TIDMJAN
RNS Number : 3275R
Jangada Mines PLC
27 February 2019
Jangada Mines plc / EPIC: JAN.L / Market: AIM / Sector:
Mining
27 February 2019
Jangada Mines plc ('Jangada' or the 'Company')
Unaudited Interim Results for 6 Months Ended 31 December
2018
Jangada Mines plc, a natural resources company developing the
Pedra Branca Project, South America's largest and most advanced
platinum group metals ('PGM') and nickel project ('Pedra Branca' or
'the Project'), and the Ptombeiras West Vanadium Project, is
pleased to announce its unaudited Interim Results for the six-month
period ended 31 December 2018.
Highlights
-- Secured a total fundraise package of GBP2.1 million to
progress a bankable feasibility study ('BFS') at Pedra Branca
polymetallic project and for general working capital
-- Received the Environmental Licence required for trial mining
at Pedra Branca by the Ceara State Environmental Department
-- Identified high-grade JORC-compliant economic nickel and
copper sulphide resource immediately beneath the existing PGM and
base metal resource potentially enhancing the already strong
project economics
o The new resource adds 8 million tonnes and could add circa
US$110 million to current estimated project revenue - a 10%
increase in estimated revenue
-- Updated and optimised the Project's process flowsheet,
delivered in partnership with Consulmet, resulting in a significant
reduction in projected plant capex costs and overall upfront capex
costs, including:
o 38% reduction in plant capex to US$33.8 million (previously
estimated at US$54.2 million)
o 32% reduction in overall capex figure to US$43.9 million
(previously estimated at US$64.9 million)
Post-Period End
-- Significant JORC-compliant resource upgrade including a 117%
increase in JORC classified ore to 74.84 million tonnes,
including:
o 64% increase in the Indicated category resources to 29.34
million tonnes
o 174% increase in Inferred category resources to 37.09 million
tonnes
o 103% increase in palladium equivalent ('Pd Eq') resource to
3.05 million ounces, derived from the following increases:
o 104% increase in base metal content to 362.5 million pounds
('Mlbs') attributed to newly discovered nickel sulphide
resource
-- Existing 1% Net Smelter Royalty ('NSR') on the Pedra Branca
project acquired by SilverStream SEZC, a dedicated precious metals
streaming and royalty business with investments across Australasia,
North and South America
Chairman's Statement
The Jangada story continues to evolve as our understanding of
the Pedra Branca PGM Project ('Pedra Branca' or 'the Project') in
Brazil deepens. Not only have we continued to strengthen the
Project's economics having worked on an updated flowsheet that
reduced its estimated overall CAPEX, we have also strengthened the
resource with resources including nickel, copper sulphide, vanadium
and titanium across the total project area.
Earlier in the year, we announced an increase in the JORC (2012)
Compliant Resource to 1.45 million ounces of PGM+Au, 140 Mlb of
nickel, 26 Mlb of copper and 6.7 Mlb of cobalt. This was followed
in June 2018 by the release of a Preliminary Economic assessment
('PEA') that confirmed Pedra Branca's potential to become a robust,
low CAPEX and OPEX, shallow, open pit operation demonstrating an
Net Present Value (7%) of US$192 million, an Internal Rate of
Return of 67% and 1.6-year payback. In October 2018, we announced
the identification of significant nickel and copper sulphide
anomalies at the Project immediately beneath the existing PGM and
base metal resource. Subsequently, we published an independent
nickel and copper maiden JORC resource estimate.
In November 2018, the anticipated overall CAPEX of the Project
was reduced by 32% to US$43.9 million (previously estimated at
US$64.9 million) following the creation of an updated process
flowsheet in partnership with Consulmet Metals (Pty) Ltd
('Consulmet'), which demonstrated a simpler and more efficient
process route. We anticipate that this will be reflected in reduced
operating cost metrics that will feed into the Bankable Feasibility
Study ('BFS').
Post period end in January 2019, we updated the market on our Q1
2019 work programme focussed on progressing the BFS through to
completion of the verification stage. We are hopeful that this will
confirm the economic and technical viability of the Project and
that the results will be available early in Q2. In January 2019, we
also announced a signi cant upgrade to the JORC (2012) compliant
resource, resulting in the substantial increase in the size and
categorisation of the resources at Pedra Branca to 74.84 million
tonnes of classified ore, 3.05 million ounces of palladium
equivalent and 2.17 million ounces in PGM+gold.
