Jubilee in talks over R255m debt facility

4th August 2015 By: Natasha Odendaal - Creamer Media Senior Deputy Editor

JOHANNESBURG (miningweekly.com) – Following dual-listed Jubilee Platinum’s announcement that it is in advanced talks for a debt facility to fund the bulk of the R346-million needed to bring its two surface platinum processing plants into operation, the mine-to-metals specialist’s JSE share price on Tuesday afternoon contracted nearly 8% from an earlier 10% surge, before stabilising at around 90c a share.

Jubilee, in a market update to shareholders following the rise in the share price, confirmed that it had sought a R255-million debt funding facility with a major financial institution, with the funding shortfall expected to be covered by the proceeds of the sale of its nonplatinum assets.

Jubilee planned to obtain shareholder approval on August 7 to sell its Jubilee Smelting and Refining subsidiary and a 70% interest in its Power Alt subsidiary to special purpose vehicle Main Street 1347 for R110-million to fund its ambitions of commissioning its two platinum surface projects in June 2016.

The company required R271-million to build the surface platinum and chrome beneficiation processing plants, while the working capital needed to commission projects and achieve positive earnings was estimated at R75-million.

The projects aimed to process 80 000 t/m of platinum-containing surface material to deliver 42 000 oz/y of platinum-group metals, with an internal rate of return in excess of 30% net of tax expected.

Jubilee noted that, while the funding had received credit approval, in principle, from the targeted major financial institution, there was no guarantee that the debt financing would be successfully completed.