TIDMJAN
RNS Number : 0427A
Jangada Mines PLC
21 December 2017
Jangada Mines plc / EPIC: JAN.L / Market: AIM / Sector:
Mining
21 December 2017
Jangada Mines plc ('Jangada' or the 'Company')
Audited 2017 Final Results
Jangada Mines plc, a natural resources company developing South
America's largest and most advanced platinum group metals ('PGM')
project (the 'Project'), is pleased to announce its audited annual
financial results for the year ended 30 June 2017. The Company will
shortly be posting the annual report & accounts to
Shareholders, together with a notice convening the annual general
meeting.
Overview:
-- Multiple development milestones achieved at Pedra Branca
since admission to trading on AIM in June 2017, quantifying the
upside potential of unique polymetallic deposit
-- Major mineral resource upgrade with Measured and Indicated
categories increased by 35% and 74% respectively
-- Independent re-evaluation, modelling and restatement of JORC
resource to 23Mt at 1.3 g/t (PGMs) containing 1Moz PGM + Au
mineralisation from surface - 77% of the Project now in measured
and indicated resource categories
-- Polymetallic nature confirmed with resource including highly
significant nickel, copper, cobalt and chrome credits, critical
technology metals in high demand
-- Scoping Study completed with exceptional results - IRR of 80%
and payback period of 1.3 years - confirmed multi-commodity ore
suite, mined at an average grade of 1.22 g/t PGM + Au with
additional credits from nickel, copper, chrome and cobalt - NPV of
US$158.4m at a 10% discount rate
-- Additional credits of cobalt, nickel and copper provide
significant impact on the economics of Pedra Branca and underpins
its potential to be a 'free platinum' operation
-- High-grade vanadium-titanium-iron mineralisation identified
adding further exploration upside
-- Authorisation received for pilot scale production -
application for trial mining licence to be submitted Q1 2018
-- Pre-feasibility study initiated with results due Q1 2018
-- Development goals continue to be hit - increasing resource
and proving significant polymetallic credits including copper,
cobalt, nickel and chrome
-- Project continues to offer huge exploration upside in terms
of commodity and scale both laterally and at depth
Brian McMaster, Executive Chairman of Jangada said, "We have
made amazing progress since listing in June this year and have
initiated multiple studies that continue to emphasise the genuinely
exciting potential of this polymetallic project, which is rapidly
approaching production. In the last six months, we have completed
metallurgical test results, increased our JORC Resource, underlined
the contribution available from nickel, copper, cobalt and chrome
and discovered the potential for vanadium, titanium iron ore
deposit. Furthermore, we announced the results of the Scoping
Study, which yielded an estimated IRR of 80% and a payback period
of 1.3 years, clearly demonstrating the outstanding potential of
the Project as a low, cost, shallow pit PGM operation with
excellent financial returns. With the demand for technology metals
increasing, the additional credits of cobalt, nickel and copper
will have a significant impact on the economics and underpins our
belief that Pedra Branca has the potential to be a 'free platinum'
operation."
"We believe we have created a huge amount of value since listing
that unfortunately has not been recognised by the market. 2018 is
looking to be just as busy, commencing with the results of the
Pre-feasibility Study in Q1; we therefore look forward to the New
Year, further advancement of the Project and the recognition of the
quality of Pedra Branca."
Director's Statement
This is my inaugural Chairman's Statement since the Company
successfully listed on AIM on 29 June of this year (the
'Admission'). At that time and as part of the Admission process,
the Company raised GBP2.25 million, before expenses, through an
oversubscribed placing. These funds were raised to advance an
aggressive development programme at the Company's 'Pedra Branca
Platinum Group Metals Project' (the 'Project') in Brazil. The
programme involved reserve drilling, a bulk metallurgy test study,
and a scoping study to determine operation parameters and likely
financial model. The team has worked overtime to tick these boxes
and is now focused on the next stage as we look to move towards
trial mining.
The Project is the largest and most advanced Platinum Group
Metals ("PGM") project in South America. Located 280 km from the
port city of Fortaleza in the northeast of Brazil, the Project
consists of three mining licenses and 44 exploration licenses over
an area of 55,000 hectares. Shortly after Admission, we announced
an updated JORC (2012) compliant resource estimate, significantly
increasing the in-situ value of the currently declared 1 million
ounces of PGM+Au resources at the Project. The estimate now
includes 23.138 Mt of ore in the 'Measured', 'Indicated' and
'Inferred' categories, containing 109 million pounds of nickel and
23 million pounds of copper grading at 0.214% Ni and 0.045% Cu. The
significance of the additional nickel and copper credit within the
Pedra Branca ore zone is that the incremental value of these
elements will off-set the costs of producing PGM and will accrue
material profitability upside at limited additional cost.
Just weeks after the updated JORC resource estimate, high-grade
vanadium-titanium-iron mineralisation was confirmed from samples
across five locations. Strong market dynamics for vanadium
pentoxide, which incidentally has risen circa 500% since January
2016, once again bolstered our confidence that we have a highly
valuable polymetallic asset.
