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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bluejay Mining Plc | LSE:JAY | London | Ordinary Share | GB00BFD3VF20 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.295 | 0.29 | 0.30 | 0.295 | 0.295 | 0.295 | 641,025 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Metal Mining Services | 0 | 1.67M | 0.0014 | 2.07 | 3.47M |
From Apr 2019 to Apr 2024
TIDMJAY
RNS Number : 9880A
Bluejay Mining PLC
03 June 2019
Bluejay Mining plc / EPIC: JAY / Market: AIM / Sector: Mining
3 June 2019
Bluejay Mining plc ('Bluejay' or the 'Company')
Final Results and Notice of AGM
Bluejay Mining plc, an AIM and FSE listed company with projects in Greenland and Finland, is pleased to announce its final results for the year ended 31 December 2018. The Company also gives notice that its Annual General Meeting ('AGM') will be held on 27 June 2019 at 11:00 a.m. at The Washington Mayfair Hotel, 5 Curzon Street, London, W1J 5HE. Copies of the Notice of AGM, together with the Form of Proxy and Annual Report will be posted to shareholders tomorrow and available to view on the Company's website shortly.
Overview:
-- Excellent progress made across the Dundas Ilmenite Project ('Dundas') including resource increase, further delineation and the submission of social and economic studies
-- Dundas' position as the most significant, highest grade mineral sand ilmenite deposit in the world solidified by c.>400% increase of the resource to 117 million tonnes at 6.1% ilmenite (in-situ)
-- Current JORC Maiden offshore Exploration Target of between 300 million tonnes and 570 million tonnes with an average grade range of 0.4-4.8 ilmenite in situ
-- Ongoing work at Iterlak East and Iterlak West continues to underpin Dundas' scale and quality
-- Delineation of an Exploration Target of 20 to 60 million tonnes of 6 to 10% ilmenite (in-situ) at the Iterlak Delta target, an area of similar size to the Moriusaq zone
-- Agreement with Rio Tinto Iron and Titanium Canada Inc. ('RTIT') to jointly evaluate the Project
o Includes undertaking a bulk sample to be shipped to the Sorel-Tracy plant in Quebec, Canada, RTIT's major ilmenite processing facility
-- Environmental Impact Assessment ('EIA') and Social Impact Assessment ('SIA') completed, both being core modules for the application for an exploitation permit for Dundas
o EIA submitted to The Ministry of Nature and Environment, Government of Greenland in April 2019 and SIA submitted to the Ministry of Industry, Energy & Research, Government of Greenland
o EIA based on development scenario outlined in the optimised Pre-Feasibility Study ('PFS'), which anticipates annual production of 440,000 tonnes of ilmenite concentrate from the Project
o EIA reported no major issues once again drawing attention to the feasibility of simple and low-impact mining and processing
o SIA key findings were highly positive
-- Pre-Feasibility Study for Dundas is currently at a final draft stage
-- Advancing Dundas towards the granting of an exploitation licence to facilitate production - last remaining components are the mineral reserve, mine plan and impact benefit agreement
-- Current cash position of GBP7.2m and clarification that the corporate presentation posted to the Company's website on 12 March 2019 provided a summary overview of the Company based on historical information that had previously been notified using the Regulatory News Service and did not purport to provide any new price sensitive information
Chairman's Statement:
This has been another positive period for Bluejay Mining plc ('Bluejay' or the 'Company' and together with its subsidiaries the 'Group') as we continue to advance the development of our portfolio, in particular our flagship asset, the Dundas Ilmenite Project ('Dundas' or the 'Project') in Greenland, which continues to go from strength to strength. Importantly, we have achieved a number of significant milestones since my last report, all focussed on advancing Dundas towards the granting of an exploitation licence to facilitate production as soon as practicable. The recently announced agreement with Rio Tinto Iron and Titanium Canada Inc. ('Rio Tinto' or 'RTIT') paired with the recently updated onshore and maiden offshore resource at Dundas is a clear indication of the outstanding potential of the Project and work completed to date by the Group.
Signing an agreement with one of the world's largest mining groups is a key achievement in the history of Bluejay as part of our "discover, develop and deliver" strategy in Greenland. We believe that working with RTIT will provide an opportunity for both operational and economic optimisation as we jointly evaluate the Project through a bulk sample to be shipped to the Sorel-Tracy plant in Quebec, Canada, which is RTIT's major ilmenite processing facility.
In the period, following extensive drilling and trenching at the primary Moriusaq area, we published a >400% increase of the resource to 96 million tonnes at 6.9% ilmenite (in-situ), solidifying Dundas' position as the most significant, highest grade mineral sand ilmenite deposit in the world. Additionally, the potential of the economics and life-of-mine of Dundas was further enhanced by the delineation of an Exploration Target of 20 to 60 million tonnes of 6 to 10% ilmenite (in-situ) at the Iterlak Delta target, an area of similar size to the Moriusaq zone. Further work at Dundas, conducted by international mining consultants SRK Exploration Services LTD ('SRK'), has proved transformational as the Project now possesses a Total Mineral Resource of 117Mt at 6.1% ilmenite in situ, in addition to a JORC Maiden offshore Exploration Target of between 300 million tonnes and 570 million tonnes with an average grade range of 0.4-4.8 ilmenite in situ. SRK's ongoing work at Iterlak East and Iterlak West will continue to underpin the Project's scale and quality.
As part of the mining exploitation licence application we completed the Environmental Impact Assessment ('EIA') and Social Impact Assessment ('SIA'). The EIA, submitted to The Ministry of Nature and Environment, Government of Greenland in April 2019, presented three years of extensive environmental surveys and baseline studies agreed between the Group, stakeholders and the relevant Greenlandic authorities, represented by the Ministry of Mineral Resources & Labour, Ministry of Nature and Environment and its advisors, the Greenland Institute of Natural Resources and the Danish Centre for Environment & Energy at Aarhus University.
The EIA was prepared based upon the development scenario outlined in the optimised Pre-Feasibility Study ('PFS'), which anticipates annual production of 440,000 tonnes of ilmenite concentrate from the Project, and was prepared by Orbicon A/S, one of the most experienced environmental service providers with respect to mining and permitting related studies for mining operations in Greenland. The three year term for the EIA was agreed due to the limited existing understanding of the biodiversity in this environment, and allows the authorities to understand the impact of exploitation of the ilmenite-bearing sand within the licence area, as well as the broader region and forms a critical cornerstone in the application for an exploitation permit.
