TIDMJAN
RNS Number : 4794J
Jangada Mines PLC
29 June 2017
To view the press release with the illustrative maps and
diagrams, please use the following link:
http://www.rns-pdf.londonstockexchange.com/rns/4794J_-2017-6-28.pdf
Jangada Mines plc / EPIC: JAN.L / Market: AIM / Sector:
Mining
29 June 2017
Jangada Mines plc ('Jangada' or the 'Company')
First Day of Dealings on AIM
Jangada Mines plc, a natural resources company developing South
America's largest and most advanced platinum group metals ('PGM')
project, is pleased to announce that its ordinary shares have
commenced trading on AIM at 8 a.m. today under the ticker JAN
("Admission"). As part of the Admission process, the Company has
raised GBP2.25 million, before expenses, through an oversubscribed
Placing of 45,000,000 new ordinary shares at a placing price of 5p
each implying a market cap of GBP9.9 million on Admission.
The majority of the net proceeds of the fundraising will be used
to progress minor additional resource and reserve drilling, a bulk
metallurgy test study, and a scoping study to determine operation
parameters and likely financial model at the Company's Pedra Branca
PGM Project ('the Project') in Brazil. The Project, previously
owned by Anglo American Platinum, has benefited from extensive
historical exploration and development expenditure to the tune of
circa US$35 million.
Subject to raising significant additional funding, the Directors
intend to work towards the commencement
of trial mining and then commercial production at an initial
rate of 30,000 ounces per annum within
12-18 months following Admission.
Strand Hanson is acting as Nominated & Financial Adviser and
Beaufort Securities is Broker to Jangada.
Overview
-- Focused on advancing the Pedra Branca PGM Project in Brazil
and establishing a low cost, low capex open pit operation
-- JORC (2012) Compliant Resource of 23Mt at 1.3 g/t containing
1Moz PGM + Au mineralisation from surface
-- Previous owners have spent in excess of US$35 million
developing the Project, with all data and core owned and
catalogued;
-- Subject to significant additional funding, clear path to shallow, open pit production
o Short term target production of 30,000 ounces p/a within 12-18
months
o Three existing mining licences cover circa 52% of the current
resource
-- 44 additional licences covering 55,000 hectares
o Exploration potential remains open for PGM
o Significant upside potential for high grade nickel, copper,
chrome, rhodium, gold & vanadium
-- Strong PGM market fundamentals for low cost producers
-- Management with extensive, proven track record and project experience
o COO Heinrich Müller managed the Pedra Branca PGM project for
global major Anglo American Platinum
Brian McMaster, Executive Chairman of Jangada said, "As the
largest and most advanced PGM project in South America, the Pedra
Branca Project is a unique opportunity. Our extensive understanding
of the Project and the region, given the historical work undertaken
in tandem with key fundamentals including its location in a stable
country with an established mining code, the simple low-cost
processing operation planned and rapid route to production, all
point towards an exceptional PGM opportunity.
"Jangada intends to hit the ground running. We have an exciting
time ahead and we look forward to updating Shareholders on our
progress as we implement our development plan for the Project."
*S *
For further information, please visit www.jangadamines.com or
contact:
Jangada Mines plc E: info@jangadamines.com
Strand Hanson Limited (Financial T: +44 (0)20 7409
& Nominated Adviser) 3494
James Spinney / Ritchie Balmer
/ Jack Botros
Beaufort Securities (Broker) T: +44 (0)20 7382
Jon Belliss 8300
St Brides Partners LTD (Financial T: +44 (0)20 7236
PR) 1177
Hugo de Salis / Olivia Vita
Notes to the Editors
Jangada Mines plc is focused on developing the Pedra Branca PGM
Project ('the Project'), one of the largest undeveloped PGM
projects outside of Africa, with the potential to supply a market
in long-term deficit. The Company is aiming to establish a low
cost, low capex open pit mine, with a target to produce 30,000
oz/annum by the end of 2018 from three existing mining licences
with mineralisation commencing at surface. The Project has a JORC
(2012) Compliant Resource of 23Mt at 1.3 g/t containing 1Moz PGM +
Au mineralisation from surface, with circa 52% of this contained
within current mining licences and is considered a low development
risk due to previous exploration work totalling + US$35 million.
Additionally, the Company owns a further 44 exploration licences
spanning 55,000 hectares, which have significant upside potential
for PGM, nickel, copper, chrome, rhodium, gold, and vanadium. The
team has a wealth of experience, not only of the Project but of
mining in South America across a range of commodities.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
FURTHER DETAILS
The full Admission Document can be found on the Company's
website www.jangadamines.com.
Capitalised terms used in this announcement carry the same
meaning as those ascribed to them in the Admission Document, unless
the context requires otherwise.
BACKGROUND TO THE COMPANY
Jangada Mines is an England and Wales incorporated company which
has a 99.99 per cent. interest via its subsidiary, Pedra Branca, in
the Pedra Branca Project located in the northeast of Brazil.
Pedra Branca holds 100 per cent. of the mineral rights in
respect of the Pedra Branca Project. The Project is an advanced
stage PGM exploration project containing what the Directors
understand to be the largest PGM resource, as well as being the
only pre-development PGM project, in South America.
The Group is currently undertaking various exploration and
development activities on the Pedra Branca Project and with part of
the net proceeds of the Placing intends to undertake further
exploratory analysis and drilling activities, where appropriate,
over the course of the coming year on the assets to further prove
their potential.
