Why Jubilee Metals Shares Plunged 20.6% After Half-Year Update

The Jubilee Metals Group PLC (LON: JLP) share price plunged 20.6% after releasing an operations update for the six months ended 31 December 2022. The company did not meet its production targets in Zambia due to massive nationwide power outages, but its South African operations fared much better. 

Still, investors ignored all the positive milestones achieved by the company, including upgrading its power and water infrastructure in Zambia, triggering a massive boost in production at its Zambian facilities after the period ended. The company constructed backup power facilities and a reliable water supply for its Zambian operations. 

Therefore, today’s decline can be attributed to negative investor sentiment towards the mining company with operations in Zambia and South Africa. The company revealed that it produced 18,208 PGM ounces at its expanded Inyoni Facility in South Africa during the six months despite frequent power outages due to load shedding. 

Jubilee Metals further produced 634,111 tonnes of chrome concentrate due to the increased capacity at Inyoni, putting it on track to achieving its full-year target of 1.2 million tonnes of chrome concentrate. The company also expanded its capacity to handle PGM feed material by an extra 5,016 PGM ounces to protect the Inyoni facility from Inyoni facility from power outages. 

However, the company’s Zambian operations had disappointing results as Copper production was down 10% at 1,149 tonnes compared to the previous six months. Overall production was also lower than expected at 3 000 tonnes of copper for the half-year due to massive nationwide power outages in the country. 

Jubilee Metals decided to invest US$2.5 million to overcome the challenges it has been facing in Zambia. The investment allowed the company to deliver an upgraded privately owned water infrastructure, further upgrade its power infrastructure by securing additional power and replace damaged equipment. 

The infrastructure upgrades allow the company to double its Roan facility's production capacity from the current 780,000-tonne annual processing capacity. The company also revealed that it had completed the first cobalt production runs from waste materials. 

Investors ignored all the positive news, given the sharp drop in JLP shares. 

*This is not investment advice. 

The Jubilee Metals share price plunged 20.61% to trade at 9.09p, from Tuesday’s closing price of 11.45p.