Jubilee Platinum (AIM: JLP, JSE: JBL) and Sylvania Resources (AIM, ASX: SLV) have now formalised their previously announced partnership for the smelting and refining of low grade and high chrome concentrate resources using Jubilee's ConRoast technology. The companies will establish two separate joint ventures to exploit PGM resources which have previously been deemed uneconomic on the Bushveld complex in South Africa.
"These new companies combine the joint operating capability of Jubilee and Sylvania to take PGM containing dump material into metal. The ongoing arrangement provides the platinum industry with a formidable total capability solution for the processing of PGM tailings and high chrome concentrates", Jubilee CEO Colin Bird said.
Firstly, a new JV smelting company will be incorporated, with the ownership structure split 70% to Jubilee and 30% to Sylvania. All uncommitted concentrate from Sylvania’s existing tailings operations and Northern Limb projects will supply the Smelting Company. Another JV company will be incorporated with the equity split 50-50. The Tailings Processing Company will exploit future platinum tailings opportunities and will not incorporate Sylvania's current tailings and Northern limb operations.
"The formation of the joint venture companies offers Jubilee and Sylvania the benefit of fully exploiting the synergies offered by a mine-to-metal strategy free of the traditional constraints imposed on high chrome, or relatively low grade concentrates”, Sylvania Resources MD Terry McConnachie said, “Any future platinum tailings processing opportunities will be jointly exploited combining Sylvania's significant tailings treatment experience and Jubilee's smelter technology and experience. This allows the combined entities to tackle new tailings projects that are not currently exploitable by either Sylvania or Jubilee individually".
Jubilee acquired Braemore Resources in the second half of 2009. The company has since moved quickly to progress the ConRoast technology, Braemore’s key asset. In November 2009, Jubilee and Sylvania initially began their partnership. Jubilee confirmed that Sylvania’s previously uneconomic low grade platinum group metal (PGM) concentrate was successfully treated through the ConRoast Smelter. In December, Slyvania reported that 99% of PGMs were recovered and that the high chrome content posed no risks.
Today's framework agreement also defined shareholder agreements for each company, and issues surrounding the management, technology and intercompany off-take agreements between the partners. It is anticipated that the Smelter Company and the Tailings Processing Company will be operational within 3 months. At this point the respective companies should have completed the necessary knowledge transfer between the partners and the newly established companies.
The Smelting Company will fund and procure the construction of three ConRoast Technology supporting furnaces, which are specifically designed for the roasting and smelting of Sylvania’s PGM concentrate. Each furnace is expected to have a capacity up to a nominal 10MW and shall have associated roasting, infrastructure and refining equipment. Subsequently, Sylvania will conclude off-take agreements with both new companies for the respective sources of PGM concentrate.
Jubilee will be appointed as manager of the Smelting Company in return for a management fee related to its profitability. The parties will be jointly responsible for the management of the Tailings Processing Company.