The previous owners of the Project, over several decades, have
spent in excess of US$35 million developing the Project. However,
as a result of the challenging conditions in the natural resources
sector in recent years and internal corporate objectives, the most
recent owners, being global mining major the Anglo American Group
and Solitario Exploration & Royalty Corp., have undertaken
divestment programmes of non-core assets. The Pedra Branca Project
was deemed to be a non-core asset which facilitated the sale of
Pedra Branca to Garrison Capital and then the Company.
KEY INVESTMENT PROPOSITION
The objective of the Group is to deliver material value for its
stakeholders through exploration and development activities at the
Pedra Branca Project. The Directors believe that an investment in
the Company should be attractive to prospective investors for the
following reasons:
-- the Pedra Branca Project is considered by the Directors to be
the largest and most advanced PGM project in South America, with
favourable regional geology, encompassing three Mining Licenses and
44 Exploration Licenses;
-- the Project contains a JORC-compliant resource of 0.95 Moz of platinum, palladium and gold;
-- previous owners have spent in excess of US$35 million
developing the Project, with all data and core owned and
catalogued;
-- shallow, conventional open pit mining resulting in low cost
production, compared to international competitors, with a clear
path to early production and cash flow;
-- subject to raising significant additional funding, the
Directors intend to work towards first production of 30,000 ounces
per annum within 12-18 months following Admission, equating to
estimated mine life of greater than 20 years;
-- 11 deposits with confirmed PGM mineralisation also
demonstrate chrome, nickel and copper mineralisation;
-- the Company intends to use contractors on site to reduce
capex and utilise the existing infrastructure in place;
-- development of the Project is viewed as a regional economic
driver by the State Government and is supported by the local
community;
-- Brazil has an established, transparent and reliable mining code
-- global platinum demand is expected to reach nine million
ounces by 2025, far exceeding supply; (source: Inflection points
for PGMs: Investing in Africa', Anglo American, February 2016)
-- the Board and the Company's senior management have
significant experience in establishing, growing, financing and
subsequently monetising early stage mineral projects in Brazil,
which the Directors consider to be a stable and mining-friendly
jurisdiction, and more widely; and
-- certain of the Directors have significant interests in the
Company. They therefore share economic alignment with
investors.
COMPANY HISTORY
Figure 1: Group structure on Admission - see PDF
Acquisition of shares by the Company in Pedra Branca
The Company was incorporated in England & Wales with
registered number 09663756 on 30 June 2015. The Company was
initially capitalised by the issue of three ordinary shares of
GBP0.01 each and subsequently by the issue of a further 5,999,997
ordinary shares of GBP0.01 each (totalling 6,000,000 ordinary
shares of GBP0.01 each) which were then subdivided on a 25:1 ratio.
The Enlarged Share Capital on Admission is 197,515.600.
Through a series of transactions, dating between 30 April 2016
and 16 February 2017, the Company has acquired 99.99 per cent. of
the shares in Pedra Branca, with 0.01 per cent. of the shares held
by FFA Holding & Mineracao Ltda (a vehicle 99.99 per cent.
owned by Mr Azevedo) for the benefit of the Company (in accordance
with Brazilian laws which require two quota holders for limited
liability companies).
Funding of the Company prior to Admission
Prior to Admission, and in order to meet working capital
requirements, the Company has received funding in the following
manner:
-- On 15 December 2016, pursuant to the terms of a convertible
loan note, the Company was granted a loan in the amount of
US$300,000, with an interest rate payable of 20 per cent. per
annum, from Sagert Road Investments LLC, an Oregan based entity.
The convertible loan note provides that Sagert Road Investments LLC
may at any point before 15 December 2017, being the maturity date,
and before payment in full by the Company of the loan amount,
convert the principal balance into fully paid Ordinary Shares in
the Company (at the Placing Price of the Company). If Sagert Road
Investments LLC exercises its conversion right, no interest shall
be payable. If the Company elects to repay in cash the convertible
loan note prior to the expiry date, the full amount of interest
that would have been accrued over the year is still payable.
-- On 15 December 2016, pursuant to the terms of a convertible
loan note, the Company was granted a loan in the amount of
US$100,000, with an interest rate payable of 20 per cent. per
annum, from Craig Hubler Profit Sharing Plan, an Oregan based
entity. The convertible loan note provides that Craig Hubler Profit
Sharing Plan may at any point before 15 December 2017, being the
maturity date, and before payment in full by the Company of the
loan amount, convert the principal balance into fully paid Ordinary
Shares in the Company (at the Placing Price of the Company). If
Craig Hubler Profit Sharing Plan exercises its conversion right, no
interest shall be payable. If the Company elects to repay in cash
the convertible loan note prior to the expiry date, the full amount
of interest that would have been accrued over the year is still
payable.
(together the "Convertible Loan Notes")
Neither of the Convertible Loan Notes has been converted into
Ordinary Shares in the Company as part of the Admission process,
and therefore the full amount of each remains outstanding.
Immediately following Admission (and therefore prior to 15 December
2017), the Company intends to fully settle, in cash, the principal
and interest outstanding under the Convertible Loan Notes,
totalling, in aggregate, US$480,000.
OVERVIEW OF BRAZIL AND THE GLOBAL PGM MARKET
Country Overview
Brazil is a country of approximately 204 million people on a
land mass of over eight million square km, thereby placing the
country, on a land mass basis, as the fifth largest in the world.
Brazil is often grouped, alongside Russia, India and China, as one
of the 'BRIC' economies and benefits from a large domestic market,
diversified economy and a broad selection of trading partners.
Foreign Direct Investment in the country was estimated at US$78.9
billion in 2016.