In February 2019, we provided an update on our vanadium
exploration activities at the Ptombeiras West vanadium deposit
having completed an expanded outcrop sampling campaign. Results
from 72 samples confirmed continuous high-grade vanadium, titanium
and iron grades at surface, with grades reported as high as 1.1 %
vanadium (V2O5), 14.3 % titanium (TiO2) and 61.4 % iron (Fe). The
average sample grades included 0.91 % vanadium (V2O5), 10.7 %
titanium (TiO2) and 53 % iron (Fe); average grades for vanadium and
titanium were three times higher than initially anticipated by
management. A 300m diamond core drilling programme intended to
confirm deposit continuity and extent is underway with preliminary
results expected soon.
The Market
The nickel price has strong long-term fundamentals due to
increasing demand from the stainless-steel market and the emerging
electric vehicle battery sector. In line with this, it has shown
resilience in recent months, where commodity prices have been
impacted by volatile macroeconomics. Likewise, vanadium is trending
for similar reasons in tandem with production output from China
dropping.
Financials
In September 2018, we agreed a total fundraise package of GBP2.1
million to advance the Project towards a BFS, quantifying the value
of the nickel sulphide deposit, additional hydrology and metallurgy
test work and exploration drilling at the vanadium project. This
included a placing to raise GBP1.05 million before expenses and an
agreement with Consulmet to accept shares in lieu of cash on
completion of work undertaken at the Project, , as well as a
12-month unsecured loan facility from Celtic Capital Pty Limited,
as trustee for Celtic Capital Trust for up to US$1.0 million, which
remains undrawn.
Post period end, we announced that SilverStream SEZC
('SilverStream'), a dedicated precious metal streaming and royalty
business with investments across Australasia, North and South
America, had acquired the existing 1% Net Smelter Royalty on the
Project from Solitario Zinc Corp. Having recognised the value in
Pedra Branca, we are delighted to welcome SilverStream as a
partner.
Outlook
We remain focused on advancing and expanding the breadth of the
exciting Pedra Branca Project and further strengthening its already
robust economics. The BFS is the next major milestone, which we are
on track to deliver in Q2 2019, alongside other value-driving
activities in the coming months. I am confident that we have the
right team to maintain the high level of activity needed to achieve
this and would like to thank both them, and our shareholders for
their continued support.
Brian McMaster
Executive Chairman
27 February 2019
CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE SIX MONTHSED 31 DECEMBER 2018
Unaudited Unaudited
Six months Six months Audited
to 31 to 31 Year ended
December December 30 June
2018 2017 2018
Notes $'000 $'000 $'000
Project costs - (24) (73)
Administration expenses (764) (594) (1,534)
Loss from continuing operations (764) (618) (1,607)
Finance expense - (163) (34)
Loss before tax (764) (781) (1,641)
Tax expense 5 - - -
------------ ------------ ------------
Loss from continuing operations
and total loss for the period (764) (781) (1,641)
Other comprehensive income:
Items that will or may be classified
to profit or loss:
Currency translation differences
arising on translation of foreign
operations (32) 15 9
Total comprehensive loss attributable
to owners of the parent (796) (766) (1,632)
============ ============ ============
Loss per share attributable to
the ordinary equity holders of
the Company during the period
* Basic and diluted (cents) 6 (0.0) (0.0) (0.0)
============ ============ ============
CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 31 DECEMBER 2018
Unaudited Unaudited Audited
31 December 31 December 30 June
2018 2017 2018
Notes $'000 $'000 $'000
Assets
Non-current assets
Exploration and evaluation assets 7 563 247 324
Property, plant and equipment 3 9 4
566 256 328
Current assets
Other receivables 44 110 22
Cash and cash equivalents 718 800 198
762 910 220
Total assets 1,328 1,166 548
============= ============= =========
Liabilities
Current liabilities
Trade payables 254 10 74
Loans and borrowings 58 - 58
Accruals & other payables 68 152 153
------------- ------------- ---------
Total liabilities 380 162 285
Issued capital and reserves attributable
to owners of the parent
Share capital 8 125 102 102
Share premium 8 4,181 2,844 2,844
Translation reserve (25) 13 7
Retained earnings (3,333) (1,955) (2,690)
------------- ------------- ---------
Total equity 948 1,004 263
------------- ------------- ---------
Total equity & liabilities 1,328 1,166 548
============= ============= =========
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 31 DECEMBER 2018
Total equity
Share Share Translation Retained attributable
capital premium reserve earnings to owners
$'000 $'000 $'000 $'000 $'000
Balance as at 1 July 2018 102 2,844 7 (2,690) 263
--------- --------- ----------- ------------ ---------------
Total comprehensive loss
for the half-year
Loss for the half-year - - - (764) (764)
