Operations Update

 

9 March 2011
AIM: JLP
JSE: JBL
Registration number: 4459850
ISIN: GB0031852162


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


Operations Update

 

Jubilee Platinum, the AIM and JSE quoted mine to metal specialist, is pleased to provide the following operations update. 

 HIGHLIGHTS

  • First stage infill drilling programme for the Tjate project completed with exceptional results achieved, final modelling of data in progress;
  • Drill data confirm continuity of Merensky and UG2 Reefs, with significantly improved grade and thickness for the UG2 reef;
  • Application for a Mining Right for Tjate initiated on these encouraging drilling results;
  • Delivery times for long-lead items successfully negotiated to ensure new ConRoast 5MW DC Arc furnace remains on track for Q4 2011;
  • Numerous small-scale near-term mining opportunities are being presented to Jubilee due to its ConRoast smelting capability to treat chrome bearing platinum concentrates;
  • Existing ferroalloys processing infrastructure at Middelburg fully utilised and contributing to short term cash flows;
  • New ferroalloy 5MW AC Arc furnace on target for commissioning in Q2 this year and capacity fully contracted; and
  • Drilling to commence shortly in Madagascar.

 Leon Coetzer, CEO of Jubilee Platinum commented: “It is important to emphasise that we are developing a company capable of achieving a Mine to Metal business strategy. 

 The platinum ConRoast project is on track and will be operational by year end. The Tjate project’s exceptional drill results again confirm it as a world-class asset and continue to present an excellent opportunity to develop a world-class platinum mine.  I look forward to updating shareholders with regard to the Northam discussions and the Sylvania joint project as and when they conclude. The ferroalloy processing division is operating well and generating short term cash flow for the company. Its contribution to the overall business plan will increase with the commissioning of the first 5MW ferroalloy furnace in May this year.

 “We continue to assess numerous small-scale near term mining opportunities, which are being presented to the Companydue to our ability to process platinum concentrates containing high chrome values.  These opportunities are in-line with our focus on building ourMine to Metal business strategy.” 

 

Corporate developments

 Discussions to establish a joint venture to evaluate the construction of a new DC Arc furnace facility using ConRoast technology to treat a portion of Northam Platinum’s platinum group metal (“PGM”) concentrate have advanced under the current Memorandum of Understanding, details of which, when concluded, will be released to the market.

 The joint project with Sylvania Resources has progressed on schedule with all roasting and smelting trials concluded as specified within the scoping study.  The PGM-rich iron alloy from these trials has been couriered to Canada for final CVMR refining trials.  The results from these trials will form the basis of the scoping study. 

 Numerous small-scale near term, mining opportunities are being presented to Jubilee due to its ability to process platinum concentrates containing high chrome values. Jubilee is reviewing these opportunities to enable processing of own platinum concentrates through its Middelburg facility.  Processing of own platinum concentrates significantly enhances the business model for Jubilee.  Further detail on these opportunities will be released to the market on conclusion of the current review.

 

Middelburg Processing Facility

 Jubilee has made significant progress in the implementation of its mine to metal business strategy.  The Company is implementing two distinct business strategies at its Middelburg processing facility:

  • platinum concentrate processing division operating under Braemore Platinum Smelters (Pty) Ltd, a wholly owned subsidiary of Jubilee; and
  • ferroalloy processing division, operating under the company RST Metals (Pty) Ltd, a wholly owned subsidiary of Jubilee Smelting and Refining (Pty) Ltd (formerly Thos Begbie Holdings).

 

Platinum Concentrate Processing Division

 Pyromet Tenova has been formally appointed to support Jubilee with the execution of the 5MW DC Arc Furnace for the ConRoast platinum project.  Pyromet Tenova is an internationally recognised company specialising in the execution of pyrometallurgical (smelter) projects.  The appointment falls in line with Jubilee’s strategy of outsourcing specific technical roles to established industry leaders to enhance the Company’s ability to execute the projects to set deliverables.

Improved delivery times for key items on the critical path of the ConRoast project have been successfully concluded to ensure the project remains on target and orders will be placed on receipt of written confirmation of these delivery times.  Jubilee has concluded the submittal of all relevant environmental applications to ensure the project remains on track.

 This 5MW ConRoast furnace forms part of the 2nd phase of the Middelburg facility expansion and is scheduled for completion towards the end of 2011.  This facility continues to enjoy strong support from the industry.

 

Ferroalloy Processing Division

 Jubilee has fully contracted the existing smelting capacity at Middelburg utilising the existing processing infrastructure – resulting in increased short-term cash flow. As such it is able to process various ferroalloys including ferronickel and ferrosilicon profitably while continuing with the expansion of the processing facility to include the ConRoast processing plant.

 The current strong demand for the processing of ferroalloys, in particular ferronickel motivated the decision to construct a new 5MW ferroalloy AC Arc furnace at Middelburg.  This builds upon the existing two 2.5MW AC Arc furnaces that are currently operational on site. 

