Second Unaudited Interim Results

Jangada Mines plc / EPIC: JAN.L / Market: AIM / Sector: Mining

30 October 2020

Jangada Mines plc ('Jangada' or the 'Company')

 

Second Unaudited Interim Results for the year ended 30 June 2020

 

Jangada Mines plc, a natural resources company, is pleased to announce its second unaudited Interim Results for the year ended 30 June 2020. Post period end, the Company changed its year end to 31 December. This change is driven by cost efficiencies in aligning its financial year end to that of ValOre Metals Corp ('ValOre'), in which Jangada has a current 17.68 per cent interest and representation on the ValOre board, as well as that of Jangada's Brazilian subsidiaries. In line with accounting standards, these interim results capture the 12 months ended 30 June 2020.

 

In line with the guidance issued by AIM Regulation in an Inside AIM notification dated 9 June 2020, and the ongoing COVID-19 related disruption to processes, the Company availed of the one month extension to 31 October 2020 by which it is required under AIM Rule 18 to publish its interim accounts for the twelve months ended 30 June 2020.

 

Thereafter, Jangada commits to releasing its audited financial statements and annual report for the eighteen months ended 31 December 2020 by the end of Q1 2021. From then on, the Company's financial reporting will be in line with AIM Rules 18 and 19.

 

Chairman's Statement

We began 2020 with our focus on continuing to realise value at our 100% owned Pitombeiras Vanadium Project ('Pitombeiras' or 'the Project'), located in the state of Ceará, Brazil and I am pleased to confirm that we have had great success in this regard.

 

As announced on 22 April 2020, a drilling programme at the Pitombeiras North and Goela targets was completed for a total of 1,360.80 metres and 19 drillholes.  Two additional assay results were also received, being 18.00 metres at 0.49% vanadium pentoxide ('V₂O₅'), 10.02% titanium dioxide ('TiO₂') and 49.61% ferric oxide ('Fe₂O₃') and 35.66 metres at 0.56% V₂O₅, 11.04% TiO₂ and 54.39% Fe₂O_3.  The purpose of this drilling was to evaluate the structural corridor associated with the known vanadium titanomagnetite ('VTM') mineralisation, within our licence and as a result of the consistency of returned grades, widths and continuity, the programme was deemed an overwhelming success, underpinning the significant prospectivity of Pitombeiras.

 

Final drilling results were announced in June and July 2020, with results including:

·      Pitombeiras North Target:

o  25.25 metres at 0.56% V₂O₅, 10.81% TiO₂ and 54.01% Fe₂O₃, including 7.00 metres at 0.73% V₂O₅, 14.14% TiO₂ and 68.91% Fe₂O₃ on drillhole DD20PI2

·      Goela Target:

o  27.75 metres at 0.65% V₂O₅, 12.95% TiO₂ and 63.69% Fe₂O₃, including 9.50 metres at 0.77% V₂O₅, 15.19% TiO₂ and 72.44% Fe₂O₃ on drillhole DD20PI24

 

Based on the results of the 2020 and 2019 drill work, in August 2020, the Company reported its initial National Instrument 43-101 compliant resource estimate for the Pitombeiras Project.  This comprised a total Resource estimate of 5.70Mt million tonnes at an average grade of 0.51% V₂O₅, 10.09% TiO₂ and 50.42% of Fe₂O₃ for a contained resource of 28,990 tonnes V₂O₅, with a breakdown as follows:

·    Indicated Resource estimate of 1.47 million tonnes at an average grade of 0.50% V₂O₅, 9.85 % TiO₂ and 49.78% of Fe₂O₃ for a contained resource of 7,297 tonnes V₂O₅

·    Inferred Resource estimate of 4.23 million tonnes at an average of 0.51% V₂O₅, 10.17% TiO₂ and 50.64% of Fe₂O₃ for a contained resource of 21,693 tonnes V₂O₅

 

Given the strength of the results from the drilling programme and the significant further upside identified as the resource remains open in all directions and only two out of eight known targets were drilled, Jangada announced its intention to conduct a further 2,000 metre drilling programme as infill and step out drilling for the Pitombeiras North and Goela targets, whilst also targeting the Pitombeiras South target.  This programme is designed to upgrade the confidence of the current resource base as well as to expand its overall size, with the objective of delineating a further approximate 10Mt of resource.  Results from this programme will be released as they become available.

