Jubilee Platinum Annual Report for year ended 30 June 2012

AIM: JLP
JSE: JBL
Registration number: 4459850
ISIN GB0031852162
27 September 2012

Jubilee Platinum PLC
(“Jubilee” or the “Company”)

Reviewed provisional condensed consolidated financial statements for the year ended 30 June 2012

The Board of Jubilee Platinum Plc, the AIM and JSE listed „mine-to-metals‟ exploration and development company (“Jubilee” or “the Company” or “the Group”), is pleased to announce the results for the year ended 30 June 2012.

Highlights in the period under review

  • Jubilee’s subsidiary company, Tjate Platinum Corporation (Pty) Ltd (“Tjate”), submitted a mining right application for its flagship Tjate Platinum Project located in the Limpopo province of South Africa
  • Tjate received a ZAR 75 million (£6.250 million) cash offer for the Quartzhill farm portion of the Tjate Platinum Project from a major mining company
  • Jubilee received a Letter of Intent from Northam Platinum Limited (“Northam”) to include principles of financial terms for a ConRoast agreement
  • Jubilee was awarded the right to recover platinum group metals (“PGMs”) and base metals from more than 800,000 tonnes of platinum-bearing chrome tailings on surface at the Dilakong Chrome Mine
  • The Company‟s subsidiary Jubilee Smelting and Refining (Pty) Ltd‟s (“JSR”) smelting operations at Middelburg commenced hot commissioning of the new fully contracted arc furnace
  • Jubilee‟s 51% owned power-generating subsidiary, Power Alt (Pty) Ltd (“PowerAlt”), tendered to supply power to South Africa‟s national power generating company in order to further bolster the Company‟s revenue base
  • The Company continued testwork on its Leinster Nickel tailings project.

Highlights post the period under review

  • The Tjate Board resolved to accept the ZAR 75 million cash offer for the Quartzhill farm and to negotiate a formal sale agreement
  • The Company‟s Middelburg smelting operations continued to increase production reaching a record 905 tonnes of alloy produced in July 2012 thereby achieving overall profitability of the operations for the month
  • PowerAlt was awarded the tender in August 2012 to supply power to South Africa‟s national power generating company and sale of electricity is expected to commence in October 2012, subject to National Energy Regulator of South Africa‟s (NERSA) approval
  • The Company has entered into a binding memorandum of understanding (“MOU”) to acquire an additional 19% interest in its 51% owned power generating company Power Alt by way of cash (ZAR13 139 000) or issue of Jubilee ordinary shares of equivalent cash value at Jubilee‟s election, in three tranches.
  • Jubilee has increased its interest to 100% in its subsidiary Jubilee Smelting and Refining (Pty) Ltd (“JSR”), the holding company of its Middelburg smelting company RST Special Metals (Pty) Ltd (“RST”) via a claims settlement agreement with JSR‟s shareholders under the terms of its Shareholders Agreement.
  • The Company entered into a binding and exclusive MOU to acquire for ZAR 3.5 million cash, a 51% interest in a fully BEE empowered entity, which holds the prospecting rights for PGMs on a portion of a farm located in the western Bushveld of South Africa. The farm includes a PGM-bearing chromite tailings dump estimated to contain a minimum of 500 000 tonnes of material.
  • The Company‟s subsidiary Braemore Platinum Smelters (Pty) Ltd (“Braemore”) entered into an agreement, which provides an exclusive option to purchase platinum-bearing surface assets existing on various mining claims in Zimbabwe.
  • Jubilee was awarded an engineering contract to the value of US $298 350 by an established platinum company to incorporate the ConRoast process as part of their overall project feasibility study
  • In Madagascar, Jubilee entered into a farm-in agreement with IPR Ltd (“IPR”) in August 2012, granting IPR the right to prospect for iron ore on the Company‟s Ambodilafa concession. This agreement permits exploration and drilling on the Ambodilafa project to continue without funding from Jubilee. Jubilee retains all existing rights to the PGMs and non-iron ore commodities under the agreement.