The political institutions in Brazil are well established. Until
2016, the country had experienced more than 25 years of stable
democracy, with policy makers showing a continued commitment
towards maintaining economic stability. However, Brazil has
recently faced a political crisis following the impeachment of
President Dilma Rousseff on 31 August 2016, who was found guilty of
breaking budgetary laws. In May 2017, the Brazilian stock markets
and currency dropped significantly after corruption allegations
emerged surrounding the current President Michel Temer, which has
also led to numerous calls for him to resign and fresh elections be
called. President Michel Temer refutes the allegations and is
ignoring calls for him to resign - the situation remains fluid.
From 2003 to 2014, Brazil experienced a period of social and
economic development in which over 29 million people emerged out of
poverty. According to The World Bank, from 2002 to 2012, the income
of the bottom 40 per cent. of the population grew, in real terms,
on average by 7.1 per cent. Brazil is Latin America's largest
economy and the world's ninth largest economy with GDP in 2015 in
excess of US$1.7 trillion. The country was also one of the first
emerging markets to begin a recovery following the global financial
crisis that began in 2008. By 2010 both investor and consumer
confidence recovered significantly, such that GDP growth reached
7.5 per cent. that year.
During 2015 and 2016, Brazil experienced a period of deep
recession. GDP decelerated consistently since 2010, from an average
annual growth rate of approximately 4.5 per cent. between 2006 to
2010 to approximately 2.1 per cent. between 2011 and 2014. GDP
declined by approximately 3.8 per cent. in 2015 and it was expected
to have contracted by at least 3 per cent. in 2016. The Central
Bank of Brazil is now easing monetary policy more aggressively,
which representatives of the Central Bank of Brazil believe will
assist with the emergence of Brazil's economy from recession. In
addition, the government is actively working to support the
economy, and in March 2017 launched an infrastructure concession
programme that seeks to kick-start investment for infrastructure.
In 2015, the Brazilian government announced US$64 billion in new
infrastructure investment, with investment from China anticipated
to be in excess of US$50 billion. GDP is poised to return to growth
in 2017 as a result of lower inflation, improved confidence and a
less-tight monetary policy, as outlined. Whilst the improvement is
not expected to be significant this year, data from the Central
Bank of Brazil's Focus Bulletin suggests that GDP should increase
2.3 per cent. in 2018.
The Directors believe the country has excellent demographic
trends, with the population growing by over 15 per cent. since
2000, with a fast-growing middle class and increasing urbanisation.
Approximately 86 per cent. of the population live in urban
environments. Brazil's economy is largely driven by household
consumption and has well developed service, manufacturing,
agricultural and mining sectors.
Overview of the PGM market
Approximately 80 per cent. of the world's PGM supply comes from
producers operating in South Africa's Bushveld Complex, although
Russia's "Norilsk Nickel Group", is the largest producer of
palladium. Producers operating in the Bushveld Complex are
predominantly high-cost producers largely as a result of falling
production volume and input cost inflation. South Africa's capital
investment in platinum production has fallen from US$4 billion to
US$1 billion over the last seven years and platinum output from
producers in South Africa is forecast to fall from 4.2Moz in 2016
to 4Moz in 2017.
The PGM market is currently characterised by a supply deficit.
In 2016, total PGM supply was 17.6 Moz whilst demand was 19.2 Moz.
Demand and supply for PGMs is predominantly driven by platinum and
palladium and these two metals are the key drivers of the PGM
basket price. Over the last 10 years, demand for PGM commodities
has been dominated by palladium demand (9.4Moz in 2016) whereas, on
the supply side, it has been dominated by a platinum supply
deficit; the platinum deficit for 2016 is considered to have been
520,000oz, and platinum demand is expected to reach 9Moz by 2025
(8.2Moz in 2016). However, these favourable macroeconomic
conditions for platinum and palladium prices have not translated
into significant price increases, which is considered to be the
result of large above ground inventory. Over the last 10 years, the
platinum price has traded at a premium to the palladium price
whilst palladium is the largest market by volume.
The primary use of PGMs is in auto catalysts (catalytic
converters). Of the PGMs, platinum is the superior performer in
diesel catalysts due to its resistance to sulphur and lead whilst
palladium is preferred in petrol catalysts mainly due to its lower
price.
Demand for jewellery, particularly in new and emerging markets,
is a significant driver of platinum demand although not of
palladium, likely a result of palladiums lighter weight. According
to data from Johnson Matthey, China accounted for 62 per cent. of
the platinum jewellery demand in 2016 and 5 per cent. of palladium.
However, this represented a 26 per cent. and 16 per cent. drop in
demand respectively from a year earlier.
PGM demand, in general, grows in line with global GDP growth,
which in the short to medium term is likely to be characterised by
higher growth from China, India and other emerging markets being
offset by slower growth in more mature western markets. In the long
term, platinum demand will be driven by jewellery demand and
continued auto catalyst growth versus consumer take-up of electric
and hybrid vehicles. Palladium demand in the long term is likely
also to be driven by auto catalyst growth, as well as any policy
moves by governments to reduce diesel fuel consumption. Platinum
and palladium are actively traded on a number of exchanges,
including The London Platinum and Palladium Market.
The Directors believe that the Company has a significant
competitive advantage over its international competitors,
particularly those operating in the Bushveld Complex, as a result
of the low-cost production economics of the Pedra Branca Project.
At the current PGM basket price, the Directors believe many of the
producers operating in the Bushveld Complex are considered to be
loss-making.
