JOHANNESBURG - Dual - listed Jubilee Metals yesterday weakened 3.85percent in early trade on the JSE to 50cents a share as the market digested news of the temporary suspension of processing at the Dilokong Chrome Mine (DCM). The company said the suspension was necessitated by the “transitional phase” of the DCM project.
“We have temporarily suspended the processing of third-party ore at DCM due to continued variation in feed quality causing operational difficulties, negatively impacting our production of chrome from the on-site tailings and surface waste material,” the company said in a production report for March.
Jubilee Metals is constructing a dedicated platinum group metals (PGM) recovery plant at DCM, with a target of 25000 tons a month of feed material.
Last September, Jubilee subsidiary Jubilee Tailings Treatment Company agreed to a partnership with DCM that included the third-party processing agreement.
The agreement was expected to boost Jubilee Metals’ balance sheet significantly.
It has afforded Jubilee Metals the right to 50percent of all earnings generated from the processing of chrome ore. Previously, the company owned no rights to chrome earnings at the outset of the DCM project.
The company reported that production at its Hernic operation in North West had reached a new high of 1858 PGM ounces in March. Operational earnings rose by £1.14million (R19.65m), while project revenue was up 30percent to £2.65m. The cost to produce a PGM ounce was at a low of $434 (R5234).
Jubilee Metals chief executive Leon Coetzer said: “I expect Q2 2018 to deliver even better operational numbers, as the Hernic operation continues to improve. It is an exciting period for Jubilee as we expand our operational reach.”
Earlier this month, the Zambian ministry of mines and mineral development reinstated Jubilee’s licence for the Kabwe lead, zinc and vanadium project it operates jointly with the UK-headquartered BMR Group. In October, the two companies announced plans to form a joint venture to extract zinc, lead and vanadium from about 6.4million tons of surface deposits at Kabwe.
In the six months to December, Jubilee reported that gross profit had risen 161percent to £2.37m and revenue was 23.51percent higher at £5.99m.
Jubilee shares closed 1.92percenthigher at 53c on the JSE yesterday.