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Jubilee Platinum (LON:JLP) remains committed to the platinum business despite the recent weakness in the price of the precious metal.
The group recently sold its smelting and power generating operations in South Africa and is now fully focused on bringing its platinum tailings projects at ASA’s Dilokong chrome mine and with chrome group Hernic on stream.
Construction of the processing plant at Dilokong is underway, said Leon Coetzer, chief executive.
This will take two stages, with a chrome concentrate plant set to be commissioned early next year to be followed by a platinum circuit later in 2016.
Cost will be around £4.9mln, with Jubilee aiming to get project finance in place both for the ASA and Hernic contracts.
Talks on financing have reach an advanced stage with one bank having received credit committee approval with final confirmation of the due diligence expected shortly.
Coetzer said while conditions in global mining markets remain challenging, the Platinum Surface Projects are robust even at current metal prices as they have no mining cost or associated mining risk attached.
Platinum has dropped 25% to US$895 over the past twelve months and has not been at this level since 2009.
Coetzer says mining is 60% of the cost of most platinum projects but as Jubilee's are tailings operations it would avoid this expense.
He added that an upbeat longer term view on the platinum price also influenced the decision to go ahead.
“There are a record number of cars being sold in the US currently, so demand for platinum is there”. Platinum is used as an exhaust catalyst in diesel-powered vehicles.
The company posted a loss of £2.9mln (£3.6mln) in the year to June, though these numbers included the smelter and power businesses, which were sold after the year end for a combined £5.3mln.
Coetzer added the proceeds have left Jubilee with sufficient cash to build the plant at Dilikong if needs be.
Shares rose 5% to 3.59p and since April have almost tripled.