OVERVIEW OF THE PEDRA BRANCA PROJECT
Project Location
The Project is located 280km southwest of Fortaleza, the capital
of Ceara State, northeastern Brazil. Access to the project area is
via a paved Brazilian state Highway (BR020) that connects Fortaleza
to Brasilia. At the town of Bom Jesus, 260km by road from
Fortaleza, a dirt road branches off to the east to the village of
Capitão Mor, 18km to the east. Driving time from Fortaleza is
approximately four to six hours.
Location of the Pedra Branca Project - see PDF
Project History
Dubbed Pedra Branca, the complex was discovered in the 1960s by
local government geologists who were exploring the area for its
chromite potential and by 1969, five holes were drilled into the
Esbarro prospect establishing 43,000 tonnes of material grading 10
- 28 per cent. chromite.
The project then sat idle until 1985, when South African-based
Gencor and Rio Tinto identified platinum- palladium mineralization
associated with the chromite bands. Targeting separate areas on the
ultramafic belt, the companies completed airborne magnetic and
radiometric surveys, as well as mapping, soil sampling and
trenching. The work resulted in the discovery of 10-15 scattered
showings of chromitite and copper- nickel soil geochemical
anomalies. Rio Tinto focused on the most northerly chromite
occurrence, known as Esbarro 1 and 2, which lie within 400m of each
other. Meanwhile, Gencor targeted the central and southern portions
of the ultramafic belt carrying out trenching and drilling eight
holes into the Traipia 1 and Trapia 2 showings. Both Rio Tinto and
Gencor ceased exploration following a slump in platinum and
palladium prices.
As the price of platinum and palladium started to increase in
the late 1990s, Altoro Gold Corp. (which has since merged with
Denver-based Solitario Exploration & Royalty Corp.) acquired
the project and started drilling in 1999. In January 2003, Anglo
American Platinum signed a joint venture agreement with Solitario
Exploration & Royalty Corp. and continued to invest in the
project sufficiently to secure majority ownership and in 2011
assumed management of the joint venture.
Throughout Anglo American Platinum's 12-year involvement they
advanced the project through several development gates which
included, inter alia:
-- Extensive resource drilling on the main target deposits
bringing the total drilled meters to ca. 30,000m at a drill spacing
of 25 - 40 metres;
-- Resource estimate and scoping study in 2005;
-- Drill core process metallurgical tests in 2005 and 2006;
-- Ground geophysics, target generation and target drilling 2007 - 2012;
-- Resampling of all historical drill core;
-- SAMREC compliant resource estimate 2012;
-- Regional scale, high quality airborne geophysics 2013;
-- Additional process metallurgy test studies in 2013; and
-- Geophysics target generation and drilling 2014.
As noted above, in 2014, the Pedra Branca Project was deemed to
be a non-core asset by Anglo American Platinum, which facilitated
the sale of Pedra Branca to Garrison Capital and then to the
Company.
The Project
The Pedra Branca Project consists of three Mining Licenses
(being 800.095/99, 800.096/99 and 800.097/99) and 44 Exploration
Licenses (refer to the CPR in Part VI of the Admission Document for
the relevant license numbers) covering approximately 55,000
hectares. The project area consists of five main prospects, Santo
Amaro, Curiu, Cedro, Esbarro and Trapia and seven other associated
targets, with Mineral resources being defined on all of the
prospects save for Santo Amaro.
52 per cent. of the JORC-compliant resource of 23.138 Mt (at
1.28 g/t containing 0.95 Moz of platinum, palladium and gold) is
contained within the three Mining Licenses, which encompasses all
of the Mineral resources defined in the Curiu and Esbarro
prospects. The majority of the Mineral resources defined for the
Cedro prospect, along with all of the Mineral resources defined for
the Trapia prospect, are contained within seven of the Exploration
Licences. The balance of the Mineral resources defined for the
Cedro prospect is contained within one of the Mining Licences. The
prospects and other targets in the Pedra Branca Project are shown
in Figure 3 of the PDF.
Location of the prospects and targets within the Pedra Branca
Project - see PDF
Geology
The PGM deposits at Pedra Branca are hosted by the
Paleoproterozoic ultramafic Troia Unit, consisting of altered
dunite intruded into Archaean Basement Gneisses. PGM mineralization
is associated with chromite- rich horizons and base metal sulphides
within the dunite. Regionally, the rocks have been deformed by at
least three deformation events which have left the dunite intrusion
folded and dismembered.
Exploration
Exploration was carried out by a number of previous companies
throughout the project's 50-year history. The last of these
companies, Anglo American Platinum, completed, amongst other work,
a total recheck and validation of the project database. The Company
has integrated all the available information validated by Anglo
American Platinum and carried out their own validation
programme.
The exploration database consists of remote sensing, geological
mapping, soil and stream sediment sampling programs, ground and
airborne geophysics, diamond drilling, topographic surveys,
laboratory chemical analyses, petrography, process mineralogy and
metallurgical ore characterization data.
See the table below which lists the number of diamond drilling
holes undertaken by the previous exploration companies' programmes
as well as the number of samples that were assayed.
Table 1: Pedra Branca Drill Hole Databases Summary
Drilling Method Total of Drill Total length Samples with
Holes Chemical
results
------------------ --------------- ------------- -------------
Diamond Drilling 351 25,726 m 9,349
------------------ --------------- ------------- -------------
Source: Competent Person's Report
Process Metallurgy
Extensive drill core and field samples have been analysed by
bench scale flotation tests. These tests have confirmed that the
Pedra Branca ore can be processed by conventional methods as used
on other PGM- copper-nickel-chrome operations.
