Jubilee Metals pleased with first half despite Zambia struggles

15th Feb 2023 08:25

(Sharecast News) - Jubilee Metals Group said in a first-half update on Wednesday that, despite infrastructural challenges in Zambia, its operational performance was broadly in line with management's expected earnings and revenue targets for the period.

The AIM-traded firm said its South African platinum group metals (PGM) and chrome operations delivered strong results, helping to buffer the impact of power and water infrastructure challenges faced in Zambia.

Jubilee's newly-expanded Inyoni Facility in South Africa delivered 18,208 PGM ounces for the six-month period, despite increased power outages at its operations.

Chrome production benefited from the increased capacity, delivering 634,111 tonnes of chrome concentrate, with production on track to exceed full-year guidance of 1.2 million tonnes of chrome concentrate.

The company also used its enlarged chrome processing capacity to accelerate the production of PGM feed material, which increased PGM feed stock by a further 5,016 ounces to better buffer the Inyoni facility against increased power outages.

In Zambia, copper production was down 10% on the previous six months to 1,149 tonnes, with in-process stock from processed material at Roan increasing to about 830 tonnes of contained copper.

The firm said it took corrective action by investing a further $2.5m to address and overcome infrastructure challenges, which delivered an upgraded privately-owned water infrastructure, further upgraded power infrastructure, additional secured power and replacement of damaged equipment.

Jubilee said the upgraded and expanded water and power infrastructure at Roan now gave it the potential to more than double the capacity of the existing 780,000 tonnes-per-annum processing capacity.

Finally, the company said it had updated the implementation of its copper and cobalt expansion strategy to better align the targeted increased operational footprint with the in-country available power infrastructure, leading to the potential to accelerate the roll-out of the Northern copper and cobalt strategy.

The refined strategy, the board said, would allow Zambia operations to maximise the use of available and renewed infrastructure by expanding existing operations such as Roan, offering the possibility to bring forward the delivery of its Northern refining strategy through a centralised operation and reduced capital outlay.

It said the Sable Refinery would initially maximise cobalt production in the short-term to facilitate the targeted expansion of the Roan copper operations, targeting output of 450 tonnes per month of cobalt hydroxide, or 125 tonnes of contained cobalt, from recycled waste alone by the end of May.

"It has been a challenging period during which we have overcome infrastructural related challenges in both of our operating jurisdictions," said chief executive officer Leon Coetzer.

"Reliable power and water supply are two critical ingredients for efficient and stable operations."

Coetzer said the company's ability to leverage its multi-commodity production capability was "vital" in its ability to deliver operational performance and the resulting revenues and earnings.

"We aim to continue to maximise this multi-metal production flexibility and therefore benefit from the cumulative earnings potential it provides."

At 1058 GMT, shares in Jubilee Metals Group were down 16.68% at 9.54p.

Reporting by Josh White for Sharecast.com.