Leon Coetzer, Chief Executive Officer of Jubilee Metals discusses the recent release of the Hernic PGM (Platinum Group Metals) Project results with Damon Heath from Shard Capital.
Leon, we note the recent release of the Hernic Q1 results for 2018. What do you see as the key points for shareholders from the report?
“Hernic’s Q1 results had a significant increase in efficiencies from last quarter, jumping 30% in ounces delivered to the refinery?. Production hit 1850 ounces in a month which saw quarterly PGM production with just under 5,000 ounces. Our Q1 results also include the month of January which is a notoriously difficult production month and includes approximately 2 weeks downtime.
The increase in efficiencies was an extremely pleasing result for us given the improvement in production of ounces; highlighting that this was also delivered against a reduced plant throughput. This suggests an improvement of more than 40% on PGM efficiencies which bodes very well for the expected performance in Q2.
We see Platinum efficiencies as they key to ensuring the Hernic Project can be delivered and achieved on a sustainable basis.”
We note the increased unit cost for PGM per ounce produced, what was behind this increase?
“The per unit cost for Q1 contains one off changes which have been accrued for. This includes variables such as salary increases for the work force and one-off payment for utility connection fees.
If we were to strip these costs out, the unit cost drops to below USD 400 per ounce delivered which is exceptionally low for a platinum producer. Given this, with a unit price of USD 434 per ounce, the Hernic Project is still one of the lowest, if not the lowest cost Platinum producers in the world.”
It has been unfortunate to see the DCM numbers (Dilokong Chrome Mine) have a neutral earnings growth over the quarter?, do you believe this is related to third party Ore?
“Although overall earnings have remained positive, this has been underwhelming. The DCM is going through a transitional phase as we gear up for the PGM project and the decision has been made to commence the installation of the full fine chrome circuit (similar to Hernic) to maximise the recovery of chrome in preparation of the PGM recovery plant.
DCM will therefore go through a period of process upgrading and build program over the next two quarters as we gear-up for the PGM circuit. The build program will be funded from our cash reserves and our available project financing facility.
We expect DCM earnings will remain flat during this transitional period before accelerating to reflect the recovery of the additional chrome and the commissioning of the platinum recovery circuit.”
What can we expect from Jubilee for the remainder of the year?
“Shareholders can look forward to a year that includes the delivery of our next PGM project, whilst we also commence the construction of our Kabwe Project in Zambia. However, this will not detract from our drive to grow our earnings from further improved performance from Hernic and DCM.”
If you would like more information on Shard Capital, or Jubilee Metals Group, please contact us.
Shard Capital is the appointed Broker for Jubilee Metals Group.
Contacts: Damon Heath/Erik Woolgar
Tel +44 (0) 20 7 186 9900
Important investment information Shard Capital Partners LLP are authorised and regulated by the Financial Conduct Authority. Our FCA Register number is 538762. The views in this article are published solely for information purposes and are not to be construed as a solicitation or an offer to buy or sell any securities, or related financial instruments. It does not constitute advice or a personal recommendation as defined by the Financial Conduct Authority (“FCA”) or take into account the particular investment objectives, financial situations or needs of individual investors. The views above are based on public information and sources considered reliable. The results noted are not a reliable indicator of future performance. Yields are variable and not guaranteed. All investments should be held for the long term as their value can fall as well as rise, therefore you could get back less than you invest. If you are unsure about the appropriateness of an investment for your circumstances please seek financial advice. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This publication has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Figures correct as at 19th April 2018, unless otherwise stated. This publication is issued by Shard Capital Partners LLP, 20 Fenchurch Street, London, EC3M 3BY United Kingdom.