Mine-to-metals company Jubilee Platinum last week announced that it had executed a binding cash sale agreement of R110.5 million for its Middelburg operational assets.
Special purpose vehicle Main Street 1347 – established for the purpose of the disposal – will acquire 100% of the issued shares of Jubilee Smelting and Refining, a subsidiary of Jubilee owning the Middelburg Smelter Complex, for R72.0 million.
It will also acquire 70% of the issued shares in Power Alt, which owns the power plant for R38.5 million – collectively referred to as the Middelburg Operations.
The transaction, which is subject to shareholder approval, will see Jubilee retain the right to the 5 MW platinum furnace at the Middelburg operations with secured power, as well as all intellectual property relating to the development of the Platinum-in-Waste processing strategy valued at R100 million.
Jubilee says the effect of the disposal to the Jubilee Group going forward is that it will release cash to support the group’s ongoing investment into platinum surface processing projects.
The proceeds from the disposal is capable of fully funding the capital required for the construction and commissioning of the Dilokong chrome mine platinum surface processing project.
The release of significant management time spent on the Middelburg Operations will also enable management to focus on bringing the current projects to production and to grow the group’s strategy of processing and producing its own platinum group metals (PGM).
In executing the disposal the group is exchanging limited growth medium cash generative assets with potentially high cash generative platinum assets, offering significant growth.
“The Disposal is in keeping with our stated mission of processing own PGM production. Jubilee retains the right to a 5 MW ConRoast smelting facility at Middelburg and receives significant cash to assist in the financing of its future surface platinum processing operations. Terms for further funding, required to simultaneously execute both platinum surface processing projects, have been offered by a number of financial institutions.
“I am delighted with the outcome of the disposal and remain committed to further growth of all of our platinum activities,” says Jubilee Platinum CEO Leon Coetzer.