By: Mining mx

JUBILEE Metals has accepted a $90m (R1.6bn) binding offer for its platinum group metal and chrome tailings assets in South Africa.

Commenting on the planned sale on Thursday, Jubilee CEO Leon Coetzee said the transaction would enable to focus on its Zambia copper assets. The firm’s South African PGM and chrome business was largely ex-growth without new major investment – outlay Jubilee was unlikely to be able to afford amid pressure on its balance sheet.

“After years of effort and investment, the South African business has reached a stage of maturity that would require a large capital outlay to achieve any step change in production going forward,” said Coetzee.

Jubilee has guided to chrome concentrate production of 1.65 million tons in its 2025 financial year. PGM output has been guided to 36,000 ounces.

The offer was subject to customary approvals including the support of Jubilee’s shareholders. Shares in the company gained 5% in morning trade in Johannesburg taking the share nearly 18% higher year-to-date.

The binding offer is from “a private mining and metals trading company”. No other details were available regarding the acquirer but it is probably anticipating prices for PGMs have bottomed out after several years of heavy correction. Jubilee will keep an option open on PGM market recovery via its Tjate project.

On the flipside, Coetzee thinks the copper price underpins the Zambia strategy, saying that “the potential capital returns and earnings growth offered from our exciting suite of assets could not be more evident”.

Production guidance for Jubilee’s Zambian copper is under review pending processing trials at its Roan concentrator scoped to produce 35 000 to 40 000 tons of copper concentrate per month. Combined with its Munkoyo operations, which produce 80,000 tons monthly, Jubilee is targeting about 288 tons of copper by June 2025, rising to 400-550 tons monthly by October.

As of the six months ended December, Jubilee produced 1,454 tons of copper metal, slightly behind the pace of 2024 when it produced 3,422 tons for the 12 months.

It posted a 54.4% decline in interim net profit and showed signs of balance sheet pressure. As of December 31, the company had net debt of $40.3m of which $34.5m consists of facilities due to mature this year.