 

For further information, please contact:
Jubilee Platinum plc
Colin Bird/Leon Coetzer/Andrew Sarosi
Tel +44 (0) 20 7584 2155 / Tel +27 (0) 11 465 1913/+44 (0) 1752 221937

finnCap Ltd
Matthew Robinson/ Ben Thompson – corporate finance
Joanna Weaving – corporate broking
Tel +44 (0) 20 7220 0500

Shore Capital Stockbrokers Limited (Joint Broker)
Jerry Keen/ Edward Mansfield
Tel: +44 (0) 20 7 408 4090

Sasfin Capital
Leonard Eiser /Sharon Owens
Bishopsgate Communications
Nick Rome/Anna Michniewicz/ Ivana Petkova
Tel: +44 (0) 20 7562 3350

Chairman‟s Report

Dear Shareholder
Jubilee Platinum Plc made significant progress in its strategy of building a mine-to-metals company during the financial year under review. Jubilee has continued to grow its revenue base with the commissioning of a fully contracted arc furnace. Jubilee increasing its access to on-surface platinum containing material through the successful tender to process the Dilakong Chrome tailings material. The Company‟s results highlight the growth in revenue post the commissioning and continued ramp-up of the new furnace at the Middelburg smelter operations.

The key challenges faced by Jubilee remain external and are not confined to Jubilee or indeed the resource sector. Specific to the South African platinum industry are the problems of poor demand for platinum, high labour costs and strikes, community dissatisfaction and difficult technical conditions.

Jubilee, to a large extent, has avoided these problems and our dump and small mining strategy gives us many advantages within this sector. ConRoast technology unlocks most of these advantages since our ability to handle PGM concentrates with high chrome makes us unique in the industry. Similarly, we do not employ a large workforce thereby reducing our risk to complex labour management issues and potential strikes.

During the period under review, we have acquired the PGM processing rights to a large surface tailings dam, advanced our smelter division to profitability and applied for a mining right for the Tjate Platinum Project. Discussions against our memorandum of understanding with Northam continue and numerous surface material and dump opportunities are being presented and evaluated.

The Company‟s corporate structure has been restructured to allow it‟s subsidiaries to project finance each operating unit either by conventional loans or our preferred route, the accommodation of a strategic investor. The Company is in discussions with several financial institutions for project financing packages in each subsidiary; the objective being to drive growth in its projects and reduce reliance on issuing of Jubilee shares.

Platinum as a precious metal has developed a price link to gold but unlike the last decade has failed to maintain a 15-20% premium against that metal. The Board believes the current gold prices are a speculative distraction from the platinum supply/demand fundamentals, which are being neglected. The Board believes that modest global industrial growth will lead to shortages of platinum and commentators suggesting oversupply have simply got it wrong. Modest demand will put a focus on the various problems facing the South African platinum industry and we expect considerable platinum price gains before the calendar year end. Our strategy of low cost operations focused on platinum-bearing chrome and already mined dumps should allow us to take advantage of any upsurge in the price of platinum.

The Group‟s revenue up to Dec 2011 equalled £ 1.316 million and £ 3.725 million for the full period to June 2012. The loss for the year after taxation was £8,384,000 (2011: £7,589,000) of which £2,902,000 (2011: £2,499,000) relates to depreciation and amortisation. The Group‟s loss per share was 2.61 pence (2011: 2.67 pence). A share based payment charge of (£275,000) (2011: £766,000) is included in the Group Statement of Comprehensive Income.
I would like to thank my fellow directors, management and employees for their outstanding efforts in yet another difficult year.

Colin Bird
Non-Executive Chairman
27 September 2012

 

The full Reviewed provisional condensed consolidated statement of comprehensive income for the year ended 30 June 2012 is available in the Financial Section.