The next box to tick was the Scoping Study, which was announced
at the end of October 2017 and confirmed the Project's potential to
become a robust shallow open pit mine with low capital and
operation expenditure, ultimately lending itself to yield
attractive financial returns in a short payback period. It
suggested an internal rate of return of 80% and a payback period of
1.3 years, clearly demonstrating the potential of the polymetallic
mine. The addition of the by-product credits was once again
mentioned as having a significant positive impact on the economics,
underpinning our belief that the Project has the potential to be a
'free platinum' operation, where by-product credits cover the costs
of PGM production.
Looking ahead, we expect to announce a pre-feasibility study in
the near future and follow this up with trial mining in H1 2018. In
anticipation of this, we started the application process for a
trial mining permit and environmental permit.
In summary, we set out with a clear strategy to develop this
high-value, multi-commodity resource and have hit key value
triggers in a timely manner, confirming the historical work
totalling circa US$35 million undertaken by previous operators,
including Anglo American Platinum. With the work conducted since
listing, we have created a huge amount of value that unfortunately
has not been recognised by the market. I am confident that as we
receive our environmental permit, publish our production flow
sheets and pre-feasibility study, all scheduled for early next
year, and as we hit more targets, the true value will be more
accurately understood.
Finally, I would like to thank shareholders for their support
and our dedicated team for their commitment to the development of
the Project.
B K McMaster
Director
Group Strategic Report for the Period Ended 30 June 2017
The directors present the strategic report for the year ended 30
June 2017.
INTRODUCTION
Jangada Mines Plc (the "Company") was incorporated as an
acquisition vehicle for the purposes of acquiring mining concerns
in Brazil. The first acquisition was made on 30 April 2016 when the
Company acquired the Pedra Branca project. The Company acts as a
holding company for its subsidiary undertaking (together, the
"Group").
The financial statements are presented in thousands of US
Dollars ($'000). The financial statements have been prepared in
accordance with the requirements of the International Financial
Reporting Standards adopted by the European Union ("IFRS").
REVIEW OF THE BUSINESS
The Company was incorporated and commenced trading on 30 June
2015. 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).
On 29 June 2017 the Company was admitted to trading on the AIM
market of the London Stock Exchange and placed 45 million ordinary
shares at 5p per share in its initial public offering ("IPO") in
order to fund further exploratory analysis and drilling activities
at Pedra Branca do Brasil Mineracao S/A's ("Pedra Branca") advanced
stage Platinum Group Metals ("PGM") exploration project in the
northeast of Brazil.
Much of the IPO and integration expenditure has been charged to
the profit and loss account. Accordingly, the results show a
substantial loss in the period, though this is in accordance with
management expectations.
PRINCIPAL RISKS AND UNCERTAINTIES
There are a number of potential risks and uncertainties, which
could have a material impact on the long-term performance of the
Group and could cause actual results to differ materially from
expected results.
Management considers the following to be the principal risk and
uncertainties relating to the Group:
Foreign exchange risk
The Group holds significant cash funds in British Pounds
Sterling and operates and reports in US Dollars. As a result the
Company and Group are exposed to foreign exchange risk on the
movement between the two currencies. The Group manages this risk by
monitoring exchange rate movements and assessing their likely
impact on the Group's operations.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient
liquidity is available to meet foreseeable needs and to invest cash
assets safely and profitably.
External funding facilities are managed to ensure that both
short-term and longer-term funding is available to provide
short-term flexibility whilst providing sufficient funding to the
working capital requirements of its subsidiary.
Regulatory decisions and changes in the regulatory
environment
The Group must comply with an extensive range of requirements
that regulate and supervise the licensing and operation of its
mining operations in different jurisdictions. In particular, there
are agencies which monitor and enforce regulation and competition
laws which apply to the mining industry.
Decisions by regulators regarding the granting, amendment or
renewal of licenses to the Group or to third parties could
adversely affect future operations in these geographic areas.
The Group mitigates this risk by monitoring changes to the
regulatory landscape and ensuring the Group complies with all
necessary requirements.
Emerging market footprint may present exposure to unpredictable
economic, political, regulatory, tax and legal risks
Political, regulatory, economic and legal systems in emerging
markets may be less predictable than in countries with more stable
institutional structures. Since the Group operates in and is
exposed to emerging markets, the value of investments in these
markets may be adversely affected by political, regulatory,
economic, tax and legal developments which are beyond the Group's
control and anticipated benefits resulting from acquisitions and
other investments made in these markets may not be achieved in the
time expected, or at all.
The Group mitigates the risk associated with operating in
emerging markets by closely monitoring economic and currency
situations and developing business continuity plans to allow the
Directors to respond effectively to a country economic crisis.
KEY PERFORMANCE INDICATORS
The key financial performance indicator for the Group is the
overall performance of its investment in its subsidiary
undertaking.
