JUBILEE Platinum has secured access to 100000oz of platinum locked up in tailings in a deal with China's ASA Metals' Dilokong chrome mine in Limpopo, CEO Leon Coetzer said yesterday.

Jubilee jumped as much as 5,5% to an intraday high of R1,53 after the announcement.

Jubilee has exclusive use of the ConRoast technology developed by minerals researcher Mintek, under a 10-year licence. This technology allows the smelter to process platinum concentrate with high levels of chrome, a problem for traditional furnaces used by major platinum mining firms.

The agreement to access Dilokong's tailings as well as its arisings, or waste material, will allow Jubilee to convert one of its three alternating current furnaces at its Middelburg plant to a direct current ConRoast smelter at the cost of about £2m to treat the concentrate it will generate.

Jubilee will fund R120m needed to build a processing plant and concentrator at the Dilokong operation. A large proportion of this capital will come from project financing, Mr Coetzer said.

The tailings contain between 90000oz and 100000oz of platinum at a grade of between 3,5g and 4g a ton. The reason for the high grade is that the dumps have been reprocessed to extract remnant chrome, he said.

The cost of production will yield "robust" returns even at current platinum group metal (PGM) prices, Mr Coetzer said, without disclosing the cost of producing the concentrate. The timeline is subject to a final due diligence study and regulatory approvals.

"We are pursuing three such opportunities and this is the first one to come to fruition," Mr Coetzer said, adding Jubilee's focus was on producing a platinum rich iron alloy from its ConRoast furnace. It had suspended work on a refining plant to treat that alloy until prices recovered.

The tailings project will yield a peak of 12900oz of PGMs a year when the plant treats both tailings and fresh material.