 

Alongside the current drilling programme work continues to advance on other key development aspects, and in September 2020 the Company announced it had commissioned GE21 Consultoria Mineral ('GE21') to produce a Preliminary Economic Assessment report (the 'PEA') on the Pitombeiras Project.  The decision to appoint GE21 was based upon a further review of results achieved to date that the Company considered to support a fast track approach to production.  As part of the planning for production, additional metallurgical tests commenced in September 2020 with the objective being that by the time the drilling programme is complete, and expanded mineral resources estimated, the metallurgical tests will be readily available for the preparation of the PEA.

 

Financials

During August 2020, the Company sold 7,000,000 ValOre common shares for total gross proceeds of CAD$1,750,000 and also received the second tranche of 500,000 deferred consideration ValOre common shares.

 

The Company currently holds a 17.68% interest in ValOre, with the remaining 2,000,000 ValOre common shares due to Jangada payable in six-monthly instalments of 500,000 shares each.  The consideration will support the Company's working capital requirements, allowing us to substantially progress the development of Pitombeiras. As at 30 September 2020, the Company had cash reserves of US$912,441.

 

Impact of COVID-19

On 31 January 2020, the World Health Organisation ('WHO') announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China ('COVID-19 outbreak') and the risks to the international community as the virus spread globally beyond its point of origin. Because of the rapid increase in exposure globally, on 11 March 2020, the WHO classified the COVID-19 outbreak as a pandemic.

 

The full impact of the COVID-19 outbreak continues to evolve at the date of this report. Management is actively monitoring the global situation and its impact on the Company's financial condition, liquidity, operations, suppliers, industry, and workforce for the upcoming financial year and beyond.

 

Outlook

We are focussed on unlocking the value of Pitombeiras for the benefit of all stakeholders.  To this end, we have a clear development path thanks to a defined exploration programme, which is naturally being conducted in a COVID compliant way.  The ramp up of activity at Pitombeiras is timely given the favourable market dynamics that are placing increasing demand on clean energy materials such as vanadium and we look forward to sharing more exploration results in due course.

 

Finally, I would like to take this opportunity to thank shareholders for their continuing support and our team for their consistent hard work.  As an active investor in the Company myself, my interests are firmly aligned with shareholders and I truly believe the growth prospects of Jangada are excellent.

 

Brian McMaster

Executive Chairman

30 OCTOBER 2020

 

 

CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE TWELVE MONTHS ENDED 30 JUNE 2020

 

 

		Unaudited Twelve months to 30 June	Audited Year ended 30 June
		2020	2019
	Notes	$'000	$'000
Administration expenses		(1,121)	(1,590)
Operating Profit / (Loss) from continuing operations		(1,121)	(1,590)
Finance expense		(2)	(4)
Share of losses from associates		(546)	-
Profit / (Loss) before tax		(1,669)	(1,594)
Tax expense	5	-	-
Profit / (Loss) from continuing operations		(1,669)	(1,594)
Discontinued operations
Profit / (loss) from discontinued operations	7	6,104	(88)
Financial profit / (loss) for the year		4,435	(1,682)
Other comprehensive income:
Items that will or may be classified to profit or loss:
Currency translation differences arising on translation of foreign operations		(88)	3
Exchange differences reclassified on disposal of foreign operations		-	-
Currency translation differences arising on translation of equity investments		-	-
Total comprehensive Profit / (Loss) attributable to owners of the parent		4,347	(1,679)
Earnings / (Loss) per share from loss from continuing operations attributable to the ordinary equity holders of the Company during the period		Cents	Cents
-     Basic (cents)	6	(0.70)	(0.71)
-     Diluted (cents)	6	(0.70)	(0.71)
Earnings / (Loss) per share attributable to the ordinary equity holders of the Company during the period		Cents	Cents
-     Basic (cents)	6	1.85	(0.75)
-     Diluted (cents)	6	1.85	(0.75)

 

 

CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2020

		Unaudited 30 June	Audited 30 June
		2020	2019
	Notes	$'000	$'000
Assets
Non-current assets
Exploration and evaluation assets	8	346	41
Property, plant and equipment		1	-
Investments	9	100	-
Investments in associates	10	3,551	-
		3,998	41
Current assets
Other receivables	11	508	15
Cash and cash equivalents		267	117
Assets held for sale		-	782
		775	914
Total assets		4,773	955
Liabilities
Current liabilities
Trade payables		24	41
Loans and borrowings		56	62
Accruals and other payables		20	698
Liabilities associated with assets held for sale		-	22
Total liabilities		100	823
Issued capital and reserves attributable to owners of the parent
Share capital	12	126	123
Share premium		4,389	4,202
Translation reserve		(78)	10
Retained earnings		236	(4,203)
Total equity		4,673	132
Total equity & liabilities		4,773	955

 

 

CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE TWELVE MONTHS ENDED 30 JUNE 2020

	Share capital	Share premium	Translation reserve	Retained earnings	Total equity attributable to owners
	$'000	$'000	$'000	$'000	$'000
Balance as at 1 July 2019	123	4,202	10	(4,203)	132
Total comprehensive loss for the year Profit / (Loss) for the year	-	-	-	4,435	4,435
Other comprehensive loss	-	-	(88)	-	(88)
Total comprehensive profit / (loss) for the year	-	-	(88)	4,435	4,347
Transactions with owners in their capacity as owners
Shares issued	3	187	-	-	190
Share options issued	-	-	-	4	4
Total transactions with owners	3	187	-	4	194
Balance at 30 June 2020	126	4,389	(78)	236	4,673
Balance as at 1 July 2018	102	2,844	7	(2,690)	263
Total comprehensive loss for the year Loss for the half-year	-	-	-	(1,682)	(1,682)
Other comprehensive loss	-	-	3	-	3
Total comprehensive loss for the year	-	-	3	(1,682)	(1,682)
Transactions with owners in their capacity as owners
Shares issued	21	1,358	-	-	1,379
Shares options issued	-	-	-	169	169
Total transactions with owner	21	1,358	-	169	1,548
Balance at 30 June 2019	123	4,202	10	(4,203)	132

 

 

 

CONDENSED UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

FOR THE TWELVE MONTHS ENDED 30 JUNE 2020

	Unaudited 30 June	Audited 30 June
	2020	2019
Cash flows from operating activities	$'000	$'000
Profit / (Loss) before Tax from continuing operations	(1,669)	(1,594)
Profit / (Loss) before Tax from discontinued operations	6,104	(88)
	4,435	(1,682)
Add back: depreciation	2	2
Non-cash shares received on disposal of subsidiary	(4,097)	-
Non-cash currency translation differences arising on translation of equity investments	(88)	-
Non-cash share option charge	4	169
Non-cash shares issued in lieu of fees	190	96
Proceeds from disposal of subsidiary classified as investing activities	(2,079)	-
Share of losses in associate	546	-
Decrease/(increase) in other receivables	289	-
(Decrease)/increase in trade and other payables	(717)	535
Net cash outflow from operating activities	(1,515)	(880)
Investing activities
Proceeds from disposal of subsidiary	2,079	-
Development of exploration and evaluation assets	(305)	(477)
Purchase of plant, property and equipment	(1)	-
Purchase of shares in investment	(100)	-
Net cash outflow from investing activities	1,673	(477)
Financing activities
Share capital issue	-	1,496
Cost of issuing share capital	-	(213)
Increase/(Decrease) in related party borrowings	(6)	4
Net cash from financing activities	(6)	1,287
Net movement in cash and cash equivalents	152	(70)
Cash and cash equivalents at beginning of period	117	198
Movements in foreign exchange	(2)	2
Cash and cash equivalents reclassified as assets available for sale (discontinued operation)	-	(13)
Cash and cash equivalents at end of period	267	117

 

 

NOTES TO THE UNAUDITED FINANCIAL INFORMATION

FOR THE TWELVE MONTHS ENDED 30 june 2020

1.      General Information

 

The Company is a public limited company limited by shares, incorporated in England and Wales 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 exploration and development of mining assets in Brazil.

