JUBILEE Metals said yesterday in its interim results for the six months ended December 31 2021 that it had achieved a major milestone with the completion of its Inyoni chrome and platinum group metals (PGM) operations in South Africa.
Chief executive Leon Coetzer said: “The benefits from the completion of our Inyoni facility have been seen already and the second half of the financial year has started strongly with monthly production levels being reflective of the new facility as it reaches full design capacity.”
Jubilee’s first-half attributable earnings fell to £19.5 million (R374m), from £30.9m in the year-earlier period as a result of the planned Inyoni PGM plant operational downtime to allow for the construction and re-commissioning of the new integrated Inyoni facility.
“This resulted in the Inyoni PGM facility being available at 100 percent of its operating capacity for only 41 percent,” the group said.
The lower-than-average PGM basket price, which was down 35 percent over the interim period, also contributed to the decline in earnings, although the company said there was a strong recovery at the end of 2021 and beyond.
Total PGM ounces sold includes the sale, in part, of the PGM in-process stock released through the stoppage of the Inyoni Facility.
“The increase in the PGM unit cost per ounce to $822 (R12 123) was mainly driven by a transport cost component of $262 per ounce (included in the $822) incurred for PGM ounces transported from the Eastern Limb Region until such time as a dedicated PGM facility is secured in the Eastern Limb Region,” the company said.
However, the metals processing company said revenue increased by 18 percent with chrome revenue contributing to 48 percent of total group revenue compared to 22 percent for the comparable period.
“This increased revenue has the impact of reducing overall group earnings margin due to the fixed margin contract,” the group said.
The new Inyoni facility further increases Jubilee’s access to chrome processing capacity, to about 3 million tons a year, making the company one of the world’s largest chrome processors, it said.
“It also lifts the Inyoni PGM production potential capacity to about 44 000 PGM ounces per annum, offsetting any short-term production loss linked to the construction phase,” the company said.
The group said the facility was only able to operate at full capacity for 41 percent of the time.
The proportion of PGM ounces now produced that were fully attributable to Jubilee had significantly increased compared with the considerable dilution of earnings caused historically by the Windsor PGM joint venture, where 40 percent of earnings was attributable to the JV partner, Jubilee said.
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