Importantly, the findings highlighted that there were no major issues identified at Dundas, repeatedly drawing attention to the feasibility of simple and low-impact mining and processing.
We have also completed and submitted the SIA to the Ministry of Industry, Energy & Research, Government of Greenland. This represents the completion of another core module in the application for an exploitation permit for Dundas, and we were delighted that the key findings were again highly positive.
The SIA constitutes three years of surveys and baseline studies and was built on the requirements determined in the Terms of Reference for the SIA, approved following public consultation with the various Greenlandic Authorities and stakeholders. It was prepared by international, multidisciplinary engineering consultancy company NIRAS Gruppen A/S ('NIRAS'), one of the most experienced SIA service providers with respect to mining and permitting related studies for operations in Greenland.
The SIA had a number of major positive findings. These included the creation of up to 175 direct employment positions, the increasing of skills within the workforce and an elevation in the level of training among the workforce within the mining sector in Greenland. It also anticipated a positive impact on local and national economy through the provision of goods and services from local companies and through payment of royalties, corporate taxes and income taxes. This is extremely important as Dundas is in an area of Greenland that currently has few job opportunities. We are therefore delighted to be able to contribute to this region and Greenland as a whole.
The PFS for Dundas is currently at a final draft stage and will be published as soon as practicable. The delay in the publication can be attributed to the significantly high level of detail that has been undertaken in producing this study. Looking ahead, this extended and in-depth PFS will result in both significant time and cost efficiencies, as this mitigates some of the test work required by Bluejay when it advances into the definitive feasibility stage. This will occur once the licence application has been lodged.
On a wider Project level, and as mentioned in the 2018 interim financial statements, we have also completed numerous work programmes including key geotechnical and surveying requirements, hydrogeology installations around the licence area, establishment of a year-round weather monitoring station, and geotechnical assessments for infrastructure locations. Infrastructure at the site has also been enhanced, including installation of a 350kVA power generation facility, completion of a 30-man camp to expand residential capacity, and an upgraded mining fleet.
As you can see, Dundas has maintained momentum towards production through our goal of finalising and submitting the relevant exploitation licence to the Government of Greenland. The last remaining components are the mineral reserve, mine plan and impact benefit agreement all of which we are working on.
Bluejay is not a one project company. Although the focus has been on Dundas, the Group is also advancing the 2,586 sq. km Disko-Nuussuaq Magmatic Massive Sulphide ('MMS') nickel-copper-platinum project ('Ni-Cu-PGM') ('Disko'). This has shown its potential to host mineralisation similar to the world's largest nickel/copper sulphide mine Norilsk-Talnakh. Disko is a working sulphide system with initial chemical assays in oxidised surface material returning 2.02% nickel, 0.8% copper and 0.2% cobalt. As a result of the prospectivity, Bluejay increased the licence size in May 2018 to 2,586km2, which is approximately the same size as Luxembourg. We believe the scale and potential of this asset is globally significant, and whilst Dundas has been our primary development focus, work is underway to refine drill targets to better determine Disko's development potential. As we secure development partners for Dundas, we envisage significantly increased activity at Disko whose potential value we don't believe is yet recognised by the market.
Also in Greenland, the Group continues evaluating the prospectivity of the 107sq km Kangerluarsuk Sed-Ex lead-zinc-silver project, where historical work has recovered grades of 41% zinc, 9.3% lead and 596 g/t silver and has identified four large-scale drill ready targets. We are also maintaining our Finnish projects; the Outokumpu copper project, Hammaslahti copper-zinc project and the Enonkoski nickel-copper PGE project. It is expected that the agreement with Rio Tinto will enable the Group to direct more attention on to the development of these additional assets in its portfolio.
On a corporate level, during the period, there were a number of changes to the Board; we welcomed Garth Palmer as a Non-Executive Director, who as Company Secretary already had a deep understanding of the business and Ian Henderson as a Non-Executive Director. We also said goodbye to Non-Executive Director Greg Kuenzel who stepped down to pursue other interests. Additionally, early in the period, we raised GBP17 million via the placing of 77,272,728 new ordinary shares in the Company. The funds raised from existing and new shareholders strengthened our institutional base which now includes Prudential M&G (12.12%) and Sand Grove Capital Management (9.91%).
Financial Review
The loss before taxation of the Group for the year ended 31 December 2018 amounted to GBP10,776,686 (18 months to 31 December 2017: GBP2,680,708).
The Group's cash position at 31 December 2018 was GBP8,843,709 (31 December 2017: GBP2,901,922).
Outlook
Dundas is a confirmed world class project - it is a high-grade, defined and scalable deposit with a low capex simple processing route, in a strategic and supportive jurisdiction. Its potential has been noted internationally, most recently by RTIT. The delivery of a large bulk-sample to RTIT's Sorel-Tracy plant in Quebec is the initial operational focus within the agreement and we are confident that ilmenite sourced from Dundas will be shown to be valuable material for RTIT's operation.
The Project not only has the potential to provide significant value to the Company, its strategic partners and its shareholders, but also to the local region and to Greenland as a whole. This potential has been recognised by the Greenlandic authorities and Government who have consistently demonstrated their support for Bluejay and for this we are sincerely grateful. We realise the importance of this project to Greenland, and as such we are delighted with the close cooperation we are receiving from the relevant local authorities and national ministries, to develop Dundas for the benefit of all stakeholders.
I am grateful for the support of shareholders and the Company will continue to provide updates regarding our operational progress and ongoing negotiations as regularly as possible. I would like to reiterate our thanks to the local community, the Greenlandic authorities and government, our dedicated team of staff, our advisors, our strategic partner and shareholders for their continued patience and support. I look forward to what I believe will be a transformational 2019/2020.
