Update on Middelburg Smelter


Jubilee Middelburg Smelters achieve new record production rate and Jubilee secures an Equity Financing Facility in support of targeted acquisitions
2 January 2014

Update on Middelburg Smelter

Jubilee, the AIM and AltX quoted Mine-to-Metals specialist, is pleased to announce that the Middelburg Smelter operation has achieved a new record production rate – more than 35 tons of Ferronickel metal within a single 24-hour shift – exceeding the previous record of 26 tons of metal.

This achievement comes following the Company’s recent announcement (dated 23 December 2013) that it had secured funding for the final phase of the smelter renewable program, which includes the expansion of the Middelburg Smelter operation to three operating ARC furnaces.

Two of these furnaces will be dedicated to the production of ferronickel metal and the third furnace to the production of ferrosilicon metal, thereby increasing the total targeted smelter design capacity to 13,900 tons of metal per annum. All three furnaces have been fully contracted.

With proceeds in place to fund the commissioning of the remaining 3rd ARC furnace at Middelburg, the Board of Jubilee believes that the Middelburg Smelter is in a strong position to enhance its earnings profile.

Equity Financing Facility

With a view to expanding its access to platinum containing material, Jubilee is also pleased to announce that the Company has entered into a £10 million Equity Finance Facility (“EFF”) with Darwin Strategic Limited (“Darwin”). The EFF can be utilised by the Company, at its sole discretion, over a commitment period of 60 months.

The EFF has been secured by Jubilee in support of its Mine-to-Metals strategy and more specifically towards potential acquisitions targeted by the Company in the platinum and other metals industry with a view to fur-ther utilizing the ConRoast process. The EFF will replace the current equity based funding structure held by Jubilee.

EFF Rationale:

Provides Jubilee with a flexible, highly cost efficient source of capital

Allows Jubilee to minimise dilution and maximise value for shareholders when issuing equity

The facility is available should the Company wish to capitalise on further opportunities within the Platinum Sector

Leon Coetzer CEO of Jubilee commented: “We are pleased with the continued improved performance of our Middelburg Smelter operation. This performance, thanks in large measure to the dedication of our production team, illustrates the success of our two-year smelter renewable program.

“We will continue to engage with companies holding platinum-bearing assets near or at surface to grow Jubi-lee’s access to these materials. The EFF funding structure offers the Company the support to access funding when pursuing companies holding such assets.”

Principal Key Terms of the EFF include:

The EFF agreement with Darwin provides Jubilee with a facility of up to £10 million which (subject to certain limited restrictions) can be drawn down at any time over the next five years. The timing and floor subscription price of anydraw down is always at the complete control and sole discretion of the Company. There are no penalty fees payable for not using the facility.

Jubilee is under no obligation to make a draw down and may make drawdowns at its discretion, up to the total value of the EFF, by way of issuing subscription notices to Darwin. Following delivery of a subscription notice, Darwin will subscribe and the Group will allot and issue to Darwin new ordinary shares in Jubilee (‘Ordinary Shares’).

The subscription price for any Ordinary Shares to be subscribed by Darwin will be set with reference to the average of the three lowest Closing Bid Prices in the period following the issue of the subscription notice.
Jubilee is able to specify in each subscription notice a minimum price below which Ordinary Shares will not be issued to Darwin. The Company will have the right (with the consent of Darwin) to modify that minimum price at any time during the relevant Pricing Period.

The number of Ordinary Shares which may be issued under any individual subscription notice may be up to the lower of 25 per cent of the Group’s issued share capital following completion of the relevant subscription, or four times the average daily trading volume of Jubilee’s Ordinary Shares over the 15 trading days preceding the issue of the relevant subscription notice. This may be reduced in certain circumstances, including where the minimum price is not maintained.

The maximum amount of an individual subscription notice may not exceed £500,000 without Darwin’s permission. Darwin is entitled to a commission of up to 5 per cent of amounts subscribed but may agree with Jubilee in lieu thereof for the subscription price for the Ordinary Shares to be discounted by 5 per cent.

There is also an over-allotment facility available to Jubilee, under which the Company may authorise Darwin, at Darwin’s discretion, to increase the amount of the draw down by up to the aggregate undrawn amount under the EFF.
Darwin and Jubilee may mutually agree at the end of the pricing period to a variation of subscription price. This may allow for a larger subscription via any over-allotment facility authorised by the Group.

The issuance of a Subscription Notice is conditional upon the satisfaction of certain Subscription Notice Condi-tions which have been agreed between Darwin and Jubilee. Any subscription notice which Jubilee may issue will only be valid to the extent that it has the requisite shareholder authority to issue the maximum number of Ordinary Shares that Darwin may be required to subscribe under the relevant subscription notice. Darwin and Jubilee may terminate the EFF agreement if certain conditions are not met.

Jubilee Platinum plc
Colin Bird
Tel +44 (0) 20 7584 2155
Leon Coetzer
Tel +27 (0)11 465 1913
Andrew Sarosi
Tel +44 (0) 1752 221937
JSE Sponsor
Sasfin Capital, a division of Sasfin Bank Limited
Leonard Eiser/Sharon Owens
Tel +27 (0) 11 809 7500
finnCap Ltd
Matthew Robinson/Ben Thompson – corporate finance
Joanna Weaving – corporate broking
Tel +44 (0) 20 7220 0500
Darwin Strategic
Anand Sambasivan / Jamie Vickers
Tel: +44 (0) 207 491 6512
Bishopsgate Communications Ltd
Nick Rome/Anna Michniewicz
Tel +44 (0) 20 7562 3350

Notes to Editors
Jubilee Platinum
Jubilee Platinum is focused on growing its earnings profile with a view to developing its Mine-to-Metals strategy.

As such, the Company is focused on leveraging off the ConRoast process with a view to securing access to both platinum-containing chrome rich materials that are at or near surface as well as platinum-bearing waste materials at surface. The ConRoast process remains key to unlocking near-term value and the Company is continually evaluating opportunities that will consolidate its unique application in the industry.

In June 2011, Jubilee commissioned a smelter infrastructure renewable program to both replace out-dated smelter processes and turn its wholly owned subsidiary, Jubilee Smelting and Refining (“JSR”), into a positive earnings company.

The renewable program consists of four phases:-
Phase 1 – Install and commission a new 5MVA continuous ARC furnace (completed);
Phase 2 – Upgrade and expand the metal granulation facility (completed);
Phase 3 – Upgrade the existing 2.2 MVA ARC furnace and supporting off-gas systems (completed); and
Phase 4 – Upgrade the existing 2.6 MVA ARC furnace and supporting off-gas systems (work in progress)

To date, Phases 1 to 3 have been implemented and achieved their stated targets. JSR has consistently achieved increased revenues with improved gross profit margins through each phase of the program.

The final phase 4 of the renewable program will extend the production output of the Smelter operation to an estimated 13,900 tons of metal per annum. This production increase and infrastructure renewal ensures that the Smelter operation is able to achieve sustained positive earnings with the support of the new toll smelting contracts. At the conclusion of phase 4, the Smelter operation will have established itself as a premier smelter of waste material to produce ferrometals based on its patented ConRoast and reductive smelter technologies.

In addition, Jubilee owns 63% of the Tjate Platinum project in the eastern limb of the Bushveld Complex, a project which is independently judged to contain the world’s largest undeveloped defined block of platinum ore. The property covers 5,140 hectares on three farms and the area has been independently appraised to contain a potential net 70 million ounces of platinum group metals (“PGMs”) and gold. This represents the resource targeted by future exploratory and feasibility drilling.