| Tue 12 Apr 2011, 8:00 | | JBL - Jubilee Platinum Plc - Voluntary Update Announcement on Acquisition |
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JBL
JUJLP
JBL - Jubilee Platinum Plc - Voluntary Update Announcement on Acquisition
JUBILEE PLATINUM PLC
AIM: JLP
JSE: JBL
Registration number: 4459850
ISIN: GB0031852162
("Jubilee" or "the Company")
Voluntary update on the Binding MOU on Acquisition of Target Company
Highlights
- Jubilee secures near term platinum concentrate for its Middelburg smelter
facilities through the acquisition of Chemstof (Pty) Ltd ("Chemstof")
- The acquisition includes a majority interest in Chemstof and all associated
subsidiaries
- Chemstof subsidiaries includes near surface platinum containing chromitite
reefs, an operating chrome ore beneficiation plant producing saleable chrome
concentrate and an estimated 500 000 tons platinum-rich surface stockpile
- Jubilee is to construct a platinum concentrator to beneficiate PGE`s from the
surface stockpile and current platinum containing tailings from the chrome
beneficiation plant
The Board of Jubilee, the AIM traded and JSE quoted platinum mine to metal
specialist, is pleased to announce further details on the binding Memorandum of
Understanding ("MOU"), announced on 5 April 2011, for the acquisition of an
operating company that treats near-surface chrome ore bodies containing platinum
group elements ("PGE").
Under the MOU Jubilee is purchasing majority interests in Chemstof and
Chemstof`s associated companies (Chemstof Group), which include an operating
chrome ore beneficiation plant, prospecting, mining rights to near surface
platinum containing chromitite reef and the rights to the 500,000 tons surface
stockpile.
The Chemstof Group has a 500,000 tons surface stockpile of PGE-rich chrome ore
tailings, containing potentially in excess of 40,000 ounces of PGEs. The
Chemstof Group operates a 70,000 tons per month capacity chrome ore
beneficiation plant producing a chromite concentrate for the chrome industry
while continuing to deposit PGE-bearing chrome ore tailings onto the current
surface stockpile. Additionally, the Chemstof Group holds the mining rights to
a small open pit operation on MG (Middle Group) chromitite reefs and prospecting
rights for ground which is prospective for UG1 (Upper Group) PGE-bearing
chromitite reef, for which there is an estimated inferred resource of 5.6
million tonnes.
The consideration payable by Jubilee is performance linked, measured in earnings
generated by Chemstof over a 12 month period following the acquisition. The
consideration payable by Jubilee is ZAR 65.5 million (circa GBP6 million), of
which approximately ZAR 10 million is payable in cash and the balance in Jubilee
shares. The consideration is payable in three tranches over 12 months and the
performance link is based on the Chemstof Group achieving a projected net profit
of no less than ZAR 56.46 million (circa GBP5.2 million) over the 12-month
period commencing 1 April 2011. Jubilee therefore expects that the acquisition
has the potential to be almost entirely self funding.
This strategy is intended to therefore protect shareholders from significant
dilution.
Jubilee will acquire 51% of the ordinary shares of Chemstof which holds the
operating chrome beneficiation plant and 59% of the ordinary shares in Platcro
Minerals CC which holds the mining and prospecting rights to the near surface
reefs. The PGE processing plant and associated surface stockpile will be held
in a newly formed company of which Jubilee will hold 65% of the ordinary shares.
Jubilee has agreed to commence with the construction of a PGE processing plant
to produce platinum concentrate from the Chemstof Group`s PGE-rich chrome ore
tailings. The Company expects that the plant will be producing platinum
concentrate for smelting at Jubilee`s Middelburg plant within two years. It is
envisaged that the majority of the estimated ZAR 50 million (circa GBP4.5
million) funding required for the PGE processing plant will be secured through
project financing.
Leon Coetzer, Chief Executive Officer of Jubilee, said:
"Whilst Jubilee continues to advance the Tjate project to bankable feasibility
stage, the Company recognises the need to access its own supply of near to
medium-term platinum ore, the concentrate from which we are able to process at
our ConRoast facility.
This acquisition will allow Jubilee to process the PGE-rich chrome ore tailings
and, as such, provides ConRoast with a ready supply of own platinum for
processing. This strengthens the Company`s stated strategy of unlocking the
value of platinum in platinum-bearing chomitite reefs and chrome ore tailings
through its exclusive right to the ConRoast process, adding further to our
competitive edge.
The acquisition is structured so as to ensure that Chemstof`s chrome ore
beneficiation operations produce significant profits by year end or the purchase
price will be altered to reflect any underperformance by Chemstof."
Andrew Sarosi, Director of Jubilee Platinum, who holds a B.Sc. Metallurgy and
M.Sc. Engineering, University of Witwatersrand and is a member of The Institute
of Materials, Minerals and Mining, is a `qualified person` as defined under the
AIM Rules for Companies and a competent person under the reporting standards.
The technical parts of this announcement have been prepared under Andrew
Sarosi`s supervision and he has approved the release of this announcement.
Contacts
Colin Bird/Leon Coetzer
Jubilee Platinum plc
Tel +44 (0) 20 7584 2155 / Tel +27 (0)11 465 1913
Andrew Sarosi
Jubilee Platinum plc
Tel +44 (0) 1752 221937
Matthew Robinson/Ben Thompson - Coporate Finance
Joanna Weaving - Corporate Broking
finnCap Ltd
Tel +44 (0) 20 7600 1658
Michael Kinirons/Nick Rome
Bishopsgate Communications Ltd
Tel +44 (0) 20 7562 3350
12 April 2011
Corporate Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
Date: 12/04/2011 08:00:06 Produced by the JSE SENS Department.
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