Jubilee secures rights to process 2m tonnes of copper run-of-mine
Jubilee Metals Group has signed a joint venture agreement with a private Zambia company, it announced on Thursday, securing the rights to process two million tonnes of copper run-of-mine material containing more than 2% copper.
The AIM-traded firm said that, under the agreement, there was further potential to increase the supply of copper ore to around four million tonnes, with an additional 2.5 million tonnes of copper-containing tailings available for processing.
It said the project would target the near-term production of copper concentrate through a dedicated, newly-constructed copper concentrating facility, for which Jubilee had completed the design for the construction at a targeted brownfield site adjacent to the tailings.
The processing facility would be commissioned in two phases, with the first copper concentrate and revenues expected within four months.
Jubilee said the total project capital was estimated at $15m (£11.39m), to be invested over a 12-month period, which Jubilee was looking to fund using its cash reserves and access to debt, leveraging off its existing balance sheet.
The board said the additional copper units supplied to its Sable Refinery held the potential to “significantly enhance” the earnings margin, targeting a unit cost of around $4,000 per tonne of copper cathode, offering a potential payback of the project capital within one year.
It said the facility would be strategically located to access the large potential of third-party copper ore in the area.
The project was targeted to deliver copper units “well in advance” of Jubilee's previously-announced copper transaction in Zambia, and was described by the board as a “significant step” towards achieving Jubilee's stated goal of 25,000 tonnes per annum of copper production.
“This joint venture agreement offers tremendous earnings potential for Jubilee,” said chief executive officer Leon Coetzer.
“The project has been a key target for Jubilee to drive the ramp-up in our copper production while we are implementing our previously announced Project Elephant.
“This transaction complements the already secured large copper resource and will provide us with earnings in the near term.”
Coetzer said the earnings would be further bolstered when the company begins the processing of the 150 million tonnes of tailings secured under Project Elephant, allowing iot to expand and fill to capacity, over the long term, its Sable Refinery.
“The combination of easily accessible large surface resources, together with a fully operational copper refinery, offers us the potential to replicate, at a larger scale, the success Jubilee is achieving with its platinum group metals and chrome operations in South Africa.
“Our exceptional in-house processing and metals recovery abilities are core to this success.
“For Jubilee to have entered into this joint venture agreement so soon after announcing Project Elephant is testament to a period of intensive work”
At 1625 BST, shares in Jubilee Metals were up 7.03% at 4.87p.