Jubilee Management Update



 

10 November 2010
AIM: JLP
JSE: JBL
Registration number: 4459850
ISIN: GB0031852162

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

Jubilee Management Update

 

Jubilee is pleased to provide an update on the significant progress made by the Company.

Key Progress Areas:-

  • Acquisition (70%) of Middelburg processing plant completed with option to acquire remaining 30% shareholding
  • Commenced processing of ferro-alloys and ferro-silicon to realise short-term cash flow
  • Final ConRoast demonstration concluded in March 2010 returns significant income to the Group
  • New ConRoast commercial facility on track to commence smelting in Q2, 2011
  • Imminent conclusion of acquisition of a gas-fired generator providing own on-site power and potential for growth as a standalone electricity supply business
  • Extended Framework Agreement with Sylvania Resources to 2011 to facilitate conclusion of smelting and refining feasibility study for its northern limb project
  • Extended Memorandum of Understanding (MOU) with Northam Platinum to January 2011
  • More than 90% of the additional scheduled metres for Tjate project’s Phase 1 prefeasibility drilling completed
  • Tjate project’s environmental (winter phase) and social baseline report completed
  • Contract awarded for drilling Ambodilafa nickel project in Madagascar

Leon Coetzer, CEO said, “Jubilee is committed to the delivery of its listed projects.  The implementation of the new ConRoast facility is progressing well and the project team is driving hard to secure all long lead items to adhere to the project timelines.  We are pleased with the results achieved thus far from the drilling program on Tjate, which continues to illustrate the quality of this asset.  Our near term deliverables are clearly set on the commissioning of the new ConRoast Facility and delivering the feasibility study of Tjate while we continue to grow early revenues from our Middelburg smelting operation.”

 

Middelburg Facility

Jubilee acquired a 70% shareholding in the Middelburg ferro-alloy smelting plant earlier in 2010 to expedite the construction of its ConRoast platinum processing facility. The key features of the existing Middelburg plant are: –

1.    Strategically located in the eastern region of South Africa near the emerging new platinum mines with easy access to a national highway for ease of transport;

2.    Secure own power available on-site to meet the requirements of the expanded processing facility;

3.    Existing smelting infrastructure to support the expansion of the processing facility to include the ConRoast Process;

4.    Existing platinum process licences; and

5.    The potential ability to derive early revenue from the processing of ferro-alloys, which are complementary to the Jubilee processing division.

 

Ferro-Alloy Smelting

The Jubilee enhanced management team of the Middelburg ferro-alloy smelting plant has been successful in attracting profitable smelting contracts to utilise the existing smelting infrastructure.  A strong demand for the alloy smelting facility continues to drive the revenue achieved from the existing facilities. Although not the core reason for the acquisition by Jubilee, the existing alloy smelting facility is targeted to be profitable by the end of November 2010.

 

New ConRoast Facility

The key process components of the ConRoast facility include concentrate drying and roasting followed by a reductive smelt of the concentrates to form a platinum-rich iron alloy for further refining.

The Company undertook an initial scoping and engineering study to review the process design, equipment layout, capital estimate and execution time for the implementation of a ConRoast processing facility at the Middelburg site. Following a favourable review, the Jubilee board approved the execution of the project on an accelerated time line.  The Company awarded Tenova Pyromet the contract to conclude the detailed engineering and design of the ConRoast facility, the completion of which is scheduled before end 2010.  All long lead items have been identified with the furnace outer shell and electrical transformer being critical path items, commitments for which are expected by year-end. Smelting of platinum concentrates and ramp-up of the project is projected to commence during Q2 2011.  These time lines are dependent on delivery commitments being met for the furnace shell and electrical transformer.

The location of the previous ConRoast demonstration furnace within a research and development environment restricted Jubilee’s ability to operate the furnace as a commercial entity due to the research establishment’s high fixed cost structure. Jubilee concluded its industry demonstration trials at Mintek’s research facility during March 2010. This highly successful trial was run over an eight-month period treating high chrome-containing platinum concentrates. The trial was designed to showcase the robustness of the ConRoast process when treating material with a diverse compositional range of chrome and platinum group elements (PGE).  The trial was operated on a toll smelting agreement (fixed charge per ton smelted) with a performance payment based on achieved recoveries of PGE’s in excess of the industry targets. The trial proved financially successful even within the commercial restrictions of a research facility, by achieving exceptional PGE recoveries and returning a potential profit to Jubilee’s subsidiary Braemore Platinum Smelters Pty Ltd in excess of GBP 1 000 000. The new ConRoast facility’s operating cost structure should potentially benefit markedly from being located within an existing industrial smelting infrastructure at Middelburg.

In February this year, Jubilee announced the memorandum signed with Sylvania Resources to review further platinum containing dump retreatment opportunities as well as the processing of concentrates from Sylvania’s northern limb projects in dedicated processing facilities. Jubilee and Sylvania have jointly progressed the feasibility study for the processing of this Northern Limb project. Early indications from this study are very encouraging.

 

ConRoast Future Expansion

In July this year, Jubilee announced an MOU signed with Northam Platinum (Northam) to review and evaluate the feasibility of providing a dedicated ConRoast smelting solution for Northam’s Booysendal Platinum Project. In September, the parties extended the MOU, with both Northam and Jubilee committing to accelerate the execution of the review phase. This review, which will include production and cost forecasts, project-execution time lines and processing capacities, is scheduled for completion in Q1, 2011.

 

Tjate Update

Tjate’s Phase 1 pre-feasibility drilling (Stats T drill pattern), which commenced in July this year is more than 90% complete and is expected to finish before end 2010. The drilling (9 new boreholes and 5 re-entry boreholes to UG2) has to date consistently intersected both Merensky and UG2 reefs. Preliminary results are confirming previous resource estimate PGE grades.  The objective of the Phase 1 drilling is to provide reef continuity information, which not only will facilitate the planning of borehole spacing for the next phase 2 of infill drilling for upgrading the currently inferred resource, but also may allow upgrading of currently inferred areas without a great deal of infill drilling. 

The Company, also as part of the pre feasibility phase, has completed an environmental (winter phase) and social baseline study for the project. The next phase of the feasibility study will include recommended further on-going environmental studies during pre feasibility, the ecology part of which is only possible during the wet/summer months.

 

Madagascar Update

In Madagascar, the drilling contract for the Ambodilafa nickel project was awarded to a local contractor. Mobilisation of the drilling equipment and establishment of the site camp is underway.

 

Outlook

Jubilee’s management are pleased with the progress on its activities. The Company’s immediate strategic focus includes securing additional PGM concentrates for the ConRoast facility, executing both the Framework Work Agreement with Sylvania and the MOU with Northam to a complete concentrate processing agreement, developing increased ferro-alloy production from the Middelburg site to support early revenues and concluding the feasibility study for Tjate.

 

For further information please contact:

Colin Bird/Leon Coetzer                   

Jubilee Platinum plc                           

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

 

Andrew Sarosi          

Jubilee Platinum plc             

Tel +44 (0) 1752 221937    

      

Matthew Robinson/Rose Herbert

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