STATEMENTS OF FINANCIAL POSITION
As at 31 December 2018
Hot Features
Premium
Group Company
--------------------------- ----------------------------
31 December 31 December 31 December 31 December
2018 2017 2018 2017
Note GBP GBP GBP GBP
------------------------------- ----- ------------- ------------ ------------- -------------
Non-Current Assets
Property, plant and equipment 6 2,846,091 631,054 44,277 8,333
Intangible assets 7 15,478,246 17,971,795 - -
Investment in subsidiaries 9 - - 20,918,061 19,717,873
18,324,337 18,602,849 20,962,338 19,726,206
------------------------------- ----- ------------- ------------ ------------- -------------
Current Assets
Financial assets at fair
value through profit or loss 8 330,402 - 330,402 -
Trade and other receivables 10 768,960 642,870 840,620 620,891
Cash and cash equivalents 11 8,843,709 2,901,922 8,777,619 2,820,884
------------------------------- ----- ------------- ------------ ------------- -------------
9,943,071 3,544,792 9,948,641 3,441,775
------------------------------- ----- ------------- ------------ ------------- -------------
Total Assets 28,267,408 22,147,641 30,910,979 23,167,981
------------------------------- ----- ------------- ------------ ------------- -------------
Non-Current Liabilities
Deferred Tax Liabilities 13 496,045 496,045 - -
------------------------------- ----- ------------- ------------ ------------- -------------
496,045 496,045 - -
Current Liabilities
Trade and other payables 12 783,836 564,471 469,554 358,306
783,836 564,471 469,554 358,306
------------------------------- ----- ------------- ------------ ------------- -------------
Total Liabilities 1,279,881 1,060,516 469,554 358,306
------------------------------- ----- ------------- ------------ ------------- -------------
Net Assets 26,987,527 21,087,125 30,441,425 22,809,675
------------------------------- ----- ------------- ------------ ------------- -------------
Equity attributable to owners
of the Parent
Share capital 15 7,800,237 7,792,372 7,800,237 7,792,372
Share premium 15 43,739,139 27,220,576 43,739,139 27,220,576
Other reserves 17 (6,799,892) (6,949,904) 311,397 312,045
Retained losses (17,751,957) (6,975,919) (21,409,348) (12,515,318)
------------------------------- ----- ------------- ------------ ------------- -------------
Total Equity 26,987,527 21,087,125 30,441,425 22,809,675
------------------------------- ----- ------------- ------------ ------------- -------------
The Company has elected to take the exemption under Section 408 of the Companies Act 2006 from presenting the Parent Company Income Statement and Statement of Comprehensive Income. The loss for the Company for the year ended 31 December 2018 was GBP8,894,678 (period ended 31 December 2017: GBP1,999,470).
CONSOLIDATED INCOME STATEMENT
For the year ended 28 February 2013
18 month
Year ended period ended
31 December 31 December
2018 2017
Continued operations Note GBP GBP
--------------------------------------------------- ----- ------------- --------------
Revenue - -
Cost of sales - -
--------------------------------------------------- ----- ------------- --------------
Gross profit - -
Administrative expenses 24 (1,800,851) (2,111,312)
Other gains/(losses) 21 (93,111) -
Foreign exchange (23,757) 70,953
Operating Loss (1,917,719) (2,040,359)
Impairments 7 (8,873,585) (643,168)
Finance income 20 12,209 1,717
Other income 2,409 1,102
Loss before Income Tax (10,776,686) (2,680,708)
Income tax expense 22 - -
--------------------------------------------------- ----- ------------- --------------
Loss for the Period attributable to owners of the Parent (10,776,686) (2,680,708) --------------------------------------------------- ----- ------------- -------------- Basic and Diluted Earnings Per Share attributable to owners of the parent during the period (expressed in pence per share) 23 (1.279)p (0.408)p --------------------------------------------------- ----- ------------- --------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2018
18 month
period
Year ended ended 31
31 December December
2018 2017
GBP GBP
--------------------------------------------------- ------------- ------------
Loss for the year/period (10,776,686) (2,680,708)
Other Comprehensive Income:
Items that may be subsequently reclassified to
profit or loss
Currency translation differences 150,660 694,161
---------------------------------------------------- ------------- ------------
Other comprehensive income for the year/period,
net of tax (10,626,026) (1,986,547)
---------------------------------------------------- ------------- ------------
Total Comprehensive Income attributable to owners
of the Parent (10,626,026) (1,986,547)
---------------------------------------------------- ------------- ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2018
Share Share Other Retained Non-controlling Total
capital premium reserves losses Total interest equity
Note GBP GBP GBP GBP GBP GBP GBP
---------- ---------------- -------------
Balance as at 1
July 2016 7,763,676 16,183,675 (7,600,301) (4,458,414) 11,888,636 590,561 12,479,197
----------------- ----- ---------- ----------- ------------ ------------- ------------- ---------------- -------------
Loss for the
period - - - (2,680,708) (2,680,708) - (2,680,708)
----------------- ----- ---------- ----------- ------------ ------------- ------------- ---------------- -------------
Other
comprehensive
income for the
period
Items that may
be subsequently
reclassified to
profit or loss
----------------- ----- ---------- ----------- ------------ ------------- ------------- ---------------- -------------
Currency
translation
differences - - 694,161 - 694,161 - 694,161
----------------- ----- ---------- ----------- ------------ ------------- ------------- ---------------- -------------
Total
comprehensive
income for the
period - - 694,161 (2,680,708) (1,986,547) - (1,986,547)
----------------- ----- ---------- ----------- ------------ ------------- ------------- ---------------- -------------
Proceeds from
share
issues 15 28,596 11,645,757 - - 11,674,353 - 11,674,353
Issue costs 15 - (678,756) - - (678,756) - (678,756)
Share based
payments 16 100 69,900 - - 70,000 - 70,000
Issued options 16 - - 119,439 - 119,439 - 119,439
Exercised
options 16 - - (163,203) 163,203 - - -
Acquisition of
non-controlling
interest on
business
combination - - - - - (590,561) (590,561)
Total
transactions
with owners,
recognised
directly in
equity 28,696 11,036,901 (43,764) 163,203 11,185,036 (590,561) 10,594,475
Balance as at 31
December 2017 7,792,372 27,220,576 (6,949,904) (6,975,919) 21,087,125 - 21,087,125
----------------- ----- ---------- ----------- ------------ ------------- ------------- ---------------- -------------
Balance as at 1
January 2018 7,792,372 27,220,576 (6,949,904) (6,975,919) 21,087,125 - 21,087,125
----------------- ----- ---------- ----------- ------------ ------------- ------------- ---------------- -------------
Loss for the
year - - - (10,776,686) (10,776,686) - (10,776,686)
----------------- ----- ---------- ----------- ------------ ------------- ------------- ---------------- -------------
Other
comprehensive
income for the
year
Items that may
be subsequently
reclassified to
profit or loss
Currency
