earlier,” says Coetzer.

Last year Jubilee secured a contract to process material at chrome producer ASA Metal’s Dilokong chrome mine, in Limpopo, and it also has a deal to process material with ferrochrome producer Hernic Ferrochrome.

About Jubilee Platinum

In addition to PGMs, Jubilee Platinum has various operational exposures to ferroalloys and chromite, as well as platinum-group elements (PGE) and ferroalloy smelting and refining capabilities.

Jubilee’s corporate mission in the metals industry is to create an integrated mine-to-metals company with a primary focus on platinum. This mission is based on modern smelting technology to process its own and other companies’ high-chrome PGE concentrates and also to improve mining environments by reprocessing mine tailings dumped by other miners.

The company’s prime asset in South Africa is the Tjate platinum project, in Limpopo, in which it has a 63% beneficial interest.

The property covers 5 140 ha on three farms and the area contains a potential net resource of 65-million ounces of PGEs and gold. This represents the resource targeted by future exploratory drilling.

Furthermore, this targeted estimate, which derives from the extrapolation of current drilling results is three times greater than the currently indicated and inferred resource estimate.

Tjate’s Merensky and upper group two platinum reefs lie between 600 m and 1 000 m below surface. The property’s reefs extend to depths greater than 1 600 m, offering potential to extend or expand production in future.

Jubilee’s near-term exploration strategy is to bring Tjate to feasibility study stage. The company has also established a subsidiary, Braemore Platinum Resources, to explore for near-surface PGE and chrome prospects in the western Bushveld Igneous Complex, in South Africa.

Jubilee also owns the nickel-copper-PGE Ambodilafa project, in Madagascar, located 160 km south-east of the country’s capital Antananarivo.

The project area includes a 6 km long high intensity aeromagnetic anomaly related to iron ore, which has been sampled in outcrop.

Jubilee’s financial and production planning is based on what it believes will be long-term market trends – that demand for platinum will remain firm.

The company is dedicated to sustainable and socially responsible development and its strategic intent includes running projects that adhere to environmental standards.

The com- pany is also a proponent for the role of foreign direct investment as a key form of social devel-opment in developing African countries.


Edited by Leandi Kolver
Creamer Media Deputy Editor

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