Jubilee Metals Group PLC (LON:JLP) is to buy a stake in BMR Group PLC (LON:BMR), its joint venture partner in the Kabwe project Zambia.
The company will acquire a 29.01% holding in the enlarged issued share capital of BMR for £500,000 in cash and 63,166,969 Jubilee shares worth £2.3mln based on closing price of 3.65p each on 11 January.
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The deal will raise Jubilee's effective interest in Kabwe to 57.41%, subject to its election to execute the project.
"This strategic acquisition is consistent with our stated mission to take our brand into low risk surface projects in other commodities and other countries,” said chief executive Leon Coetzer.
“The acquisition secures Jubilee the right to a significantly increased effective interest in the Kabwe project which is dependent only on our decision to progress the Kabwe project, which remains subject to the completion of our due diligence.”
The company expects to come to a decision on whether to proceed with the Kabwe project by 28 February.
Jubilee entered into a joint venture with BMR in October last year to target the recovery of lead, zinc and vanadium at Kabwe.
Coetzer said ongoing due diligence of the Kabwe project has confirmed Jubilee’s understanding of the “significant size and quality of the various surface assets”.
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“I was particularly encouraged by our metal recovery trials which included the leachability of the zinc, lead and the vanadium,” he said.
“These results confirmed the recoverability of the targeted metals.”
Due diligence is now focused on working with BMR to establish the optimal recovery route for extracting the metals from a commercial standpoint in an environmentally responsible manner, he said.