Other comprehensive loss - - (32) - (32)
--------- --------- ----------- ------------ ---------------
Total comprehensive loss
for the half-year - - (32) (764) (796)
--------- --------- ----------- ------------ ---------------
Transactions with owners
in their capacity as owners
Shares issued 23 1,337 - - 1,360
Share options issued - - - 121 121
--------- --------- ----------- ------------ ---------------
Total transactions with
owners 23 1,337 - 121 1,481
Balance at 31 December
2018 125 4,181 (25) (3,333) 948
========= ========= =========== ============ ===============
Balance as at 1 July 2017 102 2,844 (2) (1,336) 1,608
--------- --------- ----------- ------------ ---------------
Total comprehensive loss
for the half-year
Loss for the half-year - - - (781) (781)
Other comprehensive income - - 15 - 15
--------- --------- ----------- ------------ ---------------
Total comprehensive loss
for the half-year - - 15 (781) (766)
--------- --------- ----------- ------------ ---------------
Transactions with owners
in their capacity as owners
Shares options issued - - - 162 162
--------- --------- ----------- ------------ ---------------
Balance at 31 December
2017 102 2,844 13 (1,955) 1,004
========= ========= =========== ============ ===============
Total comprehensive loss
for the half-year
Loss for the half-year - - - (860) (860)
Other comprehensive loss - - (6) - (6)
========= ========= =========== ============ ===============
Total comprehensive loss
for the half-year - - (6) (860) (866)
========= ========= =========== ============ ===============
Transactions with owners
in their capacity as owners
Shares options issued - - - 125 125
========= ========= =========== ============ ===============
Total transactions with
owners - - - 125 125
--------- --------- ----------- ------------ ---------------
Balance at 30 June 2018 102 2,844 7 (2,690) 263
========= ========= =========== ============ ===============
CONDENSED UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHSED 31 DECEMBER 2018
Unaudited Unaudited Audited
31 December 31 December 30 June
2018 2017 2018
Cash flows from operating activities $'000 $'000 $'000
Loss before Tax (764) (781) (1,641)
Add back: depreciation 1 3 4
Non-cash share option charge 121 162 287
Decrease/(increase) in other receivables (22) 117 205
(Decrease)/increase in trade and other
payables 95 (457) (390)
Net cash outflow from operating activities (569) (956) (1,535)
------------- ------------- ---------
Investing activities
Development of exploration and evaluation
assets (239) (247) (324)
Net cash outflow from investing activities (239) (247) (324)
------------- ------------- ---------
Financing activities
Share capital issue 1,360 - -
Proceeds from related party borrowings - (58) -
Repayment of convertible loan notes - (400) (400)
Net cash from financing activities 1,360 (458) (400)
------------- ------------- ---------
Net movement in cash and cash equivalents 552 (1,609) (2,259)
------------- ------------- ---------
Cash and cash equivalents at beginning
of period 198 2,450 2,450
Movements in foreign exchange (32) (11) 7
Cash and cash equivalents at end of
period 718 800 198
============= ============= =========
NOTES TO THE UNAUDITED FINANCIAL INFORMATION
FOR THE SIX MONTHSED 31 DECEMBER 2018
1. General Information
The Company is a public limited company, incorporated on 30 June
2015 with the registration number 09663756 and with its registered
office at 20 North Audley Street, London W1K 6WE. The Company's
principal activities are the provision of mining services.
2. Accounting Policies
Basis of preparation
The interim unaudited financial information for the period ended
31 December 2018 has been prepared in accordance with IAS 34
Interim Financial Reporting. The results for the period ended 31
December 2018 are unaudited.
The condensed unaudited consolidated financial information for
the period ended 31 December 2018 has been prepared on a basis
consistent with, and on the basis of, the accounting policies set
out in the financial information on the Company set out in the
Company's published results for the year to 30 June 2018. The
unaudited interim financial statements of the Company have been
prepared on the basis of the accounting policies, presentation,
methods of computation and estimation techniques expected to be
adopted in the financial information by the Company in preparing
its annual report for the year ended 30 June 2019.
The financial information is presented in United States
Dollars($), which is also the functional currency of the Company
and Group and is the preferred currency of the owners of the
Company. Amounts are rounded to the nearest thousand ($'000),
unless otherwise stated.
New and amending Accounting standards
In the period ended 31 December 2018, the Directors have
reviewed all the new and revised Standards. It has been determined
by the Directors that there is no impact, material or otherwise, of
the new and revised Standards and Interpretations on the Group's
business and, therefore, no change is necessary to the Group's
accounting policies.