translation
differences - - 150,660 - 150,660 - 150,660
Total
comprehensive
income for the
year - - 150,660 (10,776,686) (10,626,026) - (10,626,026)
Proceeds from
share
issues 15 7,828 17,092,171 - - 17,099,999 - 17,099,999
Issue costs 15 - (641,071) - - (641,071) - (641,071)
Share based
payments 16 37 67,463 - - 67,500 - 67,500
Exercised
options 16 - - (648) 648 - - -
Total
transactions
with owners,
recognised
directly in
equity 7,865 16,518,563 (648) 648 16,526,428 - 16,526,428
----------------- ----- ---------- ----------- ------------ ------------- ------------- ---------------- -------------
Balance as at 31
December 2018 7,800,237 43,739,139 (6,799,892) (17,751,957) 26,987,527 - 26,987,527
----------------- ----- ---------- ----------- ------------ ------------- ------------- ---------------- -------------
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2018
Share Share Retained
capital premium Other reserves losses Total equity
Note GBP GBP GBP GBP GBP
Balance as at 1 July
2016 7,763,676 16,183,675 355,809 (10,679,051) 13,624,109
--------------------------- ----- ---------- ----------- --------------- ------------- -------------
Loss for the period - - - (1,999,470) (1,999,470)
--------------------------- ----- ---------- ----------- --------------- ------------- -------------
Total comprehensive
income for the period - - - (1,999,470) (1,999,470)
--------------------------- ----- ---------- ----------- --------------- ------------- -------------
Proceeds from share
issues 15 28,596 11,645,757 - - 11,674,353
Issue costs 15 - (678,756) - - (678,756)
Share based payments 16 100 69,900 - - 70,000
Issued options 16 - - 119,439 - 119,439
Exercised options 16 - - (163,203) 163,203 -
Total transactions
with owners, recognised
directly in equity 28,696 11,036,901 (43,764) 163,203 11,185,036
Balance as at 31 December
2017 7,792,372 27,220,576 312,045 (12,515,318) 22,809,675
--------------------------- ----- ---------- ----------- --------------- ------------- -------------
Balance as at 1 January
2018 7,792,372 27,220,576 312,045 (12,515,318) 22,809,675
--------------------------- ----- ---------- ----------- --------------- ------------- -------------
Loss for the year - - - (8,894,678) (8,894,678)
--------------------------- ----- ---------- ----------- --------------- ------------- -------------
Total comprehensive
income for the year - - - (8,894,678) (8,894,678)
--------------------------- ----- ---------- ----------- --------------- ------------- ------------- Proceeds from share issues 15 7,828 17,092,171 - - 17,099,999 Issue costs 15 - (641,071) - - (641,071) Share based payments 16 37 67,463 - - 67,500 Exercised options 16 - - (648) 648 - Total transactions with owners, recognised directly in equity 7,865 16,518,563 (648) 648 16,526,428 --------------------------- ----- ---------- ----------- --------------- ------------- ------------- Balance as at 31 December 2018 7,800,237 43,739,139 311,397 (21,409,348) 30,441,425 --------------------------- ----- ---------- ----------- --------------- ------------- -------------
STATEMENTS OF CASH FLOWS
For the year ended 31 December 2018
Group Company
---------------------------- ---------------------------
18 month 18 month
period period
Year ended ended Year ended ended 31
31 December 31 December 31 December December
2018 2017 2018 2017
Note GBP GBP GBP GBP
-------------------------------------- ----- ------------- ------------- ------------- ------------
Cash flows from operating activities
Loss before income tax (10,776,686) (2,680,708) (8,894,678) (1,999,470)
Adjustments for:
Loss on financial assets at
FVTPL 8 96,573 - 96,573 -
Depreciation 6 250,590 46,868 12,745 9,504
Share options expense 15 - 119,439 - 119,439
Share based payments 15 45,000 70,000 45,000 70,000
Intercompany management fees - - (620,482) (280,628)
Impairment on Assets 7 8,873,585 643,168 8,010,452 646,319
Foreign exchange (32,914) (70,953) (208,838) (15,915)
Changes in working capital:
(Increase)/Decrease in trade
and other receivables 10 (126,090) (145,345) 321,918 (82,277)
Increase/(Decrease) in trade
and other payables 12 241,867 127,963 (42,224) 4,142
Net cash used in operating
activities (1,428,075) (1,889,568) (1,279,534) (1,528,886)
-------------------------------------- ----- ------------- ------------- ------------- ------------
Cash flows from investing activities
Purchase of property plant
and equipment 6 (2,452,284) (653,568) (32,883) (5,909)
Purchase of software 6 (15,806) (7,352) (15,806) (7,352)
Loans granted to subsidiary
undertakings - - (8,746,995) (5,631,501)
Loans granted to third parties - (54,000) - (54,000)
Purchase of quoted shares measured
at fair value through the profit
or loss 8 (426,975) - (426,975) -
Purchase of intangible assets 7 (6,251,969) (4,600,044) - -
-------------------------------------- ----- ------------- ------------- ------------- ------------
Net cash used in investing
activities (9,147,034) (5,314,964) (9,222,659) (5,698,762)
-------------------------------------- ----- ------------- ------------- ------------- ------------
Cash flows from financing activities
Proceeds from issue of share
capital 15 17,099,999 10,355,803 17,099,999 10,355,803
Transaction costs of share
issue 15 (641,071) (678,756) (641,071) (678,756)
Net cash generated from financing
activities 16,458,928 9,677,047 16,458,928 9,677,047
-------------------------------------- ----- ------------- ------------- ------------- ------------
Net decrease/(increase) in
cash and cash equivalents 5,883,819 2,472,515 5,956,735 2,449,399
Cash and cash equivalents at
beginning of year/period 2,901,922 425,046 2,820,884 371,485
Exchange gain on cash and cash
equivalents 57,968 4,361 - -
-------------------------------------- ----- ------------- ------------- ------------- ------------
Cash and cash equivalents at
end of year/period 11 8,843,709 2,901,922 8,777,619 2,820,884
-------------------------------------- ----- ------------- ------------- ------------- ------------
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2018
1. General information
The principal activity of Bluejay Mining plc (the 'Company') and its subsidiaries (together the 'Group') is the exploration and development of precious and base metals. The Company's shares are listed on the AIM of the London Stock Exchange and the open market of the Frankfurt Stock Exchange. The Company is incorporated and domiciled in England.
The address of its registered office is 7-9 Swallow Street, London, W1B 4DE.
2. Summary of significant Accounting Policies
The principal Accounting Policies applied in the preparation of these Consolidated Financial Statements are set out below. These Policies have been consistently applied to all the periods presented, unless otherwise stated.
2.1. Basis of preparation of Financial Statements
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') and IFRS Interpretations Committee ('IFRS IC') as adopted by the European Union, the Companies Act 2006 that applies to companies reporting under IFRS and IFRS IC interpretations. The Consolidated Financial Statements have also been prepared under the historical cost convention, except as modified for assets and liabilities recognised at fair value on business combination.
