Jubilee Metals Group PLC (LON:JLP) has acquired the Sable Zinc refinery in Zambia from two subsidiaries of Glencore PLC (LON:GLEN) for £9.6mln (US$12mln) and has completed a fund-raising as it moves to ramp up implementation of the Kabwe base metal project in the country.
The AIM-listed firm pointed out that the Sable Zinc refinery is situated immediately adjacent to the large stockpiles of zinc, lead and vanadium that Jubilee has contracted from BMR Group PLC (LON:BMR).
WATCH: Jubilee Metals focused on delivery after significant zinc refinery acquisition
It added that the acquisition reduces the time to build the project refinery by around 18 months and it expects to deliver the first metal within a year from the purchase.
The company added that overall project capital to produce first metal will be significantly reduced to around £18.32mln (US$ 24mln).
It said the project will ramp up over a two-year period from 20 tonnes to 40 tonnes per hour producing significant amounts of zinc, vanadium and lead.
The group noted that the Kabwe project is expected to significantly enhance its earnings on the back of the revenue from three producing metals.
Placing and loan note financing
Jubilees Metals said they have secured a combination of debt and equity financing to fully complete the transaction and deliver the Kabwe project.
It said successfully completed a placing of 491,814,444 new Jubilee Metals shares at an issue price of 2.25p each to raise £11.07mln (US$14.50mln) before expenses.
The group also raised £6.11mln (US$8mln) through a convertible loan note secured with ACAM LP, an affiliate of two sophisticated investors based in London and New York.
In late morning trading, shares in Jubilee Metals were down 2% at 2.40p.
Testimony to quality of project
Leon Coetzer, Jubilee Metals chief executive officer said: "I am delighted that, after months of test work, flowsheet design and refinery acquisition negotiations, we can announce the full implementation plan for the Kabwe base metal project.
“My team and I are looking forward to managing an implementation programme to deliver to our shareholders this outstanding project on time and in budget.”
He added: “I am particularly pleased that we have been able to secure the support of large institutional funders in the equity placing which, is testimony to Jubilee's Metals Recovery strategy and the quality of the Kabwe project."