Resource Model
GE21 executed the geological modelling, the grade estimation and
the classification of the mineral resources of the Pedra Branca
Project (Curiu, Esbarro, Trapia and Cedro prospects; no mineral
resource was prepared for the Santo Amaro prospect). In doing so,
the following set of factors was taken into consideration: the
quantity and spacing of the available data, the interpretation of
the mineralization controls, the type of mineralization, and the
quality of the data that was utilised.
The modelling and the estimates were developed with Gemcom
Surpac 6.1.4 software. The Project's database was based on UTM zone
24 south, SIRGAS2000.
Classification
The Pedra Branca Project mineralisation zones are classified as
Measured, Indicated and Inferred Mineral resources based on the
assessment of the input data, geological interpretation and quality
of grade estimation and are based on the JORC (2012) Code.
Density
The density applied in the block model was defined by the IDW
(inverse distance weighting) estimate of values obtained by the
experimental specific gravity test with litho types in drill core
samples. Altogether, 2026 density determinations tests were carried
out on all rotative drill holes. Sample data from the drill hole
database was estimated by IDW separately on each zone (oxide,
transition and sulphide).
Cut-off Grade
A cut-off grade of 0.3 g/t equivalent Au was applied based on a
"reasonable expectation of eventual economical extraction", to
support a statement of the resource based on positive economic
performance, using equivalent gold content prices and general costs
based on similar projects in Brazil.
Pit Optimisation to Resource Classification
Pit optimisations were undertaken for each of the mineralization
zones using optimistic economic parameters to determine the limits
of the mineral resource. This procedure is recommended to guarantee
a "reasonable expectation of eventual economical extraction", to
support a statement of the resource based on positive economic
performance.
Resource Reporting
The total Pedra Branca Project Mineral resource estimate, with a
cut-off of 0.3g/t grade of equivalent gold applied is 23.1Mt at
1.28g/t PGM and 952.4Koz PGM is shown in Table 1.
Mineral resources which are not classified as mineral reserves
have not yet demonstrated their economic viability. The estimate of
mineral resources may be materially affected by environmental,
permitting, legal, marketing, or other relevant issues.
Table 2: Pedra Branca Mineral Resource Estimate
Grade Tonnage Table - 30 March 2017. Pedra Branca Deposit: Total
Aggregated Mineral Resource - Effective Date: 30 March 2017. Block
Model: 20m X 10m X 2m (5m X 2.5m X 0.5m) Considered Equivalent Gold
Cut-off Grade: 0.30 g/t
Zone Classification Tonnes PGE Pd Pt Au PGM Pd Pt Au
(kt) (g/t) (g/t) (g/t) (g/t) (koz) (koz) (koz) (koz)
------------ ---------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Oxide Measured 1,339 1.230 0.802 0.398 0.030 52.9 34.5 17.1 1.3
Indicated 3,836 1.555 0.932 0.584 0.040 191.8 114.9 72.0 4.9
Inferred 3,636 1.920 1.133 0.767 0.019 224.4 132.5 89.7 2.3
Sub Total 8,811 1.656 0.995 0.631 0.030 469.1 281.8 178.8 8.5
------------ ---------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Transition Measured 698 1.255 0.831 0.404 0.020 28.2 18.6 9.1 0.4
Indicated 1,536 1.307 0.833 0.440 0.033 64.5 41.2 21.7 1.6
Inferred 2,182 1.095 0.699 0.371 0.025 76.8 49.0 26.0 1.7
Sub Total 4,416 1.194 0.767 0.400 0.027 169.5 108.9 56.8 3.9
------------ ---------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Sulphide Measured 949 1.481 0.973 0.487 0.022 45.2 29.7 14.9 0.7
Indicated 2,586 1.005 0.570 0.396 0.040 83.6 47.4 32.9 3.3
Inferred 6,376 0.902 0.471 0.360 0.071 185.0 96.6 73.9 14.6
Sub Total 9,911 0.984 0.545 0.382 0.058 313.7 173.8 121.6 18.5
------------ ---------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Grand
Total 23,138 1.280 0.759 0.480 0.041 952.4 564.5 357.2 30.7
----------------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
*PGM Calculation: Pd+Pt+Au
*Source: Competent Person's Report
Conclusions
In preparing the CPR, GE21 reviewed geological reports and maps,
miscellaneous technical papers, company letters and memoranda, and
public and private information and have made the following
conclusions:
-- The Troia geological Unit at the Pedra Branca project shows
significant and continuous Platinum Group Metal mineralization.
-- The geological genetic model and mineralization style is well defined and understood.
-- The Project has sufficient quality geological data to model
and estimate mineral resources compliant with the JORC (2012) Code.
This includes data relating to drilling quality, quantity and
spacing, data capturing and sampling methods, quality control, and
density data.
-- The Pedra Branca Project contains a JORC (2012) Code
compliant resource of 23.138 million tonnes at 1.28 g/t containing
952,400 ounces of platinum + palladium + gold, classified in
Measured, Indicated and Inferred Mineral resources.
-- There is a reasonable expectation of eventual economic
extraction. GE21 has considered current and similar project
operating costs in Brazil and expected process metallurgy
recoveries from test results conducted on the Pedra Branca ore.
-- In the context of all information reviewed and observations
during the site visit, no environmental issues have been identified
at the Project.
-- There are no material resource issues preventing the Company
from advancing the Project toward the intended goal of economic
extraction.