 

2.      Accounting Policies

 

Basis of preparation

During the period, the Company changed its Accounting Reference Date to 31 December. The second interim unaudited financial information for the year ended 30 June 2020 has been prepared in accordance with IAS 34 Interim Financial Reporting. The results for the year ended 30 June 2020 are unaudited.

 

The condensed unaudited consolidated financial information for the year ended 30 June 2020 has been prepared on a basis consistent with, and on the basis of, the accounting policies set out in the financial information in the Company's published results for the year to 30 June 2019. 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 as at 31 December 2020.

 

The Board have conducted a review of forecast earnings and cash over the next twelve months, considering various scenarios and sensitivities given the COVID-19 situation and uncertainty around the future economic environment. The Board have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the interim financial statements.

 

The consolidated financial information is presented in United States Dollars ($), which is also the functional currency of the Company. Amounts are rounded to the nearest thousand ($'000), unless otherwise stated.

 

Changes in accounting principles and adoption of new and revised standards

In the year ended 30 June 2020, the Directors have reviewed all the new and revised Standards. The only relevant new standard that is effective for this year's financial statements is IFRS 16 "Leases", but this does not have a material impact on the financial statements.

 

There are no standards in issue but not yet effective which could have a material impact on the financial statements.

 

Going concern

As disclosed in the 30 June 2019 financial statements, there exists a material uncertainty, which may cast doubt about the Company's ability to continue as a going concern. Given the proceeds from the sale of the Pedra Branca project and based on the Company's planned expenditure on the Pitombeiras vanadium deposit and the Company's working capital requirements, the Directors have a reasonable expectation that the Company will have adequate resources to meet its capital requirements for the foreseeable future. For that reason, the Directors have concluded that the financial statements should be prepared on a going concern basis.

 

The financial statements do not include the adjustment that would result if the Company were unable to continue as a going concern.

 

Financial assets

All of the Company's financial assets are held within a business model whose objective is to collect contractual cash flows which are solely payments of principals and interest and therefore classified as subsequently measured at amortised cost.

 

The Company's financial assets include cash and other receivables. The Company assesses on a forward-looking basis the expected credit losses, defined as the difference between the contractual cash flows and the cash flows that are expected to be received.

 

Financial liabilities

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 Company's Pitombeiras project and formerly the 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.

 

Interests in associates

Associates are those entities in which the Company has significant influence, but not control or joint control, over the financial and operating policies.

 

The results and assets and liabilities of associates are incorporated using the equity method of accounting. Under the equity method, an investment in an associate is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Company's share of profit or loss and other comprehensive income of the associate.

 

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 Company and Company's ability to continue as a going concern. Given the proceeds from the sale of the Pedra Branca project and based on the Company's planned expenditure on the Pitombeiras vanadium deposit and the Company's working capital requirements, the Directors have a reasonable expectation that the Company will have adequate resources to meet its capital requirements for the foreseeable future.

 

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 for the Pitombeiras project (2020: $346,000, 2019: $41,000) at this time.

 

Estimates and assumptions

In arriving at the carrying value of investments in associates, the Company determines the need for impairment based on the level of geological knowledge and confidence of the mineral resources. Such decisions are taken on the basis of the exploration and research work carried out in the period utilising expert report.

 

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 13.

 

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 Company only operates in one segment: mining services. All non-current assets have been generated in Brazil.

 

The Directors believe that the Company's operations are not subject to any significant seasonality.

 

5.   Tax expense

	Twelve months ended		Year ended
	30 June 2020		30 June 2019
	Continuing operations	Discontinued operations	Continuing operations	Discontinued operations
	$'000	$'000	$'000	$'000
Profit / (Loss) on ordinary activities before tax	(1,669)	6,104	(1,594)	(88)
Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2019: 19%)	(317)	1,160	(303)	(17)
Effects of:
Recognition of previously unrecognised tax losses	317	-	-	-
Unrelieved tax losses for the period carried forward	-	(1,160)	303	17
Total tax charge for the period on continuing operations	-	-	-	-

Factors that may affect future tax charges 

Apart from the losses incurred to date, there were no factors that may affect future tax charges. 

 

6.      Earnings per share