Jubilee Metals Group PLC (LON:JLP), a leader in diversified metals processing, with operations in Africa, has provided an update on its South African operations and its Zambian projects for the quarter ended 31 March 2023.
Q3 FY2023 OVERVIEW
Operations
- Lost time injury frequency rate (LTIFR) of 1.0 in South Africa; LTIFR of 2.3 in Zambia
- 11 437 PGM oz were sold with PGM operations performing on target recording 9 019 PGM oz, from own operations, plus an additional 2 418 PGM oz, through the sale of stock under its JV Partnership agreement
- Chrome production of 310 721 tonnes, remains on track to reach full year guidance of 1.2 million tonnes
- Contribution from chrome by-product credits to the PGM operations more than doubled on the back of stronger chrome production with cost per PGM oz (after chrome by-product credits) dropping to US$383 per PGM oz
- Upwards momentum in platinum and palladium prices during the current period, with chrome and copper prices remaining resilient
- Southern Copper Refining project ramp-up resumed end of February, with a stable supply of water and power fully restored
- 494 tonnes of copper sold with a further 202 tonnes of equivalent copper held in copper concentrate and metal as stock at the end of the period
- The flexibility of Sable Refinery offers the ability to pivot between copper and cobalt production to rapidly respond to changing market fundamentals. Flexibility used to maximise copper equivalent production units
o Copper production prioritised due to cobalt prices reducing by 76% from the year’s high
o 110 tonnes of Cobalt hydroxide produced prior to pivoting to copper with a further 70 tonnes of equivalent cobalt units held in stock
Strategy and growth projects
- Good progress made with discussions to secure a further PGM processing footprint in the Eastern Limb, targeting an additional 25 000 PGM oz per annum and expected to commence construction in Q4 CY2023
- Ramp-up of copper operations at Roan Concentrator in Zambia progressing well with full output now expected in May 2023
- Final design reviews for the Northern Refining Strategy are underway to confirm the implementation schedule and required investment with further information to be provided to the market by the full year close in June
Full year Guidance FY2023
- PGM oz guidance remains unchanged at 38 000 PGM oz with the potential of upwards revision depending on South Africa’s power supply outlook
- Chrome operations expected to exceed guidance of 1.2 million tonnes of chrome concentrate supported by stronger chrome prices during Q3 FY 2023
- Copper guidance remains unchanged at 3 000 tonnes
STATEMENT FROM LEON COETZER, CEO:
“Our South African operations continue to deliver a strong performance recording 9 019 PGM oz from own operations and 2 418 PGM oz through our JV partnership agreement, for the quarter January to March. The ounces sold under the JV agreement stem from excess stock held at Inyoni with its capacity fully utilised under the current agreements. This places our South African operations on track to meet and potentially exceed the full year guidance of 38 000 PGM oz. Our chrome operations once again exceeded its operational targets recording 310 721 tonnes of chrome concentrate and are therefore expected to exceed our full year guidance of 1.2 million tonnes. The continued supportive chrome prices over the past quarter translated into a more than doubled chrome by-product credit in our PGM business, which calculates to a cost per PGM oz of US$383. This confirms the strength of the South African operation’s integrated chrome and PGM business model.
“The ramp-up of operations at the Roan copper concentrator and integration with the Sable refinery resumed from the end of February and recorded 494 tonnes of copper units sold for Q3 FY2023 with a further 202 tonnes of copper held in stock at Roan. The leadership of our Zambian operations team has been strengthened to ensure that the team is better structured to deliver on the expected performance targets, with results already seen.
“Final design reviews for our Northern Refining Strategy are underway to confirm the implementation schedule and required investment. I hope to provide further clarity on this at the completion of the revised capital program which is expected by the full year close in June.”