Future work programme
Based on the current project results, GE21 recommends that the
Company completes minor additional resource and reserve drilling, a
bulk metallurgy test study, and a scoping study to determine
operation parameters and likely financial model. This work stream
will be essential to secure the required permitting to progress
Pedra Branca to near-term commercial pilot production. As part of
this, database sample validation will need to be undertaken by the
Company at another certificated laboratory.
GE21 estimates a budget of US$650,000 to complete the above
exploration programme, with which the Company broadly agrees. All
exploration work will initially be focused on the defined Mineral
resource areas of the Curiu, Cedro and Esbarro prospects that sit
within the three Mining Licenses.
The Company intends to carry out the work programme on the
following timetable:
Activity Date
--------------------------- ------------------
Reserve drilling Q3 2017
--------------------------- ------------------
Bulk metallurgy test study Q4 2017
--------------------------- ------------------
Resource upgrade Q4 2017 - Q1 2018
--------------------------- ------------------
Scoping study Q4 2017 - Q1 2018
--------------------------- ------------------
Environmental permitting Q1 2018 - Q2 2018
--------------------------- ------------------
In the medium term, GE21 recommends that Jangada carry out a
field campaign to test other anomalies defined by previous
exploration programmes with the overriding proviso that in any
future drilling and exploration programmes, Jangada maintain the
procedures and methodology, including QAQC definitions, used by
Anglo American Platinum.
Subject to raising significant additional funding, the Directors
intend to work towards the commencement of trial mining and then
commercial production at an initial rate of 30,000 ounces per annum
within 12-18 months following Admission.
Competent Person's Report Disclosure
Further information can be found in the Competent Person's
Report set out in Part VI of the Admission Document.
FINANCIAL INFORMATION, CURRENT TRADING AND PROSPECTS FOR THE
GROUP
Part III of the Admission Document contains audited historical
financial information on the Company for the year ended 30 June
2016 and unaudited interim historical financial information on the
Company for the six month period ended 31 December 2016. Part IV of
the Admission Document contains audited historical financial
information on Pedra Branca for the three years ended 31 December
2016. An unaudited pro forma statement of net assets of the Group
is set out in Part V of the Admission Document.
The Directors are confident in the current business activities
and future prospects of the Group, which will be centred around the
continued execution of the Group's business plan as set out in this
announcement and the recruitment of further staff as operations
expand. The Directors believe that, along with the support of
senior management, they have the necessary skills and experience to
deliver on this strategy.
BOARD & MANAGEMENT
Directors
Mr Brian Keith McMaster, aged 46 - Executive Chairman
Mr McMaster is a Chartered Accountant, a registered and official
liquidator and has over 20 years' experience in the areas of
corporate reconstruction and turnaround, and performance
improvement. Previously, Mr McMaster was a partner of the
restructuring firm KordaMentha and prior to that was a partner at
Ernst & Young. During his time at both of these firms, Mr
McMaster was instrumental in the recapitalisation and listing of
over twenty Australian companies on the ASX.
Mr McMaster's career to date includes significant working
periods in the United States, South America, Asia and India. Mr
McMaster is also the Executive Chairman of the Brazilian-focused
AIM-quoted company, Harvest Minerals Limited, is a founding
director in venture capital and advisory firm, Garrison Capital Pty
Ltd, and is also currently a director of a number of ASX listed
companies.
Mr Luis Mauricio Ferraiuoli de Azevedo, aged 53 - Non-Executive
Director
Mr Azevedo is a resource industry professional with over 35
years of international experience. He is both a licensed lawyer and
geologist with over 25 years of business and mining experience
specifically in Brazil. He is currently the Managing Partner at FFA
Legal Ltda, a legal firm he founded with its main office in Rio de
Janeiro, Brazil, and which is focused solely on natural resources
companies.
Mr Azevedo is also a Non-Executive Director of Harvest Minerals
Limited and previously worked for Western Mining Corporation,
Barrick Gold Corporation and Harsco Corporation. He assembled land
packages that resulted in four initial public offerings of Canadian
companies in Brazil (Talon Metals Corporation, Avanco Resources
Ltd, Beadell Resources Ltd, Brazilian Gold Corporation) since 2004.
Mr Azevedo also sits on the board of directors of Avanco Resources
Ltd, Brazil Minerals Inc and Talon Metals Corporation.
Mr Azevedo received a geology degree from UERJ - Universidade do
Estado do Rio de Janeiro in 1986, a law degree from Faculdade
Integradas Cândido Mendes in 1992, and a post graduate degree from
PUC-Rio, Pontifícia Universidade Católica of Rio de Janeiro in
1995.
Nicholas Kurt von Schirnding, aged 54 - Independent
Non-Executive Director
Mr von Schirnding is an experienced board-level executive with
over 25 years' experience in the natural resources sector.
Previously, Nick was CEO of Asia Resource Minerals plc (formerly
Bumi plc), a FTSE listed mining company, where he played a
significant role in restructuring the group. Mr von Schirnding was
also previously the non-executive deputy chairman of Berau Coal,
one of Indonesia's largest coal producers. He is currently a
Non-Executive Director of AIM quoted gold mining company, Ortac
Resources Limited.
Mr von Schirnding has a Bachelor of Law from the University of
Cape Town.
Louis Emmanuel Castro, aged 58 - Independent Non-Executive
Director
Mr Castro has over 30 years' experience in accounting and
corporate finance both in the UK and overseas. He is a
Non-Executive Director of AIM quoted Stanley Gibbons plc and
recently was the Chief Financial Officer at Eland Oil & Gas
plc, an AIM quoted company where he was one of two executive
directors. Previously he was the Managing Director of Northland
Capital Partners in London and before this he was Head of Corporate
Finance at Matrix Corporate Capital and at Insinger de Beaufort. He
started his career by qualifying as a Chartered Accountant with
Coopers & Lybrand (now PWC).
