Base and precious metals miner Jubilee Metals has announced a strong performance in the six months ended December 31, 2022, with a 20% increase in platinum group metals (PGMs) produced from own operations and chrome production exceeding its guidance.
The company’s adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) reduced to £11.8-million, compared with adjusted Ebitda of just under £15-million reported in the six months ended December 31, 2021, owing to lower PGM and copper prices.
Notably, the PGM basket price was down 11% to $1 453/oz in the reporting period, which was partially offset by PGM operational cost management and production output.
The realised copper price of $6 893/oz was down 28% in the reporting period, compared with the same six months of 2021, with strong market recovery having been witnessed after December.
Net cash flow from operating activities was higher at £16.9-million in the six months under review, compared with net cash flow generation of £2.3-million in the prior comparable period.
Jubilee closed the first six months of the 2023 financial year with £11.7-million of cash on hand, after spending £24-million on copper and cobalt expansion initiatives.
The company reported a 20% increase in PGMs produced from its own operations on the back of the Inyoni expansion in Gauteng, recording production of 18 208 oz in the reporting period, compared with 15 152 oz produced from own operations in the prior comparable period.
Overall, PGMs production was down from 20 316 oz produced in the prior corresponding six months.
The company aims to produce an additional 25 000 oz/y of PGMs once its Eastern Limb PGM project comes to light; with construction envisioned to start between October and December this year.
Chrome production was 2.3% higher year-on-year at 634 111 t, standing the company in good stead to exceed full-year guidance of 1.2-million tonnes. This was despite power disruptions experienced at the chrome processing operations in the six months under review.
Copper production of 1 149 t was below expectations, owing to a delayed ramp-up of the Roan Concentrator, owing to power and water disruptions in Zambia. Jubilee advises that the delays have been resolved and the plant has reached 80% of its full capacity by March 20.
Jubilee also expects to have fully commercialised the Southern Copper Refining project during May, which will see the company producing coper and cobalt from waste and discard materials.
The Southern Copper Refining project is expected to maintain 550 t of copper a month from the Roan Concentrator, and 130 t of copper a month from third-party supplies.
Next, the Northern Copper and Cobalt Refining project will target an additional 35 000 t/y of copper.
CEO Leon Coetzer says the company’s exposure to a multi-commodity operational footprint continues to offer great flexibility, especially in times of volatile metal markets. He adds that chrome and copper prices have been resilient, which will translate into an increased contribution to earnings and revenues.
Moreover, green shoots in cobalt demand have started emerging as of late, driven by interest from China’s construction sector, which can support a recovery in cobalt demand.
The Sable Refinery has allowed Jubilee to pivot more to copper production, as cobalt prices fell sharply in the reporting period.
Jubilee is on track to produce 38 000 oz of PGMs by the end of the 2023 financial year, with upwards revision potential depending on South Africa’s power supply outlook.
The company also expects its chrome production to exceed guidance of 1.2-million tonnes, while copper guidance has been revised down to 3 000 t, aligned with the delayed ramp-up of the Roan Concentrator.