Accounting standards in issue but not yet effective
IFRS 16 "Leases"
This standard will require lessees to recognise most leases on
the balance sheet as liabilities.
This standard will be effective for Jangada Mines Plc's year
ending 30 June 2020.
The Directors do not expect the adoption of this standard will
have a material impact on the Jangada Mines Plc Financial
Information.
Going concern
As disclosed in the 30 June 2018 financial statements, the
Director's secured a fundraising package of GBP2.1 million, as
announced on 27 September 2018, that allows the company to continue
to develop the Pedra Branca project and provides general working
capital. The Directors are aware that the Group will require
further funding to finance the project through its pre-production
programme in Brazil. The Directors are confident that the Group
will be able to raise funds for such requirements from investors as
required although no binding funding agreement is in place at the
date of this report. These conditions indicate the existence of
material uncertainty which may cast significant doubt about the
Group and Company's ability to continue as a going concern.
The financial statements do not include the adjustment that
would result if the Group and Company were unable to continue as a
going concern.
Financial liabilities
The Company classifies its financial liabilities into one
category:
Other financial liabilities
Other financial liabilities include the other short-term
monetary liabilities, which are initially recognised at fair value
and subsequently carried at amortised cost using the effective
interest method.
Exploration and evaluation assets
Exploration and evaluation assets represent the costs of
pre-feasibility studies, field costs, government fees and the
associated support costs at the Group's Pedra Branca project.
Costs incurred prior to obtaining the legal rights to explore an
area are expensed immediately to the Statements of Profit or Loss
and Other Comprehensive Income. Only material expenditures incurred
after the acquisition of a license interest are capitalised.
Historically, the expenditures related to exploration and
evaluation have not been material, as the Company is active in
areas where there are minimal and immaterial exploration and
evaluation costs and therefore the costs in previous years have
been expensed.
3. Critical accounting estimates and judgements
The Company makes certain estimates and assumptions regarding
the future. Judgements, estimates and assumptions are continually
evaluated based on historical experience and other factors,
including expectations of future events that are believed to be
reasonable under the circumstances. In the future, actual
experience may differ from these estimates and assumptions. The
judgements, estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed
below.
Judgements
As discussed in Note 2 there exists a material uncertainty which
may cast significant doubt about the Group and Company's ability to
continue as a going concern. The Directors are confident that the
Company will be able to raise the required funds and therefore have
concluded that the financial statements should be prepared on a
going concern basis.
The Directors have considered the criteria of IFRS 6 regarding
the impairment of exploration and evaluation assets and have
decided based on this assessment that there is no basis to impair
the carrying value of its exploration assets (2018: $563,396, 2017:
$247,000) at this time.
Estimates and assumptions
The Company measures share options at fair value. For more
detailed information in relation to the fair value measurement of
such items, please refer to note 9.
4. Segment information
The Company evaluates segmental performance on the basis of
profit or loss from operations calculated in accordance with IFRS
8. In the Directors' opinion, the Group only operates in one
segment: mining services. All non-current assets have been
generated in Brazil.
The Directors believe that the Group's operations are not
subject to any significant seasonality.
5. Tax expense
Six months Six months
ended ended Year ended
31 December 31 December 30 June
2018 2017 2018
$'000 $'000 $'000
Loss on ordinary activities before
tax (764) (781) (1,641)
------------ ------------ -----------
Loss on ordinary activities multiplied
by standard rate of corporation tax
in the UK of 19% (2017: 19.75%) (145) (148) (312)
Effects of:
Unrelieved tax losses for the period
carried forward 145 148 312
Total tax charge for the period - - -
============ ============ ===========
Factors that may affect future tax charges
There were no factors that may affect future tax charges.
6. Earnings Per Share
Six months Six months
ended ended Year ended
31 December 31 December 30 June
2018 2017 2018
$'000 $'000 $'000
Loss for the period (764) (781) (1,641)
============ ============ ============
2018 2017 2018
Weighted average number of shares
in issue (basic & diluted) 213,619,678 197,515,600 197,515,600
============ ============ ============
Loss per share - basic & diluted
(cents) (0.0) (0.0) (0.0)
============ ============ ============
There is no impact from 34,999,996 warrants and 15,250,000
options outstanding at 31 December 2018 (2017: 15,250,000 options)
on the loss per share calculation because they are considered
anti-dilutive. These options could potentially dilute basic EPS in
the future.
There have been no transactions involving ordinary shares or
potential ordinary shares that would significantly change the
number of ordinary shares or potential ordinary shares outstanding
between the reporting date and the date of completion of these
financial statements.
