Jubilee Metals Group PLC (LON:JLP), a diversified leader in metals processing with operations in Africa, has announced its audited results for the year ended 30 June 2022 (“FY2022”). Jubilee is also publishing, today, its inaugural Integrated Annual Report. The Company’s evolution over the past 18 months has been primarily facilitated by a £58 million (US$71 million) capital expansion project through which it has successfully funded the acquisition and refurbishment of processing facilities in South Africa’s PGM and chrome-rich Bushveld Complex and the copper-rich Southern extent of Zambia. It has also been aided by the notable expansion of the Group’s client base and the acquisition of new feedstock sources.
This positive trajectory is a foretaste of what is to come to rapidly expand our operational footprint in Zambia and seize further growth opportunities in South Africa while holding the potential to replicate this success across multiple jurisdictions. As Jubilee intends to continue targeting metals that are linked to a low-carbon future, particularly renewable energy production and battery storage, our position and value to the global supply chain will become increasingly entrenched. The successful implementation of the capital programme has reshaped the Company by further diversifying its earnings across metals and jurisdictions and has laid the platform for enhanced growth in the coming financial year.
Key Achievements for FY2022
· Jubilee successfully completed its capitalisation and expansion programme and delivered on its targeted production for PGM (41 586 ounces), chrome (1 222 452 tonnes) and copper (2 604 tonnes) and maintained its zero-fatality rating with an LTIFR of 1.50 in South Africa and 2.90 in Zambia
· In South Africa, construction and ramp-up of the 45% expanded Inyoni operation was completed in March 2022, allowing Inyoni to accept multiple types of feed sources with an annualised capacity of 44 000 PGM ounces and a combined 1.2 million tonnes of by-product chrome concentrate (up 85%)
· In Zambia, the fully integrated Southern Copper Refining Strategy was delivered with the completion of construction of the new Roan copper concentrator and commissioning and ramp-up commencing in July 2022 reaching nameplate throughput rates during September 2022
· The combined investment has resulted in an increase in the tangible net asset value per share of 40% to 4.84 pence for FY2022
· Revenue increased by 5.4% to £140 million (US$186 million), despite the completion of the investment program during the period under review. The early implementation of the new chrome circuit resulted in increased chrome by-product credits (up 101%) contributing to a lower US$ cost per PGM ounce (down 10%)
· Robust balance sheet after fully settling long-term debt of £5.3 million
· Positive net cash position with current assets covering total liabilities by 131%
· EBITDA of £37 million (US$45 million) 25% lower, despite completion of the extensive capital programme alongside production
· Cash from operating activities up 11% showing strong cash flows from operations
Ollie Oliveira, Incoming Chairman commented: “It is an exciting time to join such a unique company at the forefront of extracting metal from waste and perceived waste. The very nature of the Group’s business model means we are in a unique position to clean up historic tailings, and therefore economically benefit all stakeholders. Jubilee has become a global leader in waste and tailings processing.
“The Group has built a very strong track record in South Africa and has started rapidly expanding in both South Africa and now Zambia. This has indeed been a transformative year for Jubilee and a strong growth platform has been created, with exciting projects in both countries for us to pursue.
“Beyond delivering on the medium-term plan of executing the Northern Copper Refining Strategy in Zambia and continuing to expand our operational footprint, we have also focused our attention on addressing improved governance at the board level and the strengthening of risk management along with all the other controls that need to be present in a company that has grown as fast as Jubilee has over the past few years.”
Leon Coetzer, CEO, commented: “The year to June 2022 was a transformative year in Jubilee’s journey. The team has delivered a significantly expanded and further diversified operational footprint. We overcame a number of challenges to execute a highly complex capital expansion programme and established a solid foundation in our pursuit of becoming a global leader in processing and retreating historical mine waste and perceived waste, whilst growing responsibly.
“At the core of the Jubilee story, something I am most proud of is that the solution we offer allows us to not only clean up environmental liabilities such as tailings deposits but in parallel, treat third-party mine feed that ordinarily would be headed to a waste dump.
“I am pleased that we finished the year strongly, generating increased revenue (5.4% higher than the previous year) mostly attributable to the nearly doubling of the chrome operations as a forerunner to the expanded PGM operations at Inyoni, and stronger copper production in Zambia. We have seen positive operational earnings of £45 million (US$60 million) for the year. The 10% drop in unit cash cost to produce a PGM ounce is very significant and is a direct result of the increased contribution of chrome as a by-product increasing by 262% compared to FY2021.
“Importantly, we were able to eliminate £5.3m of historical debt during the year, leaving a robust balance sheet and the financial capacity to pursue further opportunities as we look to expand our copper operations in Zambia.
“In South Africa, we delivered on our strategy to maximise the processing of historical tailings through our own operations. The Inyoni processing facility refurbishment benefited from the scale of operations as best reflected in our second half of FY2022 with earnings per PGM ounce increasing by 20% to US$1 316 from the first half of FY2022. Despite almost completely restructuring Inyoni, production of 41 456 PGM ounces was achieved in FY2022.
