Interim Results


Regulatory Story
Jubilee Platinum PLC – JLP
Interim Results
Released 07:00 25-Mar-2015
RNS Number : 3695I
Jubilee Platinum PLC
25 March 2015

(“Registration number 4459850”)
AIM share code: JLP
Altx share code: JBL
ISIN: GB0031852162

Not for release, publication or distribution in whole or in part in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction.

25 March 2015
Jubilee Platinum Plc
(“Jubilee” or “the Company”)

The Directors of AIM-quoted and Altx-listed Jubilee, the Mine-to-Metals company, are pleased to announce the unaudited interim results of the Group for the six months ended 31 December 2014.
The interim results for the period under review reflect the growth in the Company’s revenue base supported by the improved performance from the Middelburg smelter and power plant (collectively the “Middelburg Operations”) while further reducing overhead expenditure. The improved performance of the Middelburg Operations reflects the successful implementation of the renewal program over the past two years. Further process optimisation is expected during H1 of 2015, specifically targeting the Middelburg Operations variable cost component.

Revenue increased by 22% to £2.8 million (2013: £2.3 million). In ZAR terms revenue increased to ZAR 49.4 million (2013: ZAR36.11 million).

Gross profit increased by 34% to £1.3 million (2013: £0.97 million) – supporting the sustainable revenue growth over the last two reporting periods. In ZAR terms gross profit increased to ZAR 23.7 million (2013: ZAR 15.5 million).
Loss per share for the period reduced by 57% to a loss of 0.2 pence per share (2013: loss of 0.46).

Middelburg Operations performance further improved on the back of the implementation of the smelter renewal program.

The Department of Mineral Resources (DMR) requested Tjate to support its mining right application with an operational rehabilitation guarantee. This requested is expected to be the final step prior to the issuance of a Mining Right.
Entered into a PGM (Platinum Group Metals) heads of agreement (HOA) with Hernic Ferrochrome Proprietary Limited (Hernic) for the processing of its PGM-containing surface material estimated in excess of 3.3 million tonnes. The HOA with Hernic significantly enhances Jubilee’s access to platinum containing surface material which is in addition to the platinum containing surface material secured at ASA.

Both the Hernic and the ASA platinum processing projects placed on accelerated project schedules targeting to be fully operational during 2016.

Chief Executive Leon Coetzer commented:
“We are delighted with the continuing progressive results, both operational and financial, from our Middelburg operations.

“Jubilee is firmly focussed on the execution of its surface platinum processing projects as we accelerate the Company into a position where we are a significant producer of our own platinum group metals. The recently reported acquisitions and agreements are transformational and will make Jubilee a significant player in the platinum arena. It is expected that our new projects will be executed and in commercial production during 2016. The Jubilee mission is strengthened and supported by its ConRoast capability which is a door opener when competing for projects and provides us with multi opportunities for the rapid growth of the Jubilee Mines-to-Metal mission.”

Under the HOA with Hernic Jubilee has been appointed as the exclusive processor to beneficiate both Chrome and PGM’s from the surface material estimated at more than 3.3 million tonnes of platinum containing material at surface. The targeted platinum process facility of chrome tailings will potentially be the largest of its kind in South Africa.

The ASA platinum processing project from chrome tailings progressed well with the project engineering execution program well advanced. Both the Hernic and ASA platinum processing projects have been placed on accelerated project schedules targeting to be fully operational during 2016.

The Tjate mining right application has further progressed with a formal communication received by the DMR requesting guarantees to be provided for the Tjate Rehabilitation Fund.

The Middelburg Operations sustained its earnings despite a shortened production period in December due to the early closure of its key clients over this period.

Revenue for the six months ended 31 December 2014 increased by 22% to £2.8 million (2013: £2.3 million). In ZAR terms revenue increased to ZAR 49.4 million (2013: ZAR36.11 million) supporting an increase in gross profit to reach 48% thus achieving its targeted gross profit margin of 38%.

Gross profit increased by 34% to £1.3 million (2013: £0.97 million) – supporting the sustainable revenue growth over the last two reporting periods. In ZAR terms gross profit increased to ZAR 23.7 million (2013: ZAR 15.5 million).
The increase in the gross profit margin was achieved by the continued implementation of a process review and optimisation strategy. This successful strategy has led to a reduction in electricity used per tonne of metal produced, of approximately 16%, thereby enabling increased sale of power to the national power grid of South Africa (Power Utility).