The Financial Statements are presented in Pound Sterling rounded to the nearest pound.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Consolidated Financial Statements are disclosed in Note 4.
2.2. New and amended standards
(a) New and amended standards mandatory for the first time for the financial periods beginning on or after 1 January 2018
As of 1 January 2018, the Company adopted IFRS 9, Financial Instruments ('IFRS 9'), which replaced IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 addresses the classification, measurement and recognition of financial assets and liabilities.
The Company reviewed the financial assets and liabilities reported on its Statement of Financial Position and completed an assessment between IAS 39 and IFRS 9 to identify any accounting changes. The financial assets subject to this review were trade and other receivables and financial assets held at fair value through profit or loss. The financial liabilities subject to this review were the trade and other payables. Based on this assessment of the classification and measurement model, there were no changes to classification and measurement other than changes in terminology.
Of the other IFRSs and IFRICs, none have had a material effect on future Company Financial Information
(b) New standards, amendments and Interpretations in issue but not yet effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:
Standard Impact on initial application Effective date
-------------------- ---------------------------------- ---------------
IFRS 16 Leases 1 January 2019
---------------------------------- ---------------
IFRS 9 (Amendments) Prepayment features with negative 1 January 2019
compensation
---------------------------------- ---------------
IAS 28 (Amendments) Long term interests in associates 1 January 2019
and joint ventures
---------------------------------- ---------------
2015-2017 Cycle Annual improvements to IFRS 1 January 2019
Standards
---------------------------------- ---------------
IFRS 3 (Amendments) Business combinations *1 January
2020
---------------------------------- ---------------
(*subject to EU endorsement)
Of the other IFRSs and IFRICs, none are expected to have a material effect on future Company financial statements.
2.3. Basis of Consolidation
The Consolidated Financial Statements consolidate the financial statements of the Company and its subsidiaries made up to 31 December. Subsidiaries are entities over which the Group has control. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
-- The contractual arrangement with the other vote holders of the investee; -- Rights arising from other contractual arrangements; and -- The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
Investments in subsidiaries are accounted for at cost less impairment within the parent company financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group. All significant intercompany transactions and balances between Group enterprises are eliminated on consolidation.
2.4. Going concern
The Group's business activities together with the factors likely to affect its future development, performance and position are set out in the Chairman's Report on pages 3-5. In addition, Note 3 to the Consolidated Financial Statements includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposure to market, credit and liquidity risk.
The Consolidated Financial Statements have been prepared on a going concern basis. Although the Group's assets are not generating revenues and an operating loss has been reported, the Directors are of the view that the Group has sufficient funds to undertake its operating activities over the next 12 months from the date these financial statements are approved including any additional payments required in relation to its current exploration projects. The Group has financial resources which the Directors consider will be sufficient to fund the Group's committed expenditure both operationally and on various exploration projects for this time period. However, in order to complete other exploration work over the life of existing projects and as additional projects are identified, additional funding will be required. The amount of funding cannot be forecast with any certainty at the point of approval of these Financial Statements and the Group will be required to raise additional funds either via an issue of equity or through the issuance of debt. The Directors are reasonably confident that funds will be forthcoming if and when they are required. Should additional funding not be forthcoming the Directors have agreed, if circumstances require, to defer payment of their fees until such time as adequate funding is received and if necessary scale back exploration activity.
The Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the Group and Company Financial Statements.
2.5. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.
Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
2.6. Foreign currencies
(a) Functional and presentation currency
Items included in the Financial Statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The functional currency of the UK parent entity and UK subsidiary is Pound Sterling, the functional currency of the Finnish and Austrian subsidiaries is Euros and the functional currency of the Greenlandic subsidiaries is Danish Krone. The Financial Statements are presented in Pounds Sterling which is the Company's functional and Group's presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
(c) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
-- assets and liabilities for each period end date presented are translated at the period-end closing rate;
-- income and expenses for each Income Statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
-- all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future, are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the Income Statement as part of the gain or loss on sale.
2.7. Intangible assets
Exploration and evaluation assets
The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production.
Exploration and evaluation assets are recorded and held at cost
Exploration and evaluation assets are not subject to amortisation, as such at the year-end all intangibles held have an indefinite life, but are assessed annually for impairment. The assessment is carried out by allocating exploration and evaluation assets to cash generating units ('CGU's'), which are based on specific projects or geographical areas. The CGU's are then assessed for impairment using a variety of methods including those specified in IFRS 6.
Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Income Statement.
Exploration and evaluation assets recorded at fair-value on business combination
Exploration assets which are acquired as part of a business combination are recognised at fair value in accordance with IFRS 3. When a business combination results in the acquisition of an entity whose only significant assets are its exploration asset and/or rights to explore, the Directors consider that the fair value of the exploration assets is equal to the consideration. Any excess of the consideration over the capitalised exploration asset is attributed to the fair value of the exploration asset.
2.8. Investments in subsidiaries
Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision.
2.9. Property, plant and equipment
Property, Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight line basis at the following annual rates:
Office Equipment - 5 years
Machinery and Equipment - 5 to 15 years
Software - 2 years
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. If an impairment review is conducted following an indicator of impairment, assets which are not able to be assessed for impairment individually are assessed in combination with other assets within a cash generating unit.
Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised within 'Other (losses)/gains' in the Income Statement.
2.10. Impairment of non-financial assets
Assets that have an indefinite useful life, for example, intangible assets not ready to use, and goodwill, are not subject to amortisation and are tested annually for impairment. Property, plant and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
2.11. Financial assets (a) Classification
The Group classifies its financial assets at amortised cost and at fair value through the profit or loss. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
(b) Recognition and measurement
Amortised cost
Regular purchases and sales of financial assets are recognised on the trade date at cost - the date on which the Group commits to purchasing or selling the asset. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of ownership.
Fair value through the profit or loss
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL.The Group holds equity instruments that are classified as FVTPL as these were acquired principally for the purpose of selling in the near term.
Financial assets at FTVPL, are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss. Fair value is determined by using market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are (the 'fair value hierarchy'):
- Level 1: Quoted prices in active markets for identical items (unadjusted)
- Level 2: Observable direct or indirect inputs other than Level 1 inputs
- Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur.
The Group measures its investments in quoted shares using the quoted market price.
(c) Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original EIR. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Group applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset's lifetime ECL at each reporting date.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity.
