1st Jul 2014 10:06
LONDON (Alliance News) - Jubilee Platinum PLC Tuesday said its Middelburg smelter operation in South Africa has continued to drive forward production in its second quarter.
Jubilee also said it has issued further shares, worth about GBP472,500, on behalf of its subsidiaries to pay for work at the plant.
The platinum mining exploration and development company said the Middelburg smelter's production grew by 47% in its second quarter compared to the first, after the company commissioned a third ARC furnace for the site in May, the final step in the modernisation of the plant and a crucial step in ensuring the facility becomes sustainable and starts earning cash flow for the company.
The company had said in June that the plant had hit all its targets for May. Middelburg made a net profit of ZAR1.3 million, or GBP76,282, in May, resulting in positive cash flow to the company, it said at the time. Overall production at Middelburg rose 45% compared with April.
"The initial financial results of the first month's operation, following the conclusion of the renewal program at Middelburg, confirms the company's expectations to sustain revenue growth supported by an increase in gross profit margins to a targeted 38%, which is expected to deliver positive smelter earnings targeting a net margin of 12%," Chief Executive Leon Coetzer said in June.
Jubilee also said on Tuesday that it has issued a total of 31.5 million new shares on behalf of its subsidiaries in response to services provided in concluding the upgrades at Middelburg and moving forward on other key milestones for the company.
The company's next main target is to bring the Dilokong chrome mine surface tailings project into operation. The tailings contain platinum, and in June the company signed a deal with mine owner ASA Metals Proprietary Ltd giving Jubilee the exclusive right to access the tailings and the right to build a dedicated chrome and platinum processing plant to process them.
On Tuesday, Jubilee said it is in discussions to advance the construction of a purpose-designed processing plant not only to treat the tailings at Dilokong but also for toll processing third-party platinum bearing chrome ore at the site.
Jubilee platinum shares were down 1.6% to 1.50 pence on Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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