Jubilee has executed a binding agreement (the "Transaction") to form a joint venture with AIM-quoted BMR to target the recovery of lead, zinc and vanadium from historical surface mine tailings and discards ("the Project"). Under the Transaction, a joint venture company will be established ("Kabwe Operations") which will be assigned all intellectual property developed for the execution of the Project as well as the right to fund and execute the Project on behalf of BMR. Kabwe Operations will be appointed operator of the Project, with responsibility for commissioning, funding, construction and operations of the Project. Kabwe Operations will sub-contract operator responsibilities to Jubilee. In terms of the Transaction Jubilee is offered the right to earn into Kabwe Operations through staged debt funding ("Debt Finance") as set out below. Jubilee's earn-in interest in Kabwe Operations will be through preferred shares issued in Kabwe Operations ("Preferred Shares"), which will have equal voting rights to ordinary shares of Kabwe Operations and will have the preferred right to receive 100% of distributed profits from Kabwe Operations until the preferred Debt Finance plus a 30% interest component is fully paid, where after the Preferred Shares will convert into ordinary shares of Kabwe Operations.
The Kabwe mine was discovered during 1902 and commenced operations in 1904, reaching full-scale production in 1906. It officially closed down on 3 June 1994 due to its operations becoming uneconomic at that time. The site was placed under care and maintenance by the national mining company, The Zambian Consolidated Copper Mines ("ZCCM"). For 88 years of continuous operation until final closure in 1994, Kabwe was regarded as one of the famous mines in Africa and held a key position of national economic importance.
During its life time the mine produced the following:
· Zinc (Zn) 1,800,000 tonnes
· Lead (Pb) 800,000 tonnes
· Vanadium Oxide (V2O) 7,816 tonnes
· Silver (Ag) 80,000kg
· Cadmium (Cd) 235,000kg
Importantly, the above-ground dumps of mineral-rich tailings, slag and waste left onsite during the mining years are still in place. A large project conducted by the World Bank and the Nordic Development Fund commenced in 2005 for the environmental rehabilitation of the Kabwe mine area and is still ongoing. On closure of the operations in 1994, much of the site area and plant infrastructure was sold in discrete lots to private investors, with the overall responsibility for decommissioning and rehabilitation of the sites retained by ZCCM. In recent years, the ownership of the Kabwe complex has been rationalised and since 2008 has been steadily acquired by BMR which now owns all the surface rights over the 705 hectares site.
The Kabwe Tailings Stockpiles
Enviro Processing Ltd holds the Small Scale Licence 7081-HQ-SML in respect of the Tailings Stockpiles on and the Large Scale Licence 6990-HQ-LML (applying to the whole 703 hectares of the BMR Kabwe site. BMR has acquired all the stockpiles of tailings at the Kabwe mine complex. These assets are held by Enviro Mining Ltd, which is a wholly-owned subsidiary of BMR, and its two Zambian-registered subsidiaries, Enviro Processing Ltd and Enviro Props Ltd.
Other Above Ground Dumps
In addition to the aforementioned stockpiles, further aggregate stockpiles from previous mine operations including all surface materials at the Kabwe site, totals an approximate 6,4 million tonnes containing an estimated 356 843 tonnes of zinc and 351 386 tonnes of lead.