During the year the Group made a consolidated loss attributable
to the shareholders of the Company of $1.3m. This was in line with
business plans and the directors' expectations whilst the Group
invests significantly in the Pedra Branca PGM Project.
The Group also reviews budgets and monitors pre-production
timing targets as non-financial performance indicators.
DIRECTORS' EQUITY INTEREST IN THE COMPANY
The interests (all of which are beneficial unless otherwise
stated) of the directors and their immediate families and the
persons connected with them (within the meaning of section 252 of
the Companies Act 2006, the "2006 Act")) in the issued share
capital of the Company or the existence of which could, with
reasonable diligence, be ascertained by any director are as
follows:
No. of No. of ordinary
ordinary % of shares over
shares share which options
held capital are granted
Directors' interests:
Brian McMaster (1) 46,177,800 23.4% 3,000,000
Luis Azevedo (2) 45,000,000 22.8% 2,000,000
Nicholas von Schirnding - - 1,000,000
Louis Castro - - 1,000,000
(1) Includes those ordinary Shares held through Mr McMaster's
wholly-owned vehicle, Gemstar Investments Limited, and half of the
Garrison Fee Shares issued on Admission.
(2) Held through a corporate vehicle, Flagstaff International
Investments Ltd, on Mr Azevedo's behalf.
STRATEGY AND FUTURE DEVELOPMENTS
The Group's key strategic goal is to exploit the opportunities
available to it through its ownership of the Project. Wherever
possible, the Group will collaborate with experienced contractors
to reduce capital expenditure and utilise existing infrastructure
to maximise shareholder value.
This report was approved by the directors on 20 December
2017.
B K McMaster
Director
Director's Report for the Year Ended 30 June 2017
The directors present their report and the audited financial
statements for the year ended 30 June 2017.
DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the Group strategic
report, the directors' report and the financial statements in
accordance with applicable law and regulations.
The 2006 Act requires the directors to prepare financial
statements for each financial period. The directors have elected to
prepare the financial statements in accordance with International
Financial Reporting Standards adopted by the EU ("IFRS"). Under the
2006 Act the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of
the state of affairs of the Company and the Group and of the profit
or loss of the Group for that period. In preparing these financial
statements, the directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent; and
-- prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the Group will continue
in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the 2006 Act. They are also
responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
PRINCIPAL ACTIVITIES
The Company acts as a holding company. The principal activity of
the Group is the operation of businesses engaged in the exploration
and development of PGM mining assets in Brazil, the initial such
business being that of its subsidiary, Pedra Branca.
RESULTS AND DIVIDS
The loss for the period, after taxation, amounted to $1.3
million (2016: $41,000).
The directors do not recommend payment of a dividend.
GOING CONCERN
The Group will require further funding to finance 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.
DIRECTORS
The directors who served during the period were:
L E Castro (appointed 5 May 2017)
L M F De Azevedo (appointed 5 May 2017)
B K McMaster (appointed 30 June 2015)
N K Von Schrinding (appointed 5 May 2017)
M G W Wood (resigned 1 May 2017)
FINANCIAL INSTRUMENTS
Details of the Company's financial instruments are given in Note
11.
MATTERS COVERED IN THE STRATEGIC REPORT
As required by section 414C (11) of the 2006 Act, the strategic
report contains a fair review of the business; the principal risks
and uncertainties faced by the business; and the key financial and
non-financial performance indicators as considered by the
directors. This information is therefore excluded from the
directors' report.
AUDIT COMMITTEE
The board operates an Audit Committee, chaired by Louis Castro.
This Committee carries out duties as set out in its AIM Admission
Document, supervising the financial and reporting arrangements of
the Group. During the period, no issues arose that the directors
consider appropriate to disclose in their report.
REMUNERATION COMMITTEE
The board has delegated to its Remuneration Committee, chaired
by Nicholas von Schirnding, certain responsibilities in respect of
the remuneration of senior executives. During the period, none of
the senior executives' salaries or benefits changed and no issues
arose that the directors consider appropriate to disclose in their
report.
NOMINATION COMMITTEE
The board has delegated to its Nomination Committee, chaired by
Nicholas von Schirnding, certain responsibilities in respect of the
appointment of senior executives. During the period, no additional
appointments have been made to disclose in this report.
INDEPENT AUDITORS
Crowe Clark Whitehill LLP has indicated its willingness to be
reappointed as independent auditors and a proposal for their
reappointment will be made at the annual general meeting.
STATEMENT OF DISCLOSURE OF INFORMATION TO AUDITORS
Each person who was a director at the date of approval of this
report confirms that:
-- so far as the director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
-- the director has taken all the steps that he ought to have
taken as a director in order to make himself aware of any relevant
audit information and to establish that the Company's auditor is
aware of that information.
This report was approved by the directors on 20 December
2017.