“Post year end a significant milestone was achieved in Zambia with our Roan concentrator reaching nameplate capacity, following the successful commissioning and ramp-up of the operations. Considering the operating context which was marred by COVID-19 and supply chain disruptions, this was a remarkable achievement.
“The fully integrated Southern Copper Refining Strategy is a significant step for Jubilee as it diversifies and expands our footprint across commodities and jurisdictions. As significant as our achievements in Zambia have already been, we see the Southern Copper Refining Strategy as a mere demonstration of the potential for a much greater footprint in the country in the years ahead.
“To each of Jubilee’s employees, I say: We have been through a busy year and your tireless efforts and long hours have not gone unnoticed. Both in South Africa and Zambia, you have shown that “The Jubilee Way” is not just a set of words, but something that you have all lived by over the past twelve months, and this has yielded momentous results.
“The future holds tremendous potential growth for our Company as it benefits from the foundation laid during the FY2022 period. I look forward to updating shareholders on Jubilee’s developments.”
GROUP KEY PERFORMANCE INDICATORS
| % change | 12 months to30 Jun 2021 FY2021 | 12 months to30 Jun 2022 FY2022 | Unit | GROUP KEY UNITS OF PRODUCTION | Unit | 12 months to30 Jun 2022 FY2022 | 12 months to30 Jun 2021 FY2021 | % change |
| PGM ounces sold | ||||||||
| (1%) | 35 642 | 35 318 | Oz | – Inyoni | Oz | 35 318 | 35 642 | (1%) |
| (57%) | 14 521 | 6 268 | Oz | – Third party JV | Oz | 6 268 | 14 521 | (57%) |
| (17%) | 50 162 | 41 586 | Oz | Total PGM ounces sold | Oz | 41 586 | 50 162 | (17%) |
| 88% | 1 387 | 2 604 | Tonne | Copper tonnes sold | Tonne | 2 604 | 1 387 | 88% |
| UNIT REVENUE | ||||||||
| (28%) | 2 248 | 1 615 | $/oz | Revenue per PGM ounce | £/oz | 1 215 | 1 670 | (28%) |
| (6%) | 8 657 | 9 210 | $/t | Revenue per copper tonne | £/t | 6 929 | 6 429 | (8%) |
| UNIT COSTS | ||||||||
| (10%) | 456 | 408 | $/oz | Net cost per PGM ounce (after by-product credits chrome) | £/oz | 305 | 339 | (10%) |
| (6%) | 5 076 | 5 386 | $/t | Net cost per copper tonne (after by-product credits cobalt) | £/t | 3 929 | 3 769 | (4%) |
| UNIT EARNINGS | ||||||||
| (33%) | 1 792 | 1 207 | $/oz | Net earnings per PGM ounce | £/oz | 910 | 1 331 | (32%) |
| 7% | 3 582 | 3 824 | $/t | Net earnings per copper tonne | £/t | 2 882 | 2 660 | 8% |
| GROUP KEY FINANCIAL INDICATORS | ||||||||
| 35% | 27 954 034 | 37 643 497 | US$ | Capital spend | £ | 30 993 020 | 20 205 735 | 53% |
| 10% | 37 534 433 | 41 276 419 | US$ | Cashflow from operating activities | £ | 31 005 195 | 27 872 695 | 11% |
| 4% | 178 894 480 | 186 387 702 | US$ | Revenue | £ | 140 006 986 | 132 845 252 | 5% |
| (26%) | 66 401 146 | 48 955 819 | US$ | EBITDA | £ | 36 773 653 | 49 308 827 | (25%) |
| 23% | 4.79 | 5.90 | US cent | Tangible net asset value per ordinary share (pence) | pence | 4.86 | 3.47 | 40% |
COMBINED FINANCIAL AND OPERATIONAL HIGHLIGHTS
Period under review
· Inyoni refurbishment completed on time and on budget from a single feed facility to a multi-feed facility with a 45% increase in annual capacity to 44 000 ounces
· Project Roan reached nameplate production during September 2022 to maintain its design throughput rate of 110 tonnes per hour needed to produce the targeted copper concentrate for refining at the Sable Refinery
· 40% increase in tangible net asset value per share to 4.84 pence for FY2022
· Achieved stated targeted PGM production of 41 456 ounces (FY2021: 50 162 ounces), chrome 1 222 452 tonnes (FY2021: 727 264 tonnes) and copper production of 2 604 tonnes (FY2021: 1 387 tonnes)
· PGM unit cost of production reduced by 10% driven by increased PGM operational footprint and increased contribution of chrome by-product credits
· Group revenue for the year increased by 5.4% to £140 million (US$186 million) (FY2021: £133 million (US$179million)) mostly attributable to the increased PGM ounces produced at Inyoni, higher chrome production and increased copper production from Zambia
· Strong cash flows from operations with cash from operating activities up 11%
· Attributable operational earnings of £45 million (US$60 million) (FY2021: £71 million (US$85 million)) with unit cash cost to produce a PGM ounce reducing by 10% and the contribution of by-product credits increasing by 262% compared to the FY2021
· Equity increased by 52% to £208 million maintaining a strong equity ratio of 72%
· Low gearing ratio of 3.6% compared to 7.7% for the comparative period
· Robust balance sheet after elimination of £5.3m of historical debt
· Positive net cash position with current assets covering total liabilities by 131%
· EBITDA £37 million (US$45 million) (FY2021: £52 million (US$70 million))
Post the period under review
· Southern Copper Refining Strategy continues to deliver with Project Roan reaching nameplate capacity following the successful commissioning and ramp-up of the operations
· Cobalt circuit brought on-line following Roan’s ramp-up completion expecting first cobalt production by end October 2022
