Jubilee Metals Group’s share price shot up 7.7% yesterday on the JSE Thursday morning after an agreement was announced to sell 10 million tons of copper waste, worth about $6.75 million (R127.05m), from the 260 million tons of material to a selected multinational company.
“Under this agreement, Jubilee will gain a detailed insight into the performance of the materials when processed at the partnered company’s existing facilities, which will provide a high degree of confidence in the expected performance of the material if processed in future by Jubilee,” Jubilee CEO Leon Coetzer said in a statement. He did not disclose the name of the multinational company that would buy the copper waste.
The share price traded at 84 cents on the JSE, a price well down from R1.56 per share it traded at a year ago.
Jubilee is a diversified metals processor in Africa with copper operations in Zambia and chrome and PGM (platinum group metals) operations in South Africa.
It had secured exclusive rights to the Large Waste Project for a reduced $18m (previously $30m), and it has until mid-May 2025 to decide whether to acquire the assets and settle the remaining approximate $11.5m consideration, over 12 months.
Jubilee has been conducting due diligence on the project, including sampling campaigns, laboratory test work, and pilot scale trials, the results of which are intended to inform the board’s decision as to whether to exercise the option to acquire the assets.
Jubilee entered the agreement to sell the 10 million tons on the back of encouraging results from the due diligence completed so far,said Coetzer.
“Jubilee’s copper strategy continues to gain further momentum on the back of the restart of its Roan Concentrator processing high-grade copper material, as well as the expansion of its Munkoyo mining operation,” he said.
The Large Waste Project offers “tremendous potential” for Jubilee to significantly expand its copper portfolio in Zambia, said Coetzer.
He said the project had attracted keen interest from both metal offtake-backed funding as well as large multinational copper-producing entities, interested in partnering on the project.
“We have been carefully considering the optimal partner for the implementation of the project, especially following the encouraging results of the due diligence review,” he said.
“The trade of this small quantity of material compared with the size of the asset - less than 5% of the estimated contained material - not only demonstrates the potential value of the asset but also offers Jubilee the opportunity to confirm the technical performance of the material through a large-scale trial,” said Coetzer.
On Monday, Jubilee reported a 51% increase in revenue to $141.5m for the six months to December 31, due mainly to an increase in chrome concentrates production. Group earnings before interest, tax, depreciation, and amortisation fell 6.8% to $13.6m, impacted by softer chrome prices.
The company invested $17.8m ($16.8m) in the expansion of its copper and chrome operations during the six month period. It was sitting with $8.4m ($19.3m) in cash by the end of the six months.
Business Report