B K McMaster
Director
Independent Auditor's Report to the Members of Jangada Mines
PLC
OPINION
We have audited the financial statements of Jangada Mines Plc
(the "Parent Company") and its subsidiary (the "Group") for the
year ended 30 June 2017, which comprise:
-- the Group Statement of Comprehensive Income for the year ended 30 June 2017;
-- the Group and Parent Company Balance Sheets as at 30 June 2017;
-- the Group and Parent Company Cash Flow Statements for the year then ended;
-- the Group and Parent Company Statements of Changes In Equity for the year then ended; and
-- the notes to the financial statements, which include a
summary of significant accounting policies and other explanatory
information.
The financial reporting framework that has been applied in the
preparation of the Group and Parent Company financial statements is
applicable law and International Financial Reporting Standards as
adopted by the European Union (IFRSs).
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the Parent Company's affairs as at 30
June 2017 and of the Group's loss for the year then ended;
-- the Group's financial statements have been properly prepared in accordance with IFRS;
-- the Parent Company's financial statements have been properly
prepared in accordance with IFRS as applied in accordance with the
requirements of the Companies Act 2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
'Auditor's responsibilities for the audit of the financial
statements' section of our report. We are independent of the Group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
MATERIAL UNCERTAINTY RELATED TO GOING CONCERN
We draw attention to Notes 2 and 3 of the financial statements
which indicate further funding will be required to finance the
Group's and Company's pre-production programme in Brazil. The
Directors are confident that the Company will be able to raise
these funds however there is no binding agreement in place at the
date of this report.
These conditions indicate the existence of a material
uncertainty and may cash doubt on the ability of the Group and
Company to continue as a going concern. Our opinion is not modified
in respect of this matter. The financial statements do not include
the adjustments that would result if the Group and Company were
unable to continue as a going concern.
OVERVIEW OF OUR AUDIT APPROACH
Materiality
In planning and performing our audit we applied the concept of
materiality. An item is considered material if it could reasonably
be expected to change the economic decisions of a user of the
financial statements. We used the concept of materiality to both
focus our testing and to evaluate the impact of misstatements
identified.
Based on our professional judgement, we determined overall
materiality for the Group financial statements as a whole to be
$50,000, based on 2% of the Group's total assets for the
period.
We use a different level of materiality ('performance
materiality') to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set based
on the audit materiality as adjusted for the judgements made as to
the entity risk and our evaluation of the specific risk of each
audit area having regard to the internal control environment.
Where considered appropriate performance materiality may be
reduced to a lower level, such as, for related party transactions
and directors' remuneration.
We agreed with the Audit Committee to report to it all
identified errors in excess of $1,000. Errors below that threshold
would also be reported to it if, in our opinion as auditor,
disclosure was required on qualitative grounds.
Overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the
Group and its environment, including Group-wide controls, and
assessing the risks of material misstatement at the Group
level.
The Group had very limited activity in the year ended 30 June
2017 but we performed work in both the UK and Brazil in order to
obtain sufficient, appropriate audit evidence.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these
matters.
Our audit procedures in relation to these matters were designed
in the context of our audit opinion as a whole. They were not
designed to enable us to express an opinion on these matters
individually and we express no such opinion.
Except for the matter described in the 'Material uncertainty
related to going concern' section, we have determined that there
are no key audit matters to communicate in our report.
OTHER INFORMATION
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our
audit
-- the information given in the Strategic Report and the
Directors' Report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the Directors' Report and Strategic Report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the company and
its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the
directors' report.
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of the directors for the financial
statements
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group's and Parent Company's ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Steve Gale FCA (Senior Statutory Auditor)
for and on behalf of
Crowe Clark Whitehill LLP
Statutory Auditor
London
20 December 2017
Consolidated Statement of Comprehensive Income for the Year
Ended 30 June 2017
Year Year
ended ended
Notes 30 June 30 June
2017 2016
$'000 $'000
Project costs (103) -
Administration expenses (1,072) (48)
Loss from continuing operations (1,175) (48)
Gain on bargain purchase - 7
Finance expense (122) -
Loss before tax (1,297) (41)
Tax expense 6 - -
--------- ---------
Loss from continuing operations (1,297) (41)
Other comprehensive income:
Items that will or may be classified
to profit or loss:
Currency translation differences
arising on translation of foreign
operations (3) 1
Total comprehensive income/(loss) (1,300) (40)
========= =========
Loss attributable to:
Owners of the parent (1,297) (39)
Non-controlling interests - (2)
--------- ---------
(1,297) (41)
========= =========
Total comprehensive loss attributable
to:
Owners of the parent (1,300) (39)
Non-controlling interests - (2)
--------- ---------
(1,300) (41)
========= =========
Loss per share attributable
to the ordinary equity holders
of the Company during the period
Basic and diluted ($'000) 7 (0.0) (0.5)
========= =========
The notes on pages 23 to 31 form part of these financial
statements.
