Jubilee Metals Group PLC (AIM:JLP, JSE:JBL, OTC:JUBPF) has won a new tailings processing deal in South Africa with a chrome miner producing in the Bushveld Complex region.
Through the six-year agreement, Jubilee said it will boost its operational chrome footprint by 360,000 tonnes (t) a year, producing 200,000t of chrome concentrate and 10,000oz of platinum group metals (PGM) to its Inyoni plant.
As part of the deal, Jubilee will upgrade the brownfield plant at the mine at a cost of US$8mln and has the option to double the facility’s capacity to 720,000t.
"Under this new template agreement, Jubilee is offered a much greater exposure to the earnings derived from the sale of chrome concentrate," said Leon Coetzer, chief executive.
"At current market prices, the agreement offers the potential for Jubilee to increase its current chrome earnings margins per tonne of chrome concentrate produced by nearly five-fold compared with the existing chrome toll agreements, which achieve only 4% at today's prices."
Chrome prices remain strong, he added, while backup power has now been rolled out to 60% of the company's chrome operations in South Africa to offset the country’s electricity grid crisis.
The new deal reflects Jubilee's proven expertise in processing, said Coetzer, something that "continues to attract partnerships with large mining companies seeking best-in-class operational processing groups".
"We aim to expand our South African operational footprint by 65% over the next 24 months to reach nearly 2 million tonnes of chrome concentrate annually as we continuously strive to enhance our earnings.
"At our Zambian copper operations, current expansion continues to progress and remains in line with guidance."