Jubilee Metals Group PLC (LON:JLP) has tied up a deal that fully utilises its chrome processing capacity at the Windsor recovery plant in South Africa while acquiring access to new facilities in an agreement that will further enhance output.
Under the terms of the transaction, it is targeting production of 40,000 tonnes of concentrate per month for the next three years.
It has locked in a chrome sale price, therefore locking in an earnings margin, which will be enhanced by the rights to any platinum group metals (PGM) it recovers from discarded material.
In a statement, chief executive Leon Coetzer said the deal “secures not only a constant feed source for Windsor under a protected operational margin but also significantly increases Jubilee's surface PGM resources from the discard of the chrome operations”.
Separately, the group has added a further 35,000 tonnes per month in capacity via a joint venture arrangement - a deal that will see Jubilee assume operational control of the Windsor 8 facility.
It has committed to upgrading the plant and incorporating the company’s processing technology, with first production slated for the end of next month.
Coetzer said: “These agreements have been secured on the back of Jubilee's track record of continuously driving to set new industry standards.”
The progress in South Africa comes hard on the heels of a joint venture to process up to 4mln tonnes of copper tailings in Zambia which the metals group said had “tremendous earnings potential”.
Last week, Jubilee outlined its plan is to start with an initial production of 2mln tonnes of leftover material containing more than 2% copper via a processing facility that will cost US$15mln, with first production expected in the next four months.
Jubilee said it plans to add 10,000 tonnes to output per year at a cash cost of US$4,000 of the metal. Payback on the initial investment is expected in one year.
The chrome and copper specialist is building significant commercial traction in Zambia following the acquisition of the Sable Refinery, which will be used to further refine a concentrate product from the new facility.
This latest deal will be instrumental in taking Jubilee towards its goal of 25,000 tonnes a year of copper production.
In June, the group said it had secured the rights to 150 million tonnes of copper-containing surface tailings for processing through Sable.
In Thursday’s announcement, CEO Coetzer said: “Jubilee continues to aggressively drive its expansion across both its South African and Zambian operations. Our significant progress in Zambia, as announced last week, is followed by the successful implementation of these two key agreements supporting the expansion of our South African chrome and PGM operations.”