Prospects for FY2023
South Africa
· FY2023 offers strong potential for growth in earnings as it benefits from the full exposure of our enlarged South African operations
· The new enlarged PGM and chrome operations have set the platform to deliver 44 000 PGM ounces and 1.2 million tonnes of chrome concentrate per annum from Jubilee’s own capacity. The PGM production benefits from the increased efficiencies of this newly enlarged facility, which is significantly subsidised by the increased chrome production as highlighted by the results for the H2 six-month period
· Management continues to progress discussions to secure a further PGM processing footprint in the Eastern Limb of the Bushveld (north-eastern region of South Africa’s chrome and PGM mining region). We have already secured significant tailings resources with further expansion opportunities in the area. Jubilee is reviewing the option to either secure a decommissioned PGM facility that will be repurposed by Jubilee, or to construct a new facility in the region
· The Company confirms its guidance of 44 000 PGM ounces from its own production for FY2023
· The softening of PGM prices has been buffered by supply constraints with both palladium and rhodium maintaining elevated levels on a historical level. We remain bullish on the PGM basket price with demand expected to increase during 2023 driven by recovering car sales from pent-up sales demand
· Given our flexibility at the newly built Inyoni, coupled with our multiple sources of feedstock, we do have the ability to react quickly and prioritise feed of material that we know has a relatively higher content of a certain PGM that is perhaps experiencing elevated pricing levels at a certain time
Zambia
· In Zambia, the Southern Copper Refining Strategy has adjusted its copper target for the first half of FY 2022 to 3 000 tonnes owing to persistent interruptions in the supply of water and electricity due to aging infrastructure which impacts Roan’s ability to sustain its throughput. As a counter measure, the Company has secured an independent water supply license which enables the Company to implement a dedicated water supply infrastructure
· In addition to this, we look to complete the testing and commissioning of the cobalt circuit on the back of the completed ramp-up of Project Roan offering the potential for significant earnings contribution
· And as significant as our achievements in Zambia have already been, we see the Southern Copper Refining Strategy as a mere demonstration of a much larger footprint in the country in the years ahead, given the vast amount of potential feedstock, our expertise to extract the metals within them, and the brownfield processing capacity that lies idle across the country
· Copper had a very strong year, helping us achieve an average price of US$9 295 per tonne in the period, compared with an average market price of a little over US$8 000 in the prior 12 months. The price has softened into the new year, we remain positive on the fundamentals of a metal that is key to the electrification story going forward
Audit Opinion
The auditor’s report on the annual financial statements of the Group was unqualified and did not contain any statements under section 498(2) or (3) of the Companies Act 2006.
Notice of Annual General Meeting and availability of the Group’s Annual Financial Statements
The Company also hereby gives notice of its 2022 Annual General Meeting (“AGM”), which will be held on Wednesday 16 November 2022 at 11:00 am UK time at the offices of Fladgate LLP, 16 Great Queen Street, London, WC2B 5DG, to transact the business as stated in the notice of AGM. The Group’s Annual Report for the year ended 30 June 2022, along with the Notice of AGM, have been posted to the website, www.jubileemetalsgroup.com.
Salient Dates:
| Shareholders on the register who are entitled to receive the notice of AGM (SA) | 14 October 2022 |
| Notice of AGM posted to shareholders | 25 October 2022 |
| Last date to trade in order to be eligible to participate in and vote at the AGM (SA) | 9 November 2022 |
| Record Date for the purposes of determining which shareholders are entitled to participate in and vote at the AGM (UK)Record date for purpose of determining which shareholders are entitled to participate and vote at the AGM (SA) | 14 November 2022 14 November 2022 |
| Latest time and date for receipt of CREST Proxy Instruction and other uncertificated instructions (UK)Latest time and date for receipt of dematerialised holding instruction and other uncertified instructions (SA) | 11:00 am (UK time) 14 November 202213:00 pm (SA time) 14 November 2022 |
| Annual General Meeting | 11:00 a.m. (UK time) 16 November 2022 |
| Results of the Annual General Meeting released on RNS and SENS | 16 November 2022 |
Integrated Annual Report
The Integrated Annual Report for the year ended 30 June 2022 is also available on the Company’s website today at www.jubileemetalsgroup.com. Physical copies of the Annual Report will be posted to shareholders who have elected to receive them.
