Jubilee to concentrate on platinum growth
JUBILEE Platinum is selling down most of its stake in two noncore assets, with a view to expanding its platinum footprint in SA.
Global Renewal Energy has agreed to a two-tranche, $14m deal with Jubilee to buy a portion of the platinum company’s stake in its ferroalloy subsidiary, Jubilee Smelting and Refining, and part of its holding in PowerAlt.
Jubilee CEO Leon Coetzer said yesterday that the miner would not entirely dispose of its stakes in the two entities, preferring to wait for up to two years to see how they grew under a new owner before it decided whether to sell out completely or retain some exposure. The mining firm would use the funds, which would be paid in two tranches of $9m and $5m, on growing its platinum exposure.
Jubilee is in the process of an all-share deal to buy Platinum Australia, which has a mine and concentrator north of Steelpoort in Limpopo.
Mr Coetzer said Jubilee was looking at “one or two” options to add to its platinum portfolio, but it was moving cautiously in the present weak platinum market.
Jubilee’s shares rose about 4% on the JSE yesterday, mirroring the gain made with its listing on London’s Alternative Investment Market.
Jubilee is in talks with an unidentified third party to supply 40,000 tons a month of platinumbearing material to treat at Platinum Australia’s plant, offsetting the amount it needs to invest in restarting the mine.
Jubilee has tailings material it is going to put through the Plat-
Miner is looking at one or two options to add to its platinum portfolio, but will move cautiously
inum Australia concentrator too.
In terms of the deal with Global Renewal Energy, Jubilee keeps the right to use a 5MW arc furnace at the Middelburg smelting facility. The furnace is designed to treat platinumbearing material.
Further, Jubilee retains the right to build a second furnace depending on the power available at the Middelburg facility. The ferroalloy facility and power plant have been loss-making, with an unaudited net loss of $2.4m for the six months ended December.
Jubilee has exclusive use of a patented technology called ConRoast that state-owned mineral research facility Mintek developed. The technology allows the processing of platinum concentrate with high chrome levels.