Mr Castro has widespread international experience of advising
the Boards of companies. He has led on numerous public listings and
has been chairman of the audit committee at Eland Oil & Gas plc
and at Pan European Terminals plc.
Mr Castro is a Fellow of the Institute of Chartered Accountants
in England and Wales. He graduated in 1980 from Birmingham
University with a BSc & BComm (Hons) in Engineering Production
& Economics.
Senior Management
Mr Peter Heinrich Muller, Chief Operating Officer
Mr Muller is a professional geologist with mining and
exploration experience gained through a variety of international
roles, including at the Pedra Branca Project. From 2011 to early
2017, Mr Muller was employed by Anglo American Platinum, which
included, between 2012 and 2015, time as the Managing Director at
the Pedra Branca Project. At the Project, he was responsible for
all technical and corporate aspects and their execution. Mr Muller
also spent over two years working at the Amandelbult mining complex
in South Africa, where he was involved with on-mine exploration, as
well as introducing operational efficiencies.
Mr Muller holds a B.Sc. (Hons) in Applied Geology from
Stellenbosch University and is a member of both the Geological
Society of South Africa and the Prospectors and Developers
Association of Canada.
DETAILS OF THE PLACING, THE GARRISON FEE SHARES AND THE ST
BRIDES FEE SHARES
Pursuant to the Placing, Beaufort Securities has conditionally
raised GBP2.25 million (before expenses) for the Company, through
the placing of the Placing Shares with investors at the Placing
Price, conditional, inter alia, upon Admission.
Following Admission, the Placing Shares will collectively
represent approximately 22.8 per cent. of the Enlarged Share
Capital. The Placing, which is not underwritten, is conditional
upon, inter alia, Admission becoming effective by not later than
8.00 a.m. on 29 June 2017 (or such date as the Company, Strand
Hanson and Beaufort Securities may agree, being not later than 13
July 2017).
The Placing Shares will be issued as fully paid and will, upon
issue, rank pari passu with the Existing Ordinary Shares including
the right to receive all dividends and other distributions
declared, made or paid on or in respect of such shares after their
date of issue, being the date of Admission.
Pursuant to the Garrison Consultancy Agreement, Garrison Capital
will be issued 2,355,600 new Ordinary
Shares (the Garrison Fee Shares) in lieu of cash payment for
consultancy services undertaken by Garrison
Capital for the Company, further details of which are set out in
paragraph 11.8 of Part VIII of the Admission Document. Admission of
the Garrison Fee Shares is expected to occur at the same time as
the Placing Shares.
Pursuant to the St Brides Fee Agreement, St Brides Partners
Limited will be issued 160,000 new Ordinary Shares (the St Brides
Fee Shares) in lieu of cash payment for public relations services
undertaken by St Brides Partners Limited for the Company, further
details of which are set out in paragraph 11.9 of Part VIII of the
Admission Document. Admission of the St Brides Fee Shares is
expected to occur at the same time as the Placing Shares.
Following Admission, the Directors will, between them, hold
91,177,800 Ordinary Shares, representing approximately 46.2 per
cent. of the Enlarged Share Capital, as referred to in paragraph
6.1 of Part VIII of the Admission Document. Following Admission,
certain other significant shareholders, as referred to in paragraph
9.1 of Part VIII of the Admission Document, will each hold three
per cent. or more of the Enlarged Share Capital.
There will be a total of 197,515,600 Ordinary Shares (including
the Placing Shares, the Garrison Fee Shares and the St Brides Fee
Shares), 15,250,000 Options and 7,900,624 Warrants in issue on
Admission. The existing aggregate shareholdings of Shareholders
prior to the Placing, the issue of the St Brides Fee Shares and
Admission will be diluted to 77.1 per cent. of the Enlarged Share
Capital.
Further details of the Placing Agreement are set out in
paragraph 11.1 of Part VIII of the Admission Document.
REASONS FOR THE PLACING AND USE OF PROCEEDS
Pursuant to the Placing, Beaufort Securities has conditionally
raised GBP2.25 million (before expenses) for the Company, through
the placing of the Placing Shares at the Placing Price. The net
proceeds of the Placing are estimated at approximately GBP1.6
million.
The gross proceeds of the Placing are GBP2.25 million (US$2.88
million), which the Board expects to deploy as follows, with a view
to:
1. advancing with the exploration programme suggested by GE21: US$665,000;
2. repaying outstanding loans and interest: US$480,000;
3. providing for working capital for the Company: US$925,000; and
4. satisfying fees and expenses of the Placing and Admission: US$810,000.
The Company has existing cash resources of approximately
GBP25,000 as at the date of this announcement, which will also be
used for general working capital purposes.
LOCK INS AND ORDERLY MARKET ARRANGEMENTS
Each of the Locked In Shareholders has undertaken to the
Company, Strand Hanson and Beaufort Securities that they will not
dispose of any interest in the Ordinary Shares held by them for a
period of 12 months from the date of Admission and, for the 12
months following that period, that they will only dispose of their
holdings with the consent of Beaufort Securities and then through
Beaufort Securities from time to time so as to maintain an orderly
market in the Ordinary Shares.
In total, 137,355,600 Ordinary Shares representing 69.5 per
cent. of the Enlarged Share Capital at Admission are subject to the
prohibitions on disposals described above in this paragraph 10.
