Jubilee Metals announces plans to raise £10m

The AIM-traded firm said the shares would be offered at 5.5p each.

It said the decision to proceed came after Jubilee recently secured a strategic investment opportunity.

In a binding agreement executed on 12 December, the company moved forward with a strategic investment into a historical copper waste rock dump in Zambia.

Preliminary estimates suggested that the site could contain up to 350 million tonnes of waste rock material with copper grades of 1.5%.

Additionally, Jubilee Metals said it had entered into a binding term sheet with International Resources Holding (IRH) to establish a dedicated special purpose vehicle (SPV) for funding the copper waste rock asset acquisition and implementing the processing solution.

Jubilee said it would hold a minimum 30% funded position in the SPV and oversee its daily operations.

The total consideration for the acquisition of the waste rock dump was $30m, payable in instalments over 18 months, with project costs estimated at $50m.

Jubilee said the fundraising aimed to expedite the implementation of the Green Copper Project while continuing to support the expansion of its existing copper and chrome operations in South Africa.

The intended use of the proceeds included paying the initial $1.75m for the acquisition of the copper waste rock dump, advancing resource and process design, expanding the sulphide recovery circuits at the Sable Refinery, progressing the Mufulira slag project development phase, and fulfilling general working capital needs.

Jubilee said the placing shares, assuming full take-up and completion, would represent 6.23% of its enlarged share capital.

"Jubilee's copper portfolio continues to expand in Zambia as demonstrated by our ability to secure what we believe to be the best waste rock projects," said chief executive officer Leon Coetzer.

"The partnership announced recently with Abu Dhabi based IRH is a hugely exciting new venture which has the potential to catapult our growth and copper production profile.

"This partnership affords Jubilee the opportunity to accelerate its copper from waste production profile without the associated capital burden."

Coetzer said the money raised would allow the company to accelerate the manufacturing of its new copper modules on the new projects and secure the long lead items with suppliers in a tight market for crucial materials.

"The funds will also allow us to expand our plant at Sable by increasing the copper sulphide capacity to meet the increase in volumes.

"This proposed fundraise is in addition to our existing funded growth projects in South Africa and Zambia.

"By fast-tracking this new waste rock project, we will be able to bring forward production and revenues quicker than funding from existing cash flow."

At 0846 GMT, shares in Jubilee Metals Group were down 14.41% at 5.82p.

Reporting by Josh White for Sharecast.com.