KEY OPERATIONAL NUMBERS
| COMBINED OPERATIONAL PERFORMANCE | Unit | 3 months to31 Mar 2023 (Q3 FY2023) | 6 months to31 Dec 2022 (H1 FY2023)* |
| Unaudited | Unaudited | ||
| KEY UNITS OF PRODUCT | |||
| PGM ounces: | |||
| – Inyoni Facility | Oz | 9 019 | 18 208 |
| – Third party JV | Oz | 2 418 | – |
| Total PGM ounces | Oz | 11 437 | 18 208 |
| Chrome tonnes | Tonne | 310 721 | 634 111 |
| Copper tonnes | Tonne | 494** | 915 |
| Copper tonnes held in stock | Tonne | 202 | 280 |
| UNIT REVENUE | |||
| PGM revenue per ounce | US$/oz | 1 285*** | 1 453 |
| Chrome revenue per PGM ounce | US$/oz | 2 317*** | 2 292 |
| Copper revenue per tonne | US$/t | 8 459**** | 7 953 |
| UNIT COST | |||
| Cost per PGM ounce (after chrome by-product credits) | US$/oz | 383*** | 608 |
| Cost per copper tonne | US$/t | 6 236**** | 6 468* |
| UNIT EARNINGS | |||
| Earnings per PGM ounce | US$/oz | 902*** | 845 |
| Earnings per copper tonne | US$/t | 2 223** | 1 485 |
* Numbers are as per the half year operational update prior to capitalisation of proportional Roan output
** Includes total copper tonnes sold inclusive of Roan produced tonnes which are capitalised prior to full commercialisation of the project expected by end May 2023
*** PGM cost, revenue and earnings are accounted for based on the combined 11 437 PGM oz
Total chrome credits account to US$402 per oz of total PGM oz sold during the period. Inyoni unit cost before chrome credits were US$708 per PGM oz
**** Copper revenue and cost represent total copper tonnes sold and include capitalised cost of Project Roan
SOUTH AFRICA
Jubilee’s Inyoni Facility continued to deliver a strong performance in line with expectations. The Inyoni operations achieved 9 019 PGM oz for the quarter (100% from own operations) and additionally, sold the equivalent of 2 418 PGM oz from excess feedstock through its JV partner agreement. At the Company’s Inyoni operations, the operational cost remained tightly under control despite the inflationary pressure and benefitted from the chrome offset on the back of the strong performance.
The chrome operations, as a by-product of the PGM operations, continued to perform, delivering 310 721 tonnes of chrome concentrate over the period against a targeted 300 000 tonnes. This strong performance coupled with increased chrome prices during the past quarter, resulted in a more than doubling of contribution from chrome credits towards the PGM operations, equating to US$402 per PGM oz, and resulting in a cost per PGM oz (after chrome by-product credits) of US$383 All in unit cost for the Inyoni operation inclusive of feed material purchases and before accounting for the chrome credits, totalled US$708 per PGM oz.
Chrome prices remain robust with strong demand from China coupled with constrained supply. PGM basket prices remained lower at US$1 297 per oz net of all refining charges.
As previously announced, Jubilee has made good progress with discussions to secure a further PGM processing footprint in the Eastern Limb of the Bushveld complex (the north-eastern region of South Africa’s chrome and PGM mining region), with final design reviews completed for the chrome beneficiation facility that will precede the PGM facility in the Eastern Limb. The Company targets to commence with the construction of the chrome beneficiation circuit as soon as regulatory approvals are secured, which is expected during Q3 of the 2023 calendar year. The construction of the circuit is budgeted to be completed over a six-month period. The Eastern Limb PGM facility offers the opportunity to further increase Jubilee’s PGM operational footprint by 25 000 PGM ounces.
ZAMBIA
Jubilee’s 780 000 tonnes per annum Roan copper concentrator forms part of its fully integrated Southern Copper Refining Strategy which integrates the Sable Refinery and the Roan Concentrator with a total capacity of 12 000 tonnes of copper per annum.
At the end of February, with the power and water disruptions across Zambia now resolved, Project Roan re-commenced with ramping up to full production and commercialisation of the Southern Copper Refining project. The project sold 494 copper tonnes over the period with a further 202 tonnes of equivalent copper contained in copper concentrate and copper cathode. To date, a total capital investment of US$48.2 million has been made for the construction, implementation, commissioning and ramp-up of the integrated Roan project towards reaching commercialisation. Upon reaching commercial production, the Roan copper concentrator is expected to contribute 550 tonnes of copper per month to the production of the Sable Refinery with a further 130 tonnes per month of copper from third party supplies.
As announced on 20 March 2023, the upgrade of the power and water infrastructure at Project Roan offered the potential for the simplification of the Northern Copper Refining Strategy by utilising Roan’s expanded infrastructure to establish a central copper concentrating hub at Roan which would significantly reduce the required capital investment and project timelines.
The Company will provide further clarity on the expected capital investment and updated timelines for the implementation of the Northern Copper Refining Strategy at the completion of the revised capital program which is expected by the end of the current reporting period.
At Sable, Jubilee Metals successfully completed the first cobalt production runs from waste and looks to increase the capacity to be able to produce 450 tonnes per month of cobalt hydroxide (125 tonnes of contained cobalt) from recycled waste alone by the end of May 2023. This additional capability offers Jubilee the flexibility to pivot between copper and cobalt production guided by prevailing market conditions. Cobalt prices have depreciated sharply over the period with cobalt hydroxide prices reducing by 76% from its highs during April 2022. Cobalt production has therefore been halted and will resume once the market displays signs of recovery.