In addition, the beneficial interests of Mark Sumner (held
through Adelheid Holdings LLC) in the Company are subject to a 24
month orderly market arrangement, which provides that his Ordinary
Shares will not be disposed of during that period without the
consent of Beaufort Securities and Strand Hanson, and then only
through Beaufort Securities.
Further details of the lock-in and orderly market arrangements
are set out in paragraph 11.5 of Part VIII of the Admission
Document.
APPLICABILITY OF THE CITY CODE AND THE CONCERT PARTY
The City Code is issued and administered by the Panel. The Panel
has been designated as the supervisory authority to carry out
certain regulatory functions in relation to takeovers pursuant to
the Directive on Takeover Bids (2004/25/EC). Its statutory
functions are set out in and under Chapter 1 of Part 28 of the
Companies Act 2006 (as amended by the Companies Act 2006 (Amendment
of Schedule 2) (No 2) Order 2009).
The Company is a public limited company incorporated in England
& Wales and the Enlarged Share Capital will be admitted to
trading on AIM. Accordingly, the City Code will apply to the
Company.
The City Code governs, inter alia, transactions which may result
in a change of control of a public company to which the City Code
applies. Under Rule 9 of the City Code, where any person acquires,
whether by a series of transactions over a period of time or not,
an interest in shares which (taken together with shares in which
persons acting in concert with him are interested) carry 30 per
cent. or more of the voting rights of a company which is subject to
the City Code, that person is normally required by the Panel to
make a general offer to all the remaining shareholders of that
company to acquire their shares. Similarly, when any person,
together with persons acting in concert with him, is interested in
shares which in aggregate carry not less than 30 per cent. of the
voting rights of a company and not more than 50 per cent. of such
voting rights and such person, or any person acting in concert with
him, acquires an interest in any other shares which increases the
percentage of shares carrying voting rights in which he is
interested, a general offer will normally be required in accordance
with Rule 9.
An offer under Rule 9 must be made in cash (or be accompanied by
a cash alternative) and at not less than the highest price paid by
the person required to make the offer, or any person acting in
concert with him, for any interest in shares of the company during
the 12 months prior to the announcement of the offer.
Under the City Code, a concert party arises when persons acting
together pursuant to an agreement or understanding (whether formal
or informal) cooperate to obtain or consolidate control of, or
frustrate the successful outcome of an offer for, a company subject
to the City Code. Control means an interest or interests in shares
carrying an aggregate of 30 per cent. or more of the voting rights
of the company, irrespective of whether the holding or holdings
give de facto control.
The Panel considers the Company's pre-Admission shareholders,
being those persons representing the beneficial interests of Mr
McMaster (amounting to 23.4 per cent. on Admission), Mr Wood and
his close family members (amounting to, in aggregate, 23.4 per
cent. on Admission), Mr Azevedo (amounting to 22.8 per cent. on
Admission) and Mr Sumner (amounting to 7.6 per cent. on Admission),
all to be acting in concert in relation to the Company (the
"Concert Party"). Upon Admission, the Concert Party will be
interested in Ordinary Shares representing, in aggregate, 77.1 per
cent. of the Enlarged Share Capital. The Concert Party is also
interested in 9,000,000 Options.
Accordingly, following Admission and for so long as the Concert
Party is interested in Ordinary Shares carrying more than 50 per
cent. of the Company's voting share capital (for the purposes of
the City Code), it may increase its interest (including through the
exercise of Options) in the Company without incurring an obligation
under Rule 9 to make a general offer for the Company. However, the
Panel may regard as giving rise to an obligation to make an offer
(or first obtaining a waiver from the Panel), the acquisition by a
single member of the Concert Party of an interest in shares
sufficient to increase the shares carrying voting rights in which
he is interested to 30 per cent. or more, or if he is already
interested in 30 per cent. or more, which increases the percentage
of shares carrying voting rights in which he is interested.
The Concert Party will therefore, subject to the provisions of
the Relationship Agreement, be able to pass or defeat ordinary and
special resolutions of the Company.
RELATIONSHIP AGREEMENT
The Company, Strand Hanson, and the individual members of the
Concert Party have entered into the Relationship Agreement to
govern the relationship between the Group and the Concert Party,
such agreement to become effective upon Admission.
Under the Relationship Agreement each member of the Concert
Party agrees, amongst other things, for so long as the Concert
Party and its respective Associates hold at least 20 per cent. of
the issued share capital of the Company:
(i) that the board of directors is balanced at all times, with
directors independent of the Concert Party ("Independent
Directors") having a casting vote in the event of a split board,
otherwise a majority of Independent Directors. If an Independent
Director ceases to be either an Independent Director or a Director,
one or more new Independent Directors will be appointed as soon as
reasonably practicable to the board;
(ii) the Concert Party shall not be permitted to (i) vote on any
resolution to cancel the Company's admission to trading on AIM
without the approval of a majority of the Independent Directors; or
(ii) requisition a general meeting of the Company in order to seek
to propose a resolution to appoint or remove any Director or
officer of the Company or amend the Articles in such a way which
could reasonably be expected to adversely affect the independence
of the Company from the Concert Party;
(iii) that it will not take any action that would preclude the
Group from carrying on business independently from the Concert
Party and any of its respective associates; and
(iv) that any transactions or agreements between the Concert
Party and any of its respective associates on the one hand and any
member of the Group on the other hand, and any amendments to any
existing agreements between them, will be approved by a majority of
the Independent Directors.
Further details on the Relationship Agreement are set out in
paragraph 11.4 of Part VIII of the Admission Document.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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