Jubilee Metals Group PLC agreed to acquire the Sable zinc refinery in Zambia from two Glencore PLC subsidiaries for £9.16 million and completed £17.2 million in fundraising as it moves to ramp up implementation of the Kabwe Tailings project.

The refinery is situated next to the Kabwe project, which comprises stockpiles of zinc, lead and vanadium contracted from BMR Group PLC.

Jubilee agreed in October 2017 to earn up to a 40% joint venture interest in the Kabwe project and increased its interest to 87.5% in August 2018. It had a 91.1% interest as of November 2018 which included its indirect interest through a 29.01% shareholding in BMR Group.

The company said March 21 that the deal will reduce refinery construction time by 18 months while decreasing capital expenditure related to initial production to around £18.32 million. The first metal is expected to be delivered within a year of the acquisition.

Kabwe is scheduled to ramp up over a two-year period from 20 tonnes per hour to 40 tonnes per hour, targeting annual production of 8,000 tonnes of zinc, 1,500 tonnes of vanadium and 15,000 tonnes of lead.

Jubilee Metals will make payments in stages under the agreement with Glencore, which is subject to an acid supply agreement between the two companies as well as a review by Zambian competition authorities.

With regards to financing, Jubilee secured a combination of debt and equity financing to complete the transaction and deliver the Kabwe project.

It raised £6.11 million through a convertible loan note secured with ACAM LP, an affiliate of two sophisticated investors based in London and New York, and completed a placing of 491,814,444 new shares at 2.25 pence apiece to raise gross proceeds of £11.07 million. The placement includes 1,473,055 warrants exercisable for two years.

Jubilee noted it has secured Zambian ministerial approval for the transaction and that the minister had waived previous conditions placed on Kabwe mining licenses. In June 2018, Jubilee notified BMR Group that discussions with the Zambian authorities were not expected to conclude until later that month.