 This 5 MW furnace will form part of the first phase of expansion at the Middelburg ferroalloy smelting facility with commissioning targeted in May 2011. This furnace will be an AC Arc furnace to capitalise on existing electrical infrastructure including available transformers, thereby avoiding the long delivery period associated with a DC Arc transformer.

  

Tjate Project

 The Tjate project has completed its stage one infill drilling programme with results confirming the previous Merensky reef grades and showing an improvement in 4E (platinum palladium rhodium and gold) grade and reef thickness over that previously obtained for its UG2 reef. 

 During February 2011 the Company completed its first stage 9-borehole infill-drilling programme. The objective of this programme was to confirm the continuity of the Merensky and UG2 reef structures and to establish the drill spacing necessary to complete stage two of the drill programme so as to upgrade the resource estimate category. Five of the boreholes in this programme that were previously drilled to Merensky Reef were extended to UG2.

 The results of this drilling are shown in the tables below with the weighted average results of previous drilling and all drilling to date.

 

Merensky Reef Infill Drilling Results

Merensky Best Mine Cut Average (80 cm cut-off)

Borehole

Cut Type

Ave 4E g/t

Ave Cu %

Ave Ni %

Ave Width m

DT43

Typical

3.51

0.14

0.24

1.06

DT44

Typical

4.79

0.16

0.27

0.83

DT45

Typical

4.36

0.09

0.15

2.25

DT46

Typical

3.63

0.13

0.21

1.05

DT47

Faulted/Disturbed

3.85

0.004

0.008

1.03

DT48

Typical

4.57

0.21

0.29

0.98

DT49

Typical

4.11

0.15

0.21

1.07

DT50

Typical

5.03

0.15

0.22

1.42

DT51

Typical

3.17

0.11

0.19

1.07

Weighted average Infill drilling

4.23

0.13

0.20

1.20

Previous drilling

4.24

0.11

0.19

1.15

All drilling to date

4.24

0.11

0.19

1.16

 

UG2 Infill Drilling Results

UG2 Cut Averages (Chromitite Only)

Borehole

Reef Type

Ave 4E g/t

Ave Cu %

Ave Ni %

Ave Width m

DT43

Normal

8.40

0.05

0.08

0.89

DT44

Normal

8.01

0.059

0.073

0.69

DT45

Normal

9.30

0.030

0.049

0.67

DT46

Normal

8.28

0.047

0.056

0.73

DT47

Normal

6.72

0.049

0.073

0.47

DT48

Normal

8.92

0.038

0.069

0.63

DT49

Normal

6.94

0.006

0.024

0.80

DT50

Normal

11.26

0.07

0.10

0.97

DT51

Normal

11.93

0.02

0.05

1.25

Weighted average Infill drilling

9.26

0.039

0.064

0.79

Previous drilling

8.35

0.045

0.078

0.60

All drilling to date

8.69

0.043

0.073

0.66

The average infill drilling Merensky results confirmed continuity of both the Merensky and the UG2 reefs. The Merensky results match the previous drilling results while the infill UG2 results show both improved average 4E grade (by approximately 0.9g/t 4E)  and reef thickness over previous results.

 The Company is encouraged by these results to date and has initiated preparation of an application to the Department of Mineral Resources (“DMR”) for a Mining Right under the Mineral and Petroleum Resources Development Act 2002 for Tjate.

 Independent mining industry consultant Snowden is currently modelling the data. These results and their impact on current resource estimate and drill spacing recommendation for stage two are expected to be reported shortly.

 Phase two of Tjate’s three-phase feasibility study is progressing to schedule and completion is targeted for end Q2.

 

Madagascar

 The Company is shortly to commence exploratory drilling on its Ambodilafa concession located centrally in south-east Madagascar.

 Andrew Sarosi, Director of Jubilee Platinum, who holds a B.Sc. Metallurgy and M.Sc. Engineering, University of Witwatersrand and is a member of The Institute of Materials, Minerals and Mining, is a ‘qualified person’ as defined under the AIM Rules for Companies and a competent person under the reporting standards. The technical parts of this announcement have been prepared under Andrew Sarosi’s supervision and he has approved the release of this announcement.

 

 

Contacts

 Colin Bird/Leon Coetzer                   

Jubilee Platinum plc                           

Tel +44 (0) 20 7584 2155 / Tel +27 (0)11 465 1913

 

Andrew Sarosi          

Jubilee Platinum plc             

Tel +44 (0) 1752 221937    

      

Matthew Robinson/Rose Herbert – corporate finance

Joanna Weaving – corporate broking

finnCap Ltd

Tel +44 (0) 20 7600 1658

 

Leonard Eiser /Sharon Owens

Sasfin Capital

Tel +27 (0) 11 809 7500

 

Michael Kinirons/Nick Rome

Bishopsgate Communications Ltd

Tel +44 (0) 20 7562 3350