Jubilee Metals Group PLC (LON:JLP) is acquiring rights to all the chrome at the PlatCro project in South Africa, where it already controls the platinum group elements.
The operation is already in production and is currently processing 75,000 tonnes of ore per month from a resource base of over 1.8mln tonnes.
READ: PGM and chrome production from Jubilee Metals is now generating more revenue per year than its market valuation
It will more than double Jubilee's existing chrome processing capacity
The consideration is £8.6 million.
"This transaction repositions Jubilee in the chrome/platinum arena in South Africa,” said chief executive Leon Coetzer.
“Our integrated processing hub offers leading processing access to the various independent mines free of the capital and regulatory burden associated with own build. With the integration of our PlatCro PGM project, we anticipate the processing of 65 000 tonnes of PGM rich materials and 80,000 tonnes of chrome materials per month of processing capacity.”
The PlatCro chrome operation currently achieves annual earnings from chrome alone in excess of US$5.5mln before the contribution of PGMs, and will add further strength to Jubilee’s ever-expanding revenue stream.
“I am particularly pleased that this acquisition has been enabled by our current cash and project finance, with minimal dilution to our shareholders," added Coetzer.
The project will be funded via secured project financing to the value of US$6mln, a cash payment of US$2.83mln, and the issue of just over 52mln new Jubilee shares at a price of 2.5p.