Our opinion on the current state of JUBILEE(JBL)Jubilee Metals Group (JBL) is a diversified metals recovery company that re-processes mine waste and surface materials. It is listed on both the London AIM market and the JSE's Alt-X. The company operates in South Africa, the UK, Madagascar, and Australia, and is involved in a joint venture in Zambia to produce lead, zinc, and vanadium. Its primary products are platinum group metals (PGMs) and chrome. A key asset is its 63% stake in the Tjate project, which is assessed to include the world's largest undeveloped block of platinum ore with an estimated potential of 65 million ounces on the Western Limb of the Bushveld Igneous Complex. In recent years, however, Jubilee has "pivoted towards a smelting and beneficiation strategy as a cashflow survival strategy."
Jubilee is currently spending about R154 million to consolidate its PGM retreatment business by acquiring a reprocessing plant and some dumps. This expenditure includes the purchase of a chrome processing operation and 1,8 million tons of tailings from PlatCro Minerals. The company is a low-cost producer but remains subject to fluctuations in the platinum and base metals markets.
In its results for the year to 30th June 2024, the company reported revenue up 20,2% and chrome concentrate production up 20%. However, 6E PGM production decreased by 14,2%, while copper production increased by 17,1%. The company stated, "Group EBITDA decreased by 7.1% to US$27.7 million (FY2023: US$29.8 million), supported by increased chrome production helping partially offset the impact of the sharp decline in PGM EBITDA."
In an update for the three months to 30th September 2024, Jubilee reported a production target of 1,800 tonnes of copper units for H1 FY2025, ending December 2024, with plans to increase to approximately 4,200 tonnes for H2 FY2025, totaling approximately 6,000 tonnes for the full year based on current assumptions. However, in an operational update for the six months to 31st December 2024, the company reported copper production of 1,454 tons, falling short of the 1,800-tonne target due to "power constraints." The company noted, "Roan upgrade and commissioning completed, reaching ramp-up throughput targets of a combined 45,000 tonnes per month during the period before experiencing shutdowns due to power constraints."
On 7th October 2024, Jubilee announced it had increased its stake in project "G" to 65% and secured an additional 2 megawatts of power from an independent power producer (IPP).
In our view, this share is one of the better options in the mining sector but remains highly volatile and risky. Investors are advised to wait for a clear break above the share's long-term downward trendline, which has not yet occurred.
