Jubilee completes new fully integrated and enlarged PGM facility

Jubilee successfully completed and commissioned the new fully integrated and enlarged chrome and PGM facility at the 100% owned Inyoni during November 2021. Jubilee’s PGM operations consist of the Inyoni PGM operations and the Windsor PGM JV (operated under a JV agreement with Eland Platinum).

The investment in Inyoni has materially increased the Group’s production capacity of PGM ounces and, importantly, increases the proportion of the ounces produced that are fully attributable to Jubilee along with the associated earnings compared with the significant dilution of earnings caused by the Windsor PGM JV where up to 40% of earnings was attributable to the JV partner.

The new Inyoni facility integrates the new OBB Chrome Plant with the expanded and upgraded Inyoni PGM operations. The Inyoni PGM operations were expanded to increase its processing capacity by 45% to 75 000 tonnes per month and to diversify its capacity with the addition of a multi feed blending circuit and additional PGM recovery circuit.

This has allowed for the feeding and recovering of PGMs from a wide variety of feed material. This new fully integrated chrome and PGM circuit has overcome the historical limitations of only being able to process material from the then Hernic operations and historical waste.

The new integrated chrome and PGM facility increases Jubilee’s Inyoni operational capacity to 615 000 tonnes per annum of chrome concentrate and 44 000 ounces of PGM per annum.

This increased Inyoni capacity reduces Jubilee reliance on the Windsor PGM JV, reducing future earnings dilution and exposure to significantly reduced efficiencies. Jubilee now holds an annual PGM capacity that consists of up to 44 000 PGM ounces at Inyoni (previously only 30 000 PGM ounces) with the additional option of accessing the Windsor PGM JV at a capacity of 16 000 PGM ounces – this represents a material increase in the anticipated production of PGM ounces which will be attributable to Jubilee.

Following the recommissioning of the integrated Inyoni operation and the restocking of the in-process pipeline the expected production target for the full financial period is readjusted to between 43 000 to 48 000 PGM ounces depending on the supplementary production achieved for the remaining period through the Windsor PGM JV.

The investment by Jubilee into the completed integrated project totalled £ 17.5 million (ZAR 377 million) and it illustrates Jubilee’s continued commitment to investing into its operations to creating the foundation for sustained future growth.

As announced on 3 and 4 June 2021, Jubilee’s current PGM operational footprint has been largely focused on the Western Limb, a single area of the two main PGM areas in South Africa. The Eastern Limb has been a key focus for Jubilee to expand its PGM reach and operational capacity following the completion of its fully integrated Inyoni facility.

The additional PGM Supply Agreements from the Eastern Limb entered into gives Jubilee access to this area offering a platform to establish a dedicated integrated chrome and PGM facility and to pursue further growth opportunities.

The Eastern Limb PGM Supply Agreements are mostly based on the LG6 chrome reef known for its high rhodium content accounting for approximately 12% of a produced PGM ounce compared with as low as 7% of other chrome reefs.

The PGM Supply Agreements has secured the rights to long term PGM feed supply with the potential to produce up to 14 500 PGM ounces per annum, with further growth opportunities available. Jubilee will initially process the increased PGM feed at the Company’s expanded and newly integrated Inyoni PGM operations, while pursuing the implementation of a dedicated processing facility in the Eastern Limb.

The temporary increase in costs to transport this material to our Western Limb Inyoni facility is offset by the strategic investment to secure the material for the Eastern Limb strategy and the long-term growth it offers.

During the period, the Company maintained its contractual obligations to deliver the required PGM production despite its Inyoni PGM operation only being partially operational to achieve 20 316 PGM ounces sold for H2 CY2021 (H1 CY2021: 21 975 ounces).

The PGM results are skewed and impacted by the staged decommissioning and recommissioning of the new integrated Inyoni facility over the reporting period resulting in the once of release of certain lower PGM grade inventories and the refilling of the operational pipeline over the period.

The total PGM ounces sold included in-process stock released as part of the recommissioning of the expanded and upgraded PGM facility. The in-process stock was sold as a lower grade PGM material and prior to the completion of the newly commissioned final product cleaning circuit. This release of inventory, which does not reflect the normally incurred full operational cost, skews the PGM unit cost and PGM revenues delivered.

Operational project unit costs expressed as US$ per PGM ounce produced consisted of US$ 560 per ounce processing unit cost and a US$ 262 per PGM ounce transport cost for the material sourced from the Eastern Limb. The average PGM basket price realised per ounce sold reduced by 35% over the period but showed a strong recovery at the end of the period which was sustained during January 2022.

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