Consolidated Balance Sheet as at 30 June 2017
As at As at
Notes 30 June 30 June
2017 2016
$'000 $'000
Assets
Non-current assets
Intangible assets - 1
Property, plant and equipment 8 12
8 13
Current assets
Other receivables 10 227 -
Cash and cash equivalents 2,450 3
2,677 3
Total assets 2,685 16
========= =========
Liabilities
Current liabilities
Loans and borrowings 11 458 31
Accruals 619 23
--------- ---------
Total liabilities 1,077 54
Issued capital and reserves
attributable to owners of the
parent
Share capital 12 102 -
Share premium 12 2,844 -
Translation reserve (2) 1
Retained earnings (1,336) (39)
--------- ---------
Total equity 1,608 (38)
--------- ---------
Total equity and liabilities 2,685 16
========= =========
The financial statements were approved and authorised for issue
by the directors and were signed on 20 December 2017.
B K McMaster
Director
The notes on pages 23 to 31 form part of these financial
statements.
As at As at
Notes 30 June 30 June
2017 2016
$'000 $'000
Assets
Current assets
Other receivables 10 350 -
Cash and cash equivalents 2,440 -
2,790 -
Total assets 2,790 -
========= =========
Liabilities
Current liabilities
Loans and borrowings 11 458 31
Accruals 619 7
--------- ---------
Total liabilities 1,077 38
Issued capital and reserves
attributable to owners of the
parent
Share capital 12 102 -
Share premium 12 2,844 -
Translation reserve (7) -
Retained earnings (1,226) (38)
--------- ---------
Total equity 1,713 (38)
--------- ---------
Total equity & liabilities 2,790 -
========= =========
The loss for the year dealt with in the Company accounts of
Jangada Mines plc was $1,188,000
(2016: $38,000).
The financial statements were approved and authorised for issue
by the directors and were signed on 20 December 2017.
B K McMaster
Director
The notes on pages 23 to 31 form part of these financial
statements.
Consolidated Cash Flow Statement for the Year Ended 30 June
2017
Year Year
ended ended
30 June 30 June
2017 2016
Cash flows from operating activities $'000 $'000
Loss before Tax (1,297) (41)
Add back: depreciation 4 -
Non-cash gain on bargain purchase - (7)
Increase in other receivables (227) -
Increase in trade and other
payables 596 15
Net cash flows from operating
activities (924) (33)
--------- ---------
Investing activities
Cash acquired by acquisition
of subsidiary - 6
Sale of plant, property and
equipment - 2
Net cash from investing activities - 8
--------- ---------
Financing activities
Share capital issue 2,960 -
Proceeds from related party
borrowings 33 31
Issue of convertible loan notes 380 -
Net cash from financing activities 3,373 31
--------- ---------
Net movement in cash and cash
equivalents 2,449 6
--------- ---------
Cash and cash equivalents at 3 -
beginning of period
Movements in foreign exchange (2) (3)
Cash and cash equivalents at
end of year 2,450 3
========= =========
The notes on pages 23 to 31 form part of these financial
statements.
Company Cash Flow Statement for the Year Ended 30 June 2017
Year Year
ended ended
30 June 30 June
2017 2016
Cash flows from operating activities $'000 $'000
Loss before Tax (1,188) (38)
Increase in other receivables (227) -
Increase in trade and other
payables 627 7
Net cash flows from operating
activities (788) (31)
--------- ---------
Financing activities
Share capital issue 2,946 -
Proceeds from related party
borrowings 27 31
Loans to subsidiary (123) -
Issue of convertible loan notes 380 -
Net cash from financing activities 3,230 31
--------- ---------
Net movement in cash and cash 2,442 -
equivalents
--------- ---------
Cash and cash equivalents at - -
beginning of period
Movements in foreign exchange (2) -
Cash and cash equivalents at 2,440 -
end of year
========= =========
The notes on pages 23 to 31 form part of these financial
statements.
Consolidated Statement of Changes in Equity for the Year Ended
30 June 2017
Attributable to owners
--------------------------------------------------------
Share Share Translation Retained Total Non-controlling Total
capital premium reserve earnings equity interests equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000
At 30 June 2015 - - - - - - -
Comprehensive
Income for the
year
Loss - - - (39) (39) (2) (41)
Total comprehensive
Income for the
year - - - (39) (39) (2) (41)
Transactions
with owners
Non-controlling
interest on acquisition
of subsidiary - 1 - 1 2 3
--------- --------- ------------ ---------- -------- ---------------- --------
Total transactions
with owners - - 1 - 1 2 3
As at 30 June
2016 - - 1 (39) (38) - (38)
========= ========= ============ ========== ======== ================ ========
Comprehensive
Income for the
year
Loss - - - (1,297) (1,297) - (1,297)
Other comprehensive
income - - (3) - (3) - (3)
--------- --------- ------------ ---------- -------- ---------------- --------
Total comprehensive
Income for the
year - - (3) (1,297) (1,300) - (1,300)
Transactions
with owners
Share issue 102 2,844 - - 2,946 - 2,946
--------- --------- ------------ ---------- -------- ---------------- --------
Total transactions
with owners 102 2,844 - - 2,946 - 2,946
As at 30 June
2017 102 2,844 (2) (1,336) 1,608 - 1,608
========= ========= ============ ========== ======== ================ ========
The notes on pages 23 to 31 form part of these financial
statements.