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
(d) Derecognition
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. This is the same treatment for a financial asset measured at FVTPL.
2.12. Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group's financial liabilities include trade and other payables and loans.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss and other comprehensive income.
Trade and other payables
After initial recognition, trade and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are derecognised, as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss and other comprehensive income.
Derecognition
A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss and other comprehensive income.
Liabilities within the scope of IFRS 9 are classified as financial liabilities at fair value through profit and loss or other liabilities, as appropriate.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
Financial liabilities included in trade and other payables are recognised initially at fair value and subsequently at amortised cost.
2.13. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand.
2.14. Equity
Equity comprises the following:
-- "Share capital" represents the nominal value of the Ordinary shares;
-- "Share Premium" represents consideration less nominal value of issued shares and costs directly attributable to the issue of new shares;
-- "Other reserves" represents the merger reserve, foreign currency translation reserve, redemption reserve and share option reserve where;
o "Merger reserve" represents the difference between the fair value of an acquisition and the nominal value of the shares allotted in a share exchange;
o "Foreign currency translation reserve" represents the translation differences arising from translating the financial statement items from functional currency to presentational currency;
o "Reverse acquisition reserve" represents a non-distributable reserve arising on the acquisition of Finland Investments Limited;
o "Redemption reserve" represents a non-distributable reserve made up of share capital;
o "Share option reserve" represents share options awarded by the group;
-- "Retained earnings" represents retained losses. 2.15. Share capital, share premium and deferred shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity, as a deduction, net of tax, from the proceeds provided there is sufficient premium available. Should sufficient premium not be available placing costs are recognised in the Income Statement.
Deferred shares are classified as equity. Deferred shares have no rights to receive dividends, or to attend or vote at general meetings of the Company and are only entitled to a return of capital after payment to holders of new ordinary shares of GBP100,000 per each share held.
2.16. Share based payments
The Group operates a number of equity-settled, share-based schemes, under which the Group receives services from employees or third party suppliers as consideration for equity instruments (options and warrants) of the Group. The fair value of the third party suppliers' services received in exchange for the grant of the options is recognised as an expense in the Income Statement or charged to equity depending on the nature of the service provided. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted:
-- including any market performance conditions;
-- excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and
-- including the impact of any non-vesting conditions (for example, the requirement for employees to save).
The fair value of the share options and warrants are determined using the Black Scholes valuation model.
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Income Statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.
When the options are exercised, the Group issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised.
2.17. Taxation
No current tax is yet payable in view of the losses to date.
Deferred tax is recognised for using the liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets (including those arising from investments in subsidiaries), are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be used.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Deferred tax is calculated at the tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply to the period when the deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets and liabilities are not discounted.
3. Financial risk management
3.1. Financial risk factors
The Group's activities expose it to a variety of financial risks: market risk (foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. None of these risks are hedged.
Risk management is carried out by the London based management team under policies approved by the Board of Directors.
Market risk
(a) Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro, Danish Krone and the British Pound. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.
The Group negotiates all material contracts for activities in relation to its subsidiaries in either British Pounds, Euros or Danish Krone. The Group does not hedge against the risks of fluctuations in exchange rates. The volume of transactions is not deemed sufficient to enter into forward contracts as most of the foreign exchange movements result from the retranslation of inter company loans. The Group has not sensitised the figures for fluctuations in foreign exchange rates as the Directors are of the opinion that these fluctuations, apart from the retranslation of intercompany loans at the closing rate, would not have a significant impact on the financial statements of the Group. However, the Directors acknowledge that, at the present time, the foreign exchange retranslations have resulted in rather higher than normal fluctuations which are separately disclosed, and is predominantly due to the exceptional nature of the Euro exchange rate in the last two years in the current economic climate. The Directors will continue to assess the effect of movements in exchange rates on the Group's financial operations and initiate suitable risk management measures where necessary.
(b) Price risk
The Group is not exposed to commodity price risk as a result of its operations, which are still in the exploration phase. The Directors will revisit the appropriateness of this policy should the Group's operations change in size or nature.
The Group has exposure to equity securities price risk, as it holds listed equity investments.
Credit risk
Credit risk arises from cash and cash equivalents as well as outstanding receivables. Management does not expect any losses from non-performance of these receivables. The amount of exposure to any individual counter party is subject to a limit, which is assessed by the Board.
The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.
Liquidity risk
In keeping with similar sized mineral exploration groups, the Group's continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital or debt. The Directors are reasonably confident that adequate funding will be forthcoming with which to finance operations. Controls over expenditure are carefully managed.
With exception to deferred taxation, financial liabilities are all due within one year.
3.2. Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, to enable the Group to continue its exploration and evaluation activities, and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the issue of shares or sell assets to reduce debts.
At 31 December 2018 the Group had borrowings of GBPnil (31 December 2017: GBPnil) and defines capital based on the total equity of the Company. The Group monitors its level of cash resources available against future planned exploration and evaluation activities and may issue new shares in order to raise further funds from time to time.
Given the Group's level of debt versus its cash at bank and cash equivalents, the gearing ratio is immaterial.
3.3. Sensitivity analysis
On the assumption that all other variables were held constant, and in respect of the Group and the Company's expenses the potential impact of a 10% increase/decrease in the UK Sterling:Euro and UK Sterling:DKK Foreign exchange rates on the Group's loss for the period and on equity is as follows:
Loss before tax for the year Equity before tax for
Potential impact on ended the period ended
euro expenses: 2018 31 December 2018 31 December 2017
Group Company Group Company
Increase/(decrease)
in foreign exchange
rate GBP GBP GBP GBP
--------------------- ---------------- --------------- --------------- -------------
10% (11,659,970) (8,894,679) 28,323,990 30,441,425
-10% (9,893,402) (8,894,679) 25,651,064 30,441,425
Loss before tax for the year Equity before tax for
Potential impact on ended the period ended
DKK expenses: 2018 31 December 2018 31 December 2017
Group Company Group Company
Increase/(decrease)
in foreign exchange
rate GBP GBP GBP GBP
--------------------- ------------------ ------------- ------------- ---------------
10% (10,840,250) (8,894,679) 27,018,281 30,441,425
-10% (10,713,122) (8,894,679) 26,956,773 30,441,425
4. Critical accounting estimates and judgements
The preparation of the Financial Statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the period. Actual results may vary from the estimates used to produce these Financial Statements.