As previously announced the Company concluded extended smelter-recipe optimisation test work on platinum-containing waste material secured for possible smelting at its Middelburg Operations. A further trial smelt was concluded in February 2015. The data from the trials will be used to assess the degree of variability and, if warranted, move forward to commence processing of an estimated 85 000 tonnes of this waste material. The Company expects the final results from this work to be concluded shortly.

The Company, post the period under review, has entered into discussions with the Power Utility for both the increase of power sales from the Company’s power plant as well as extending its current short term power purchase agreement with the Power Utility to a minimum period of 3 years, with the option to extend this period to five years. The Company expects to conclude its discussions with the Power Utility in Q2 2015.

Further to the conclusion of the HOA with Hernic, the surface materials have been drilled with 1.7 million tonnes being classified as a Measured Resource, under the SAMREC code, in a Resources Statement produced by SRK Consulting. A further estimated 2.5 million tonnes of material was drilled by Hernic.

The targeted PGM processing plant for the recovery of the chrome and platinum at Hernic will be the largest of its kind in South Africa.

Jubilee appointed an engineering and consulting firm for the vetting of the bankable feasibility study as well as the detail design and engineering drawings for construction of both processing plants.

The Company made good progress in securing funding of the construction and commissioning of the projects expected to commence in H2 2015. The Company continues to engage with project funding institutions and will provide further updates once concluded. The combined projects will take Jubilee to a targeted processing of approximately 80 000 tonnes per month of platinum-containing surface material.

Tjate, the Company’s targeted 70 million 4E PGM ounce platinum project, has received formal communication from the DMR requesting a financial guarantee in support of its operational rehabilitation, which is estimated at R27 million, as contained in Tjate’s Environmental Management Programme (Guarantee). This, traditionally, is the final request by the DMR prior to issuing a Mining Right and brings Tjate closer to the concluding the R75 million (GBP 4.1 million) Quartzhill sale (a non-core portion of the Tjate project, which lies outside of Tjate’s targeted mining activity areas) to a subsidiary of Anglo Platinum.

The Company has applied to a major insurance company for the provision of the Guarantee. The application is currently under review and an outcome is expected before the end of Q1 2015. Jubilee, together with Anglo Platinum, hosted a further community liaison meeting concluding the consultation required for the submission by Anglo Platinum of the application to the DMR for the ownership transfer of Quartzhill, in terms of Section 102 of the Mineral and Petroleum Resources Development Act 28 (2002).

Dear Shareholder,
My last Chairman’s report expressed some optimism for the platinum price which I am afraid at the time of writing this interim overview, has not materialised. I do however remain firm in my belief that the fundaments of the Platinum market remain supportive of an improved platinum price.

The executive team through their efforts has made the company’s prospects for 2015 very exciting. We have reported the Hernic Heads of Agreement which targets the processing of the platinum containing surface material to recover the platinum and chrome for mutual benefit.

The ASA metals tailings project design phase has been completed and it is expected that construction of both projects will commence in the year and become operational during 2016. The combined platinum production from these two operations could amount to some 40.000 oz per year on a steady state basis and both projects have the benefit of current arising’s which will provide flexibility and extend mine life.

The Middelburg Operations are operating profitably and are attracting much trade interest on both a separate parts and combined basis. A sale of these assets, if completed, would likely be sufficient to finance our tailing development and progress the Company into its stated mission of a platinum producer. The Board will consider any approaches and report back to the shareholders when appropriate.

The sale of the Tjate Quartzhill is still progressing favorably and all the necessary meetings and consultations have been held. The Board envisages that completion could be within the first half of 2015 although timing of completion is not entirely within the control of the Company.

The Company continues to review more tailings projects and other business opportunities consistent with our stated goal of mines to metal. In essence, the Company is in the consolidation stage and will spend 2015 building new facilities, which on completion, will be a game changer for the company and our loyal and patient shareholders.

We continue with our technical investigation work on the nickel tailing project in Australia and are extremely encouraged by our progress.

As a general comment on the resource sector and in particular the smaller companies I see very little change in investor appetite, especially in the exploration and early stage arena. Companies such as Jubilee, who are developing tangible projects, are being financed but again with more difficulty than normal. We continue to believe, however, that the need for all commodities will re-emerge and money will be channeled to the pioneering sector of the industry.

Colin Bird
25 March 2014

The full UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2014 are available in the Financial Section of this website.