Attributable to owners
--------------------------------------------------------
Share Share Translation Retained Total
capital premium reserve earnings equity
$'000 $'000 $'000 $'000 $'000
At 30 June 2015 - - - - -
Comprehensive Income
for the year
Loss - - - (38) (38)
--------- --------- ------------ ---------- --------
Total comprehensive
Income for the year - - - (38) (38)
As at 30 June 2016 - - - (38) (38)
========= ========= ============ ========== ========
Comprehensive Income
for the year
Loss - - - (1,188) (1,188)
Other comprehensive
income - - (7) - (7)
--------- --------- ------------ ---------- --------
Total comprehensive
Income for the year - - (7) (1,188) (1,195)
Transactions with
owners
Share issue 102 2,844 - - 2,946
Foreign exchange movement - - - -
--------- --------- ------------ ---------- --------
Total transactions
with owners 102 2,844 - - 2,946
As at 30 June 2017 102 2,844 (7) (1,226) 1,713
========= ========= ============ ========== ========
The notes on pages 23 to 31 form part of these financial
statements.
Notes to the Financial Statement for the Year Ended 30 June
2017
1. General information
The Company is a public limited company, incorporated in England
and Wales on 30 June 2015 with the registration number 09663756 and
with its registered office at Level 2, 34 Dover Street, London W1S
4NG. The Company's principal activities are the provision of mining
services.
2. Accounting policies
Basis of preparation and going concern basis
The audited consolidated financial information has been prepared
in accordance with International Financial Reporting Standards
("IFRS") as adopted by the EU issued by the International
Accounting Standards Board, under the historical cost
convention.
These financial statements, for the year ended 30 June 2017, are
the first the Company has prepared in accordance with IFRS. The
previous financial statements for the year ended 30 June 2016, the
first accounts prepared since its incorporation, were prepared in
accordance with UK generally accepted accounting principles ("UK
GAAP").
Accordingly, the Company has prepared financial statements that
comply with IFRS applicable as at 30 June 2017, together with the
comparative period data for the year ended 30 June 2016, as
described in the summary of significant accounting policies. The
policies applied under the Company's previous accounting framework
have not impacted on equity or profit or loss.
The consolidated 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.
The preparation of consolidated financial information in
compliance with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise
judgement in applying the Company's and Group's accounting policies
(see below and Note 3).
As provided by section 408 of the 2006 Act, no statement of
comprehensive income is presented in respect of the Company. The
Company's loss for the year is disclosed on the Company balance
sheet.
As discussed in the Directors' report there exists a 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.
Accounting standards in issue but not yet effective
At the date of authorisation of these financial statements, a
number of standards and interpretations were in issue but not yet
effective. The Directors do not anticipate that the adoption of
these standards and interpretations, or any of the amendments made
to the existing standards as a result of the annual improvements
cycle, will have a material effect on the financial statements of
the year of initial application.
Basis of Consolidation
These are the first consolidated financial statements prepared
by the Company.
The Group consolidates the financial information of Jangada
Mines Plc and its subsidiary drawn up to 30 June each year. The
subsidiary is consolidated from the date of its acquisition, being
the date on which the Group obtains control, and continues to be
consolidated until the date that such control ceases. The Company
has control over a subsidiary if all three of the following
elements are present: power over the investee, exposure to variable
returns from the investee, and the ability of the investor to use
its power to affect those variable returns. Control is reassessed
whenever facts and circumstances indicate that there may be a
change in any of these elements of control.
The financial information of the subsidiary is prepared for the
same reporting year as the parent company, using consistent
accounting policies and is consolidated using the acquisition
method. Intra-group balances and transactions, including unrealised
profits arising from intra-group transactions, have been
eliminated. Unrealised losses are eliminated unless the transaction
provides evidence of an impairment of the asset transferred.
Pedra Branca's year end is 31 December and has not been adjusted
to be consistent with the Company's year end as it has been
impracticable to do so.
Business combination
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). On that basis, the financial information of
Pedra Branca has been included in the consolidated financial
statements from 30 April 2016.
Foreign currency
Transactions entered into by the Group in a currency other than
the currency of its primary economic environment in which it
operates (the "functional currency") are recorded at the rates
ruling when the transactions occur. Foreign currency monetary
assets and liabilities are translated at the rates ruling at the
reporting date.
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.
Taxation
The charge for current tax is based on the taxable income for
the period. The taxable result for the period differs from the
result as reported in the statement of comprehensive income because
it excludes items which are not assessable or disallowed and it
further excludes items that are taxable and deductible in other
years. It is calculated using tax rates that have been enacted or
substantially enacted by the statement of financial position
date.
