TIDMJAN
RNS Number : 8048N
Jangada Mines PLC
25 January 2023
Jangada Mines plc / EPIC: JAN.L / Market: AIM / Sector:
Mining
25 January 2023
Jangada Mines plc ('Jangada' or 'the Company')
Corporate Update
Jangada Mines plc, a natural resources development company with
interests in Brazil and elsewhere, is pleased to provide an update
on activities with regards to the Company's projects and
investments.
The Company's strategy remains to acquire, develop and invest in
projects primarily targeting commodities and technologies related
to the renewable energy sector, where companies such as Jangada,
which have an established track record and ability to finance
projects, can make significant Return On Investments in targeted
project selection. Commodity markets related to the EV/critical
minerals space have been very strong over the last 18 months,
endorsing the Company's strategy, while bulk commodities such as
iron ore, have been more volatile and under pressure.
As previously reported, Jangada's Pitombeiras project's
commodity suite is iron ore, vanadium, and titanium. The headline
100.3% post-tax Internal Rate of Return, a US$96.5 million post-tax
Net Present Value (8% discount rate), a US$145.9 million post-tax
undiscounted operating cash flow, and a 13-month payback, were
announced earlier this year, with the pricing for the economic
evaluation used being, Fe/V2O5 concentrate was US$165.64/t, U$120/t
for the Fe component and US$45.64 for the V2O5. A price of US$220/t
was used for the TiO2. With the Measured, Indicated and Inferred
resource of 8.26Mt from only 3 of 8 known magnetic targets being
targeted, there remains potential resource upside. With the above
project economics and the fact that the asset is technically and
geologically sound, discussions with international and local off
takers were progressed throughout 2022.
Given the volatility of bulk commodities and market uncertainty
in the global demand for iron ore, it became apparent that the
optimal course was to progress with local end-users/steel
producers, whereby the Company's supply (once developed and
extracted) would be blended into the mix of a larger processor.
These discussions were hindered in H2 2022 as Brazil entered
election season, which curtailed many on-ground investment and
business decisions, but this hindrance has now subsided with the
election of President Lula.
Despite current iron ore market conditions, the Pitombeiras
project is viewed by the Board as high quality, as demonstrated in
the economic studies, and has elicited significant interest. The
Board continues to keep discussions live with in-country offtake
partners. At this stage, the Company has not progressed the
titanium to feasibility status because without an off-take
arrangement for the iron ore, the Titanium is inaccessible and
accordingly, the project is dependent upon favourable iron ore
market conditions.
In addition to Pitombeiras, the Company has progressed with two
additional investment opportunities, namely targeting strategic
minerals and metals, has borne fruit with its investments in
Blencowe Resources PLC (LON:BRES) ('Blencowe') and Fodere Titanium
Limited ('Fodere').
Blencowe investment
The acquisition of a significant interest in Blencowe, which
principal asset is the 100% owned Orom-Cross graphite project in
Uganda, is exciting. Blencowe has a JORC resource of 24.5Mt @ 6.0%
TCG based on drilling undertaken on less than 5% of the project
area, part of which already benefits from a 21-year mining licence.
A Pre-Feasibility Study on the project published in July 2022
reported a Net Present Value of US$482m based on the existing
14-year mine life and outlined capex to first production of US$62m,
average EBITDA of US$100m per annum and a return of US$1.1bn in
free cash over the 14-year life.
More recently, it completed metallurgical test work that
exceeded its objectives with concentrate grades consistently
ranging between 95-98%, which are battery grade. The results not
only continue to underpin Orom-Cross concentrate as high quality in
all key areas relevant to end users, but the test work has
highlighted that it can now deliver these end results on a much
greater scale of raw material as processed.
Graphite demand is increasing rapidly, being the major component
of EV batteries. The Board truly believes that this is one of the
markets most discounted assets in terms of pricing and that its
9.5% holding, plus 7,625,000 warrants at 8p, in Blencowe will
translate into outstanding long-term value potential.
Fodere investment
Equally, Fodere, in which the Company holds a 7.7% interest, is
making excellent strides forward as it advances its
commercialisation strategy focused on producing titanium dioxide
and vanadium from waste materials. It is constructing a pilot plant
in South Africa which will have a production capacity in excess of
22,000 tons to produce titanium dioxide, vanadium pentoxide along
with alumina oxide and magnesium sulphate as by-products. The
expectation is for the pilot plant to be operational by Q2 2023.
Furthermore, underpinning its potential, Jeffry N. Quinn, the
former head of Tronox, an international ver tically integrated
producer of titanium dioxide and inorganic chemicals, has joined
the board of Fodere as Director.
The multi commodity portfolio approach particularly targeting
net zero related commodities is the main driver of Jangada's
strategy and one that the Board is actively committed to. Vanadium
redox flow batteries allow for static energy storage from renewable
energy generators such as wind and solar farms whose numbers have,
and are forecast to, increase exponentially, with international
climate change protocols needed to be adhered to across the world
to satisfy net zero commitments. Graphite is the largest mineral
component of an EV battery and again its demand profile is forecast
to rapidly increase in line with the adoption of EVs and the
phasing out of normally aspirated engines. While mining minerals
required for this transition is a necessity, so too is the need for
technology driven innovations focused on recycling to deliver a
fully circular economy. With the Pitombeiras Project and the
Company's investments in Blencowe Resources PLC and Fodere Titanium
Limited, its portfolio approach has given Jangada exposure to all
of the above. This strategy of project acquisition remains at the
forefront of the Company's plans.
The Company continues to evaluate multiple deals in commodities,
particularly associated with renewables and the battery metals
space. As detailed, developing this pipeline is a central pillar to
the Company's development, and the Board is hopeful of completing
further transactions in the not-too-distant future. Given the
Board's, in particular Luis Azevedo's in region connections and
history of success in identifying value accretive projects, South
America remains the preference for portfolio expansion, although
this is not exclusive.
Brian McMaster, Executive Chairman of Jangada said, "Jangada has
a highly experienced Brazilian centric legal, financial and
operational management team able to source and execute on projects.
The Board and team have a proven track record of being able to find
high value low-cost opportunities, such as the acquisition of the
Pedra Branca Platinum Group Metals Project, which was vended to TSX
listed, ValOre Metals. Pitombeiras is technically sound and has
excellent upside potential, the Board is just waiting for the right
pricing environment to push the button on its development.
"The investments in Blencowe and Fodere both look extremely
exciting, and the Company's acquisition and investment pipeline
remains highly active, with a deal anticipated in the coming
months. We maintain a strong treasury, with the ultimate aim being
to deliver shareholder value in spite of individual challenges and
price volatility, and the Board remains highly incentivised owning
42.7% of the equity in the Company. I look forward to updating the
market as soon as we have further news on our existing projects as
well as new acquisitions."
**ENDS**
For further information please visit www.jangadamines.com or
contact:
Jangada Mines plc Brian McMaster Tel: +44 (0) 20 7317
6629
Strand Hanson Limited Ritchie Balmer Tel: +44 (0)20 7409 3494
(Nominated & Financial James Spinney
Adviser)
Tavira Securities Jonathan Evans Tel: +44 (0)20 7100 5100
Limited
(Broker)
St Brides Partners Ana Ribeiro jangada@stbridespartners.co.uk
Ltd Isabel de Salis
(Financial PR)
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