Diversified metals processing company Jubilee Metals has announced a significant new partnership agreement for its platinum group metal (PGM) and chrome operations in South Africa.
This partnership will expand the company’s operational chrome footprint and enhance its processing capacity.
“This new partnership agreement presents a more integrated long-term relationship with an existing chrome producer that will offer a stronger integration of the processing solution with the source of the material, ensuring a long-term stable production profile.
“Under this new template agreement, Jubilee is offered much greater exposure to the earnings derived from the sale of chrome concentrate,” Jubliee CEO Leon Coetzer says.
Through this agreement, Jubilee will augment its chrome processing capacity by an additional 360 000 t/y. This expansion aims to target an extra 200 000 t of chrome concentrate and 10 000 oz of PGMs feed to Inyoni.
The partnership also establishes a long-term relationship with a producing mining operation located on the western limb of the Bushveld Complex.
The terms of the agreement require Jubilee to upgrade its existing brownfield processing facility at the Inyoni mine. The upgrade will be accomplished through the retrofitting of Jubilee’s process solution.
The goal is to achieve a processing capacity of 360 000 t/y of run-of-mine (RoM) by the end of June.
The accelerated upgrade of the plant has already begun, using the available processing infrastructure at Jubilee's current chrome operations.
Jubilee also has the option to expand the processing facility further, with the potential to reach capacity of 720 000 t/y, resulting in an expected production of 390 000 t/y of chrome concentrate.
Jubilee expects to invest $8-million to complete the plant and says this will be funded through the company's own cash flows and balance sheet.
The agreement will lead to an increase in Jubilee's potential earnings per tonne of chrome concentrate produced, offering a five-fold increase over existing toll treatment terms. The company says this is a significant development, considering toll agreements currently yield a 4% margin at current prices.
The agreement aligns with the company's growth targets, Coetzer says.
“We aim to expand our South African operational footprint by 65% over the next 24 months to reach nearly two-million tonnes of chrome concentrate annually,” he points out.
Jubilee believes its strategy to produce a diverse basket of commodities is further supported by the robust prices of chrome, which remain elevated, effectively balancing weaker PGM prices.
Additionally, Jubilee has been actively implementing emergency back-up power at its operations, which will ensure 60% of its total chrome processing capacity is equipped with reliable power supply by the end of June. This power supply is crucial as it provides the necessary feed to the PGM operations, ensuring continuity and efficiency in production.
“At our Zambian copper operations, current expansion continues to progress and remains in line with guidance. I look forward to providing further detail on the implementation of the Zambian copper strategy in due course as the results from the testing and design work are finalised,” Coetzer noted.
Jubilee’s chrome operations in South Africa play a key role in driving the performance and growth of the company’s PGM operations. Chrome is recovered first from the chrome and PGMs-bearing ore before being processed further to recover the PGMs at the Inyoni facility.
To date, Jubilee has contracted its chrome operational capacity predominantly on a fixed chrome margin contract by tolling various chrome producers’ materials while retaining the majority of the earnings from the PGMs recovered.
Jubilee intends to position itself as a stronger participant in the revenues from the sale of the produced chrome concentrates. This will offer Jubilee greater exposure to the chrome market fundamentals, while retaining the protection of the increased processing efficiencies and the revenues of the PGMs recovered from the tailings of the chrome facilities.
The key term of the new agreement establishes a six-year initial partnership that may be renewed for a further four years. Under the terms of the agreement, Jubilee is appointed as the exclusive process solution provider and committed to retrofit and operate an existing 360 000 t/y chrome processing facility, located adjacent to the chrome ore producer, while holding the option to expand the operation to a 720 000 t/y facility.
Jubilee plans to complete the expansion to 720 000 t/y within 12 months of starting operations at the retrofitted facility. The PGMs-rich tails produced will be processed at the expanded Inyoni facility.
Under the new agreement, Jubilee will process the RoM ore and produce chrome concentrate and a PGMs-rich tailings. The earnings derived from the sale of the chrome concentrate and PGMs produced from the PGMs-rich tailings, will be allocated based on the majority of the PGM earnings retained by Jubilee while participating in the chrome earnings at a more significant level.
Jubilee has recently completed the initial retrofitting of the 360 000 t/y facility to resemble Jubilee’s existing operations and has started the commissioning of the facility.
The Jubilee projects team expects to reach the initial 360 000 t/y within 12 months, with the combined potential to add a further 390 000 t/y of chrome concentrate, thereby increasing Jubilee’s total potential to 1.4-million tonnes a year.