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the Audited
consolidated statement of financial position differs from its tax
base.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profit will be
available against which the difference can be utilised.
The amount of the asset or liability is determined using tax
rates that have been enacted or substantively enacted by the
reporting date and are expected to apply when the deferred tax
liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Company
has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority
3. Critical accounting estimates and judgements
The Company makes certain estimates and assumptions regarding
the future. Estimates and judgements 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 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 the Directors' report 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.
Estimates and assumptions
The Company measures a number of items at fair value. For more
detailed information in relation to the fair value measurement of
such items, please refer to the applicable notes.
Financial instruments - Risk Management
The Company is exposed through its operations to the following
financial risks:
-- Credit risk;
-- Foreign exchange risk; and
-- Liquidity risk.
Credit risk
Credit risk is the risk of financial loss to the Company if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations. Credit risk also arises from cash and
cash equivalents and deposits with banks and financial
institutions.
The directors monitor the utilisation of the credit limits
regularly and at the reporting date does not expect any losses from
non-performance by the counterparties.
Foreign exchange risk
Market risk arises from the Company's use of foreign currency
financial instruments. It is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates (currency risk) or other market
factors (other price risk).
Liquidity risk
Liquidity risk arises from the Company's management of working
capital. It is the risk that the Company will encounter difficulty
in meeting its financial obligations as they fall due. The
Company's policy is to ensure that it will always have sufficient
cash to allow it to meet its liabilities when they become due.
In common with all other businesses, the Company is exposed to
risks that arise from its use of financial instruments.
Principal financial instruments
The principal financial instruments used by the Company, from
which financial instrument risk arises, are as follows:
-- Related party borrowings
-- Convertible loan notes
Capital management
The Company's policy is to maintain a strong capital base so as
to maintain investor, creditor and market confidence and to sustain
future development of the business.
There were no changes in the Company's approach to capital
management during the period.
The Company is not subject to externally imposed capital
requirements.
The Company's objectives when maintaining capital are to
safeguard the entity's ability to continue as a going concern.
The Company sets the amount of capital it requires in proportion
to risk. The Company manages its capital structure and makes
adjustment to it in the light of changes in economic conditions and
the risk characteristics of the underlying assets.
General objectives, policies and processes
The board of directors has overall responsibility for the
determination of the Company's risk management objectives and
policies. The overall objective of the board is to set policies
that seek to reduce risk as far as possible without unduly
affecting the Company's competitiveness and flexibility.
5. 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.
6. Tax expense
2017 2016
$'000 $'000
Loss on ordinary activities before
tax (1,297) (41)
-------- ------
Loss on ordinary activities multiplied
by standard rate of corporation
tax in the UK of 19.75% (2016:
20%) (256) (8)
Effects of:
Gain on bargain purchase not subject
to tax - (2)
Unrelieved tax losses carried forward 256 10
Total tax charge for the period - -
======== ======
Factors that may affect future tax charges
There were no factors that may affect future tax charges
The $256,000 (2016: $10,000) tax losses arose in Brazil and the
UK. No deferred tax asset has been recognised as, at 30 June 2017,
the Directors concluded that it was unlikely that there would be
future profits against which the unrelieved tax losses could be
utilised in the foreseeable future.
7. Earnings per share
2017 2016
$'000 $'000
Loss for the year (1,297) (41)
=========== ======
Weighted average number of shares
(basic & diluted) 17,931,667 75
=========== ======
Loss per share - basic & diluted
(US$'000) (0.0) (0.5)
=========== ======
The share options issued upon admission are not included within
the weighted average number of shares calculation as their effect
is anti-dilutive.
8. Staff costs and directors' remuneration
Staff costs, including directors'
remuneration, were as follows:
2017 2016
$'000 $'000
Wages and salaries 87 -
87 -
====== ======
Excluding directors, there was 1 member of staff during the year
ended 30 June 2017 (2016: Nil). Directors remuneration for the year
ended 30 June 2017 totalled $77,000 (2016: $Nil), as follows:
2017 2016
$'000 $'000
B K McMaster 69 -
L M F De Azevedo 4 -
L E Castro - -
N K Von Schrinding - -
M G W Wood 4 -
77 -
====== ======
9. Auditor's remuneration
2017 2016
$'000 $'000
Fees payable to the Company's auditor
for the audit of the Company's
annual accounts 26 6
Fees payable to the Company's auditor
for other services:
* Corporate finance 55 -
====== ======
10. Other receivables
Group Group Company Company
2017 2016 2017 2016
$'000 $'000 $'000 $'000
Current
Funds held at third
party 227 - 227 -
Group receivables - - 123 -
Total other payables 227 - 350 -
====== ====== ======== ========
11. Loans and borrowings
Group Group Company Company
2017 2016 2017 2016
$'000 $'000 $'000 $'000
Current
Related party loans 58 31 58 31
Convertible loan notes 400 - 400 -
Total loans and borrowings 458 31 458 31
====== ====== ======== ========
On 15 December 2016, the Company entered into a convertible loan
note with Craig Hubler Profit Sharing Plan as the lender for the
sum of US$100,000, with interest accruing at the rate of 20% per
annum and a maturity date of 15 December 2017. The lender had the
right, at the lender's option and sole discretion, at any time
after the inception of the loan note and prior to payment in full
of the note, to convert the principal balance into fully paid
ordinary shares of the Company equivalent to the amount subscribed
to in the note.