Estimates and judgements are regularly evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Items subject to such 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 years, include but are not limited to:
Impairment of intangible assets - exploration and evaluation costs
Exploration and evaluation costs have a carrying value at 31 December 2018 of GBP15,478,246 (2017: GBP17,971,795). Such assets have an indefinite useful life as the Group has a right to renew exploration licences and the asset is only amortised once extraction of the resource commences. Management tests for impairment annually whether exploration projects have future economic value in accordance with the accounting policy stated in Note 2.7. Each exploration project is subject to an annual review by either a consultant or senior company geologist to determine if the exploration results returned during the period warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long term metal prices, anticipated resource volumes and supply and demand outlook. In the event that a project does not represent an economic exploration target and results indicate there is no additional upside a decision will be made to discontinue exploration; an impairment charge will then be recognised in the Income Statement.
The Directors have reviewed the estimated value of each project prepared by management and have concluded that the project in Finland be impaired to it's recoverable amount of GBP3,983,108. The recoverable amount is the Director's assessment of the value of the work performed on the active projects since 2014. Therefore the recoverable amount and the corresponding impairment charge is considered to be a critical accounting estimate.
There was no impairment recognised in respect of the Dundas project in Greenland.
Recoverability of the loan due from FinnAust Mining Finland Oy
The Directors have assessed that there is an impairment to the carrying value of the Intangible assets in respect of the projects in Finland and accordingly have also impaired the carrying value of the investment and receivable from Finland Investments Limited in the Company financial statements. The Directors have not impaired a receivable due from FinnAust Mining Finland Oy with a carrying value of GBP6,398,621. The recoverability of this receivable is dependent on the success of the underlying project in Finland, which the Directors have assessed to have a recoverable amount of GBP3,983,108. Therefore, the carrying value of the receivable from FinnAust Mining Finland Oy exceeds the recoverable amount of the projects in Finland by GBP2,415,513. The Directors consider that the receivable due from FinnAust Mining Finland Oy will be recovered in full by enterting into a joint arrangement with a preferred partner, however the Group has not finalised such an arrangements and therefore the recoverability of the receivable in the Company financial statements is considered to be a critical accounting estimate.
VAT receivable
At 31 December 2018, the Group and Company have recognised an amount of GBP463,704 (2017: GBP287,731) within trade and other receivables which relates to VAT receivable. The amount is subject to an on-going enquiry with HMRC, further details of which can be found in Note 26. The Directors believe that the amount will be recovered in full and therefore have not recognised any impairment to the carrying value of this amount.
Useful economic lives of property, plant and equipment
The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values of the assets, taking into account that the assets are not used throughout the whole year due to the seasonality of the licence locations. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on economic utilisation and the physical condition of the assets. See note 6 for the carrying amount of the property plant and equipment and note 2.9 for the useful economic lives for each class of assets.
Share based payment transactions
The Group has made awards of options and warrants over its unissued share capital to certain Directors as part of their remuneration package. Certain warrants have also been issued to shareholders as part of their subscription for shares and suppliers for various services received. No share options or warrants were issued in the current year.
The valuation of these options and warrants involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions have been described in more detail in Note 16.
5. Segment information
Management has determined the operating segments based on reports reviewed by the Board of Directors that are used to make strategic decisions. During the period the Group had interests in four geographical segments; the United Kingdom, Greenland, Austria, and Finland. Activities in the UK are mainly administrative in nature whilst the activities in Austria and Finland relate to exploration and evaluation work.
The Group had no turnover during the period.
Greenland Finland UK Total
2018 GBP GBP GBP GBP
-------------------------------- ----------- ---------- ------------ ------------
Revenue - - - -
Administrative expenses (499,927) (92,937) (1,207,987) (1,800,851)
Foreign Exchange (155,111) (63,818) 195,172 (23,757)
Finance Income - - 12,209 12,209
Other Income - 2,409 - 2,409
--------------------------------- ----------- ---------- ------------ ------------
Impairment on intangible
asset - 8,873,586 - (8,873,586)
Loss before tax per reportable
segment 478,708 8,707,376 1,590,602 10,776,686
Additions to PP&E 2,395,852 23,548 48,690 2,468,090
Additions to intangible
asset 5,148,986 1,102,983 - 6,251,969
Reportable segment assets 11,960,517 4,081,746 12,225,145 28,267,408
--------------------------------- ----------- ---------- ------------ ------------
Greenland Finland UK Total
2017 GBP GBP GBP GBP
-------------------------------- ---------- ----------- ------------ ------------
Revenue - - - -
Administrative expenses 27,846 (97,633) (2,041,525) (2,111,312)
Foreign Exchange 1,791 (8) 69,170 70,953
Finance Income - 15 1,702 1,717
Other Income 1,102 - - 1,102
Impairment on intangible
asset - - (643,168) (643,168)
Loss before tax per reportable
segment 30,739 (97,626) (2,613,821) (2,680,708)
Additions to PP&E 647,660 - 13,260 660,920
Additions to intangible
asset 3,986,730 2,000,553 - 5,987,283
Reportable segment assets 6,982,095 11,867,293 3,298,253 22,147,641
--------------------------------- ---------- ----------- ------------ ------------
6. Property, plant and equipment
Group
Machinery Office
Software & equipment equipment Total
GBP GBP GBP GBP
---------------------------------- --------- ------------- ----------- ----------
Cost
As at 1 July 2016 5,312 21,750 5,431 32,493
Exchange Differences - 1,602 - 1,602
Additions 7,352 647,659 5,909 660,920
---------------------------------- --------- ------------- ----------- ----------
As at 31 December 2017 12,664 671,011 11,340 695,015
---------------------------------- --------- ------------- ----------- ----------
As at 1 January 2018 12,664 671,011 11,340 695,015
Exchange Differences - 6,204 - 6,204
Additions 15,806 2,414,335 37,949 2,468,090
---------------------------------- --------- ------------- ----------- ----------
As at 31 December 2018 28,470 3,091,550 49,289 3,169,309
---------------------------------- --------- ------------- ----------- ----------
Depreciation
As at 1 July 2016 734 10,438 4,438 15,610
Charge for the period 7,379 36,371 3,118 46,868
Exchange differences - 1,483 - 1,483
---------------------------------- --------- ------------- ----------- ----------
As at 31 December 2017 8,113 48,292 7,556 63,961
---------------------------------- --------- ------------- ----------- ----------
As at 1 January 2018 8,113 48,292 7,556 63,961
Charge for the year 6,363 235,935 8,292 250,590
Exchange differences - 8,667 - 8,667
---------------------------------- --------- ------------- ----------- ----------
As at 31 December 2018 14,476 292,894 15,848 323,218
---------------------------------- --------- ------------- ----------- ----------
Net book value as at 31 December
2017 4,551 622,719 3,784 631,054
---------------------------------- --------- ------------- ----------- ----------
Net book value as at 31 December
2018 13,994 2,798,656 33,441 2,846,091
---------------------------------- --------- ------------- ----------- ----------
Depreciation expense of GBP250,590 (31 December 2017: GBP46,868) for the Group has been charged in administration expenses.