7. Exploration & Evaluation Assets
Exploration and evaluation assets represent the costs of
pre-feasibility studies, field costs, government fees and the
associated support costs at the Group's Pedra Branca project.
8. Share Capital
Six months ended Six months ended Year ended
31 December 2018 31 December 2017 30 June 2018
Share Share Share
Issued Capital Issued Capital Issued Capital
Number $'000 Number $'000 Number $'000
------------ --------- -------------------
At beginning of period
ordinary shares of
0.04p each: 197,515,600 102 197,515,600 102 197,515,600 102
============ ========= =================== ========= ============ =========
Shares Issued as
part of placement 38,273,328 23 - - - -
Share issue costs - - - - - -
charged to share
premium
At end of period:
ordinary shares of
0.04p each: 235,788,928 125 197,515,600 102 197,515,600 102
============ ========= =================== ========= ============ =========
9. Share options
2018 2018 2017 2017
Average exercise Number of Average exercise Number of
price per options price per options
share option share option
$ $
At 30 June 0.065 15,250,000 0.065 15,250,000
Issued 15
October
2018 0.079 34,999,996 - -
At 31
December 50,249,996 15,250,000
----------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------
Vested and
exercisable
at 31
December 0.065 7,625,000 - -
========================================================== ===================================================== ========================================================== ==============================================================
No options expired during the years covered by
the above table.
Share options outstanding at the end of the year have the
following expiry date and exercise prices:
Grant date Expiry date Exercise Share options Share options
price 31 December 31 December
$ 2018 2017
31 December
2 June 2017 2019 0.065 15,250,000 15,250,000
The fair value at grant date is independently determined using
an adjusted form of the Black Scholes Model that takes into account
the exercise price, the term of the option, the impact of dilution
(where material), the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield,
the risk free interest rate for the term of the option and the
correlations and volatilities of the peer group companies. In
addition to the inputs in the table above, further inputs as
follows:
The model inputs for options granted during the period
included:
(a) options are granted for no consideration and vested options
are exercisable for a period of two and a half years after the
grant date: 2 June 2017.
(b) expiry date: 31 December 2019 (2017: 31 December 2019).
(c) share price at grant date: 5.5 pence.
(d) expected price volatility of the company's shares: 50% (2017: 50%).
(e) risk-free interest rate: 1.75% (2017: 1.75%).
(f) 50% of the share options vest 60 days post admission and the
remaining 50% vest 90 days post production.
Share options granted during the half year ended 31 December
2018 have the following expiry date and exercise prices:
Grant date Expiry Exercise Share options Share options
date price 31 December 31 December
$ 2018 2017
15 15
October October
2018 2020 0.079 34,999,996 -
The options were valued using the Black Scholes Model with
inputs noted in the above table and further inputs as follows:
(a) share price at grant date: 2.58 pence.
(b) expected price volatility of the company's shares: 50%.
(c) risk-free interest rate: 2.0%.
Subsequent Events
On 23 January 2019, the Company announced SilverStream SEZC
("SilverStream"), a dedicated precious metals streaming and royalty
business with investments across Australasia, North and South
America, has acquired the existing 1% Net Smelter Royalty ('NSR')
on the Pedra Branca project from Solitario Zinc Corp. ("Solitario")
(NYSE American: XPL; TSX: SLR).
On 28 January 2019, the Company announced a signi cant JORC
(2012) compliant resource upgrade resulting in substantial
increases in the size and categorisation of the resource at its
Pedra Branca project.
On 5 February 2019, the Company provided an update on its
vanadium exploration activities at the Ptombeiras West vanadium
deposit having completed an expanded outcrop sampling campaign.
Results from 72 samples confirmed continuous high-grade vanadium,
titanium and iron grades at surface, with grades reported as high
as 1.1 % vanadium (V(2) O(5) ), 14.3 % titanium (TiO(2) ) and 61.4
% iron (Fe).
10. Nature of Financial Information
The unaudited consolidated interim financial information
presented above does not constitute statutory financial statements
for the period under review.
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 ("MAR").
* ENDS *
For further information, please visit www.jangadamines.com or
contact:
Jangada Mines plc Brian McMaster (Chairman) Tel: +44 (0) 20 7317
6629
Strand Hanson Limited James Spinney Tel: +44 (0)20 7409
(Nominated & Financial Ritchie Balmer 3494
Adviser) Jack Botros
Brandon Hill Capital Jonathan Evans Tel: +44 (0)20 3463
(Broker) Oliver Stansfield 5000
St Brides Partners Isabel de Salis Tel: +44 (0)20 7236
Ltd Gaby Jenner 1177
(Financial PR)
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR CKODPPBKDNBB
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