Also on 15 December 2016, the Company entered into a convertible
loan note with Sagert Road Investments LLC as the lender for the
sum of US$300,000, with interest accruing at the rate of 20% per
annum and a maturity date of 15 December 2017. The lender had the
right, at the lender's option and sole discretion, at any time
after the inception of the loan note and prior to payment in full
of the note, to convert the principal balance into fully paid
ordinary shares of the Company equivalent to the amount subscribed
to in the note.
On 24 August 2017, the two convertible loan notes and all
accrued interest was repaid in full.
12. Share capital
Share Share
Issued Capital Premium
Number $'000 $'000
At 30 June 2016: ordinary 3 - -
shares of 1p each
============ ================== ====================
18 May 2017: share issue
for nominal value 4,999,998 64 -
19 May 2017: shares issued
to directors in lieu of
fees 999,999 13
------------ ------------------ --------------------
Total as at 19 May share
split 6,000,000 77 -
19 May 2017: 25:1 share 150,000,000 - -
split into shares with nominal
value of 0.04p
29 June 2017: share issue
for 5p each 47,515,600 25 3,063
Share issue costs charged
to share premium - - (219)
At 30 June 2017: ordinary
shares of 0.0004p each: 197,515,600 102 2,844
============ ================== ====================
13. Subsidiary
The details of the sole subsidiary of the Company, which have
been included in this consolidated financial information are:
Name Registered office Proportion
of ownership
interest
Pedra Branca do Brasil Av. Jornalista 99.99%*
Mineracao S/A Ricardo Marinho,
Number 360, Office
113,
Barra da Tijuca,
Rio de Janeiro,
631-350
Brazil
*The Company holds 22,574,327 shares (referred to as quotas) of
R$1.00 each in Pedra Branca, fully subscribed and of which
19,904,630 shares are paid up to date. The remaining one quota of
R$1.00 fully subscribed and paid up to date is held by FFA Holding
& Mineracao Ltda (a vehicle 99.99 per cent. owned by Mr
Azevedo) for the benefit of the Company and in compliance with
Brazilian laws which require two quota holders for limited
liability companies.
The Company acquired its shares in Pedra Branca through the
following transactions:
-- on 30 April 2016, the Company acquired 61.54 per cent. of the
shares held in Pedra Branca from Garrison Capital;
-- on 16 February 2017, the Company acquired additional shares
in Pedra Branca from Garrison Capital and Anglo Platinum Brasil S.A
to take the Company's equity interest in Pedra Branca to
99.99%.
14. Related party transactions
During the period the Company entered into the following
transactions with related parties.
2017 2016
$'000 $'000
Garrison Capital Partners Limited:
Purchases made on Company's behalf
and included within borrowings 58 31
FFA Legal Ltda:
Legal services expensed during 15 -
year
====== ======
On admission to AIM the Company issued 2,355,600 shares to
Garrison Capital Partners Limited in relation to consultancy
services provided during the period. Further details of
transactions with Garrison Capital Partners Limited are disclosed
in Note 13.
The related party borrowings reflect the payments made on behalf
of the Company by Garrison Capital Partners Limited, a related
party due to having directors in common.
FFA Legal Ltda is a related party to the Group due to having a
director in common with Group companies.
Directors' remuneration is discussed within Note 8.
15. Subsequent Events
On 24 August 2017, the two convertible loan notes (discussed in
Note 11) and all accrued interest was repaid in full.
16. Ultimate controlling party
The Directors consider that the Company has no overall
controlling party.
*S *
This announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No 596/2014.
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
Isabel 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. Subject to obtaining additional funding, the
Company is aiming to construct a low cost, low capex open pit mine,
with a target to produce 35,000 oz/annum by the end of 2018 from
three existing mining licences with mineralisation commencing at
surface. Subject to securing further additional funding, the
intention is to increase production to 100,000 oz/annum in the
longer term. The Project has a JORC (2012) Compliant Resource of
approximately 1 million ounces of PGM+Au at a grade of 1.3 g/t,
109Mlbs of Ni, 23Mlbs of Cu, 6.4Mlbs of Co and 670kt of Cr. Circa
52% of this is 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR TBBRTMBITMMR
(END) Dow Jones Newswires
December 21, 2017 02:43 ET (07:43 GMT)
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