Jubilee Metals announces new partnership in South Africa
Jubilee Metals Group has announced a new partnership agreement for its PGM and chrome operations in South Africa. The firm aims to expand its chrome processing capacity by an additional 360,000 tonnes per annum (tpa). This partnership expansion is expected to target an increase of 200,000 tonnes of chrome concentrate and 10,000 ounces of PGM feed to Inyoni.
The agreement establishes a long-term relationship with a producing mining operation on the western limb of the Bushveld Complex in South Africa. This allows Jubilee to have greater exposure to potential earnings from the chrome produced.
Jubilee has committed to upgrading the existing brownfield processing facility at the mine. The company plans to retrofit its proven process solution, aiming to achieve an annualized processing capacity of 360,000 tonnes of run-of-mine (ROM) per annum by the end of June 2023. The plant upgrade has already commenced, leveraging available processing infrastructure at Jubilee’s current chrome operations.
Potential earnings
Jubilee has the option to expand the processing facility further, aiming for a total capacity of 720,000 tpa. This expansion would result in an expected production of 390,000 tonnes of chrome concentrate. Jubilee has also budgeted a capital investment of US$8 million to complete the plant upgrade. The funding will come from Jubilee’s own cashflows and balance sheet.
Under the agreement, Jubilee’s potential earnings per tonne of chrome concentrate produced are expected to increase five-fold compared to existing toll treatment terms. The agreement offers a higher margin per tonne of chrome concentrate produced, presenting a significant improvement for Jubilee.
The partnership agreement aligns with Jubilee’s growth target of reaching an annualized production rate of 2 million tonnes of chrome concentrate over the next 24 months, representing a more than 60% increase.
The agreement supports Jubilee’s strategy of producing a diverse basket of commodities, as chrome prices remain strong while PGM prices are relatively weaker. Jubilee has been implementing emergency back-up power supply to its operations, and it has reached 60% of its total chrome processing capacity. This ensures a stable feed to the PGM operations.
Jubilee Metals Group’s CEO, Leon Coetzer, stated that the new partnership agreement strengthens their relationship with an existing chrome producer and provides a more integrated and stable production profile. The agreement offers the potential for Jubilee to significantly increase its earnings from the sale of chrome concentrate and aligns with the company’s expansion plans in South Africa.
