TIDMJLP
RNS Number : 9269W
Jubilee Metals Group PLC
06 August 2018
Jubilee Metals Group PLC
Registration number (4459850)
AltX share code: JBL
AIM share code: JLP
ISIN: GB0031852162
("Jubilee" or "the Company")
Jubilee gains full control of the Kabwe Project
Jubilee Live Interactive Webcast
Project Highlights
-- Jubilee gains full control of the Kabwe Project increasing its interest to 87,5%
-- Option to acquire 100% of the Kabwe Project while BMR retains
a maximum of 12,5% of generated earnings
-- Jubilee retains its 29,01% shareholding in BMR and therefore
a total effective beneficial interest of approximate 91,5% in the
Kabwe Project
Leon Coetzer, Chief Executive Officer, says: "
I am delighted by the execution of the updated shareholders' and
operating agreements with BMR. The agreements ensure that Jubilee
takes full control of the funding requirements and execution of the
Kabwe Project.
We have been able to ensure that the success of the Kabwe
Project remains independent of the financial position of BMR with
the option to acquire 100% of the Kabwe Project.
The expertise of our technical and project execution teams have
led to the development of an enhanced process flowsheet for the
recovery of both zinc and lead. As previously discussed, the
enhanced flowsheet allows us to implement the zinc recovery circuit
independently of the lead recovery circuit which provides our
technical team with the opportunity to continue refining the lead
circuit design without delaying the construction of the zinc
circuit.
I am confident that the team will conclude the enhanced circuit
design and project financial parameters by the end of Q3 2018.
"
Kabwe zinc, lead and vanadium project overview (Zambia)
The initial detailed technical and engineering review by Jubilee
of the Kabwe Project ("Project") highlighted certain short comings
in the process methodology as originally presented by BMR. Our
process development teams have been able to determine a more
suitable process solution for the recovery of lead and zinc in the
surface material than the originally contemplated acid and brine
solution. The enhanced process flowsheet offers the potential to
both improved capital efficiency as well as reduced circuit
complexity.
The enhanced process flowsheet targets the recovery of the zinc
ahead and independent of the lead recovery circuit. The
construction of the zinc recovery circuit has been prioritised and
is expected to commission well in advance of the lead recovery
circuit. This approach allows the continued construction of the
zinc recovery circuit to progress while the development and design
of the lead and vanadium recovery circuits are further refined.
The recovery circuit's development by Jubilee's research and
development teams includes work to evaluate the optimal product
purity specifications to improve the capital efficiency of the
Project. It is anticipated that the process flowsheet design will
be completed during Q3 2018 targeting commissioning of the zinc
recovery circuit by mid-2019.
The current shareholders' and operating agreements for the
Project have been updated ("Updated Agreements") to better align
with Jubilee's role to deliver a successful project. The Updated
Agreements will place Jubilee in full control of the execution
methodology and funding requirements to bring the project to
account. In return Jubilee will hold a minimum of 87,5%
shareholding in Kabwe Operations Limited, a company incorporated as
a Joint Venture Company ("Kabwe Operations") assigned with all
intellectual property developed for the execution of the Project as
well as the right to fund and execute the Project.
Jubilee will hold a further option, at its sole election, to
acquire 100% of the issued shares of Enviro Mining Limited ("EML"),
a subsidiary of BMR and the company that owns the Project through
BMR's Zambian based Enviro Processing Limited ("EPL"). BMR will
hold either the remaining 12,5% shareholding in Kabwe Operations or
should Jubilee acquire EML outright a 12,5% share of earnings
generated by the Project ("Royalty"). Such Royalty payments will
only be due and payable by the Project once Jubilee has secured a
minimum of a 20% return on the investment made into the Project and
only once EPL or Kabwe Operations have received all generated
earnings in cash.
Salient terms of Updated Agreements
In terms of the Updated Agreements, Jubilee has been appointed
as the sole operator of the Project giving it full control of the
Project execution methodology. BMR has further agreed to grant to
Jubilee an effective 87,5% fully paid-up shareholding in Kabwe
Operations, with all the rights, entitlements and/or interests
associated with such a shareholding, including majority voting
rights.
In return Jubilee has agreed that, with effect from the
effective date of the Updated Agreements, Jubilee shall fund the
Project by way of debt finance to the extent that Jubilee deems it
necessary without dilution of BMR's 12.5% shareholding. Should the
total capital investment of Jubilee to fully execute Project exceed
US$15 million BMR's shareholding shall immediately dilute to a
fixed 11% shareholding.
In terms of the Updated Agreements Jubilee is further granted,
for a period of 24 months from the effective date of the Updated
Agreements, an irrevocable free option to acquire 100% of the
issued Shares in EML (the "Acquisition"). Following the Acquisition
Jubilee's equity interest in Kabwe Operations and EML will increase
to 100%.
The implementation of the Acquisition following such option
being exercised by Jubilee will be subject to the following key
conditions:
(a) receipt of all regulatory consents required in Zambia for
the change of control of the Project;
(b) payment by Jubilee of all relevant taxes in Zambia in
relation to the Acquisition.
In the event that the Acquisition is implemented, BMR will be
granted a 12.5% Royalty interest in the distributable earnings
generated by the Project, but only after Jubilee has secured at
minimum a 20% return on its investment into the Project and all
costs, taxes, liabilities and depreciation of the Project have been
accounted for, save that the aforementioned Royalty shall be
reduced to 11% of earnings in the event that Jubilee's capital
investment into the Project exceeds US$ 15 million.
Apart from an agreed initial 5% Royalty on distributable
earnings, BMR will only be entitled to a Royalty payment once:
(a) the Project is fully operational and has generated distributable earnings;
(b) Jubilee (or its nominee) has been repaid in full its capital
investment and its agreed capital rate of return of 30% on the
first GBP 2,3 million invested and 20% on any further capital
invested.
The information communicated in this announcement contains
inside information for the purposes of Article 7 of Regulation
596/2014.
Jubilee Live interactive webcast
The Jubilee Board also invites shareholders to participate in a
LIVE interactive webcast, scheduled to commence at 09:00am UK time
(10:00am SA time), on Tuesday 7 August 2018.
The webcast offers Jubilee shareholders the opportunity to
engage with the Jubilee board for an update on its projects. To
participate, please follow the link provided:
http://webcasting.brrmedia.co.uk/broadcast/5b6452137e92fe237b0e261d
United Kingdom
6 August 2018
Contacts
Jubilee Metals Group PLC
Colin Bird/Leon Coetzer
Tel +44 (0) 20 7584 2155 / Tel +27 (0) 11 465 1913
Nominated Adviser
SPARK Advisory Partners Limited
Mark Brady/Andrew Emmott
Tel: +44 (0) 203 368 3555
Broker
Shard Capital Partners LLP
Damon Heath/Erik Woolgar
Tel +44 (0) 20 7 186 9900
JSE Sponsor
Sasfin Capital (a member of the Sasfin group)
Sharon Owens
Tel +27 (0) 11 809 7500
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END
UPDDMGGRLVFGRZG
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