Company
Office
Software equipment Total
GBP GBP GBP
---------------------------------- --------- ----------- -------
Cost
As at 1 July 2016 5,312 3,124 8,436
Additions 7,352 5,909 13,261
------------------------------------ --------- ----------- -------
As at 31 December 2017 12,664 9,033 21,697
------------------------------------ --------- ----------- -------
As at 1 January 2018 12,664 9,033 21,697
Additions 15,806 32,883 48,689
------------------------------------ --------- ----------- -------
As at 31 December 2018 28,470 41,916 70,386
------------------------------------ --------- ----------- -------
Depreciation
As at 1 July 2016 734 3,124 3,858
Charge for the period 7,379 2,127 9,506
------------------------------------ --------- ----------- -------
As at 31 December 2017 8,113 5,251 13,364
------------------------------------ --------- ----------- -------
As at 1 January 2018 8,113 5,251 13,364
Charge for the year 6,363 6,382 12,745
------------------------------------ --------- ----------- -------
As at 31 December 2018 14,476 11,633 26,109
------------------------------------ --------- ----------- -------
Net book value as at 31 December
2017 4,551 3,782 8,333
------------------------------------ --------- ----------- -------
Net book value as at 31 December
2018 13,994 30,283 44,277
------------------------------------ --------- ----------- -------
Depreciation expense of GBP12,745 (31 December 2017: GBP9,505) for the Company has been charged in administration expenses.
7. Intangible assets
Intangible assets comprise exploration and evaluation costs. Exploration and evaluation assets are all internally generated. These are measured at cost and have an indefinite asset life. Once the pre-production phase has been entered into, the exploration and evaluation assets will cease to be capitalised and commence amortisation.
Group
--------------------------
31 December 31 December
Exploration & Evaluation Assets - Cost 2018 2017
and Net Book Value GBP GBP
---------------------------------------- ------------ ------------
As at 1 January 17,971,795 12,627,680
Additions 6,251,969 4,600,044
Acquired through acquisition (at fair
value) - 622,702
Exchange differences 128,067 764,537
Impairments (8,873,585) (643,168)
As at year end 15,478,246 17,971,795
---------------------------------------- ------------ ------------
The Dundas project in Greenland has a current JORC compliant mineral resource of 117 million tonnes at 6.1% ilmenite (in-situ) and has been confirmed as the highest-grade mineral sand ilmenite project globally. Exploration projects in Finland and the Disko project in Greenland are at an early stage of development and there are no JORC (Joint Ore Reserves Committee) or non-JORC compliant resource estimates available to enable value in use calculations to be prepared. The Directors therefore undertook an assessment of the following areas and circumstances that could indicate the existence of impairment:
-- The Group's right to explore in an area has expired, or will expire in the near future without renewal;
-- No further exploration or evaluation is planned or budgeted for;
-- A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a commercial level of reserves; or
-- Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.
Following their assessment, the Directors concluded that an impairment charge of GBP8,873,585 was prudent in relation to the Finnish exploration assets for the year ended 31 December 2018. The impairment charge was recognised as the amount being the difference between the fair value of the intangibles and the carrying amount. Management based the recoverable amount using a mix of level 2 and level 3 inputs as per the fair value hierarchy table. Similar observable direct or indirect inputs where viewed and factored into the fair value assessment, as well as non-derived market data that were based on management's expertise and knowledge of the industry.
8. Financial assets measured at fair value
Group Company
------------------------------ --------------------------
31 December 31 December 31 December 31 December
2018 2017 2018 2017
GBP GBP GBP GBP
------------------------------ ---------------- ------------ ------------ ------------
As at 1 January - - - -
Acquisition of quoted shares 426,975 - 426,975 -
Fair value loss (96,573) - (96,573) -
------------------------------ ---------------- ------------ ------------ ------------ As at year end 330,402 - 330,402 - ------------------------------ ---------------- ------------ ------------ ------------
These investments are held for short-term trading purposes. At the reporting date, the shares were revalued and a loss of GBP96,573 was recognised in the profit or loss.
The assets are measured in accordance with Level 1 of the fair value hierarchy by using the quoted market price. There have been no transfers between fair value levels during the year.
9. Investments in subsidiary undertakings
Company
--------------------------
31 December 31 December
2018 2017
GBP GBP
------------------------------ ------------ ------------
Shares in Group Undertakings
At beginning of period 9,700,002 8,605,609
Additions - 1,094,393
Impairment charge (7,700,000) -
------------------------------ ------------ ------------
At end of period 2,000,002 9,700,002
------------------------------ ------------ ------------
Loans to Group undertakings 18,918,059 10,017,871
------------------------------ ------------ ------------
Total 20,918,061 19,717,873
------------------------------ ------------ ------------
Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision.
Following the Directors intangible asset impairment assessment the Directors concluded that the impairment of the investment in and loan to Finland Investments Limited with a carrying value of GBP8,010,452 be impaired in full. The Directors continue to recognise the loan due from FinnAust Mining Finland Oy with a carrying value of GBP6,398,621 as they believe that the amount will be fully recovered through the Group's involvement in the future activities of the exploration projects in Finland.
Subsidiaries
Proportion Proportion
of ordinary of ordinary
Country shares shares held
of incorporation held by by the Group
Registered office and place parent (%) Nature
Name of subsidiary address of business (%) of business
--------------------- ----------------------- ------------------- ------------- -------------- -------------
2nd Floor 7-9 Swallow
Centurion Mining Street, London, United
Limited England, W1B 4DE Kingdom 100% 100% Dormant
--------------------- ----------------------- ------------------- ------------- -------------- -------------
2nd Floor 7-9 Swallow
Centurion Universal Street, London, United
Limited England, W1B 4DE Kingdom 100% 100% Holding
--------------------- ----------------------- ------------------- ------------- -------------- -------------
Centurion Resources Schottenring 14 Austria Nil 100% Exploration
GmbH /525
1010 Vienna, Austria
-------------------------------------------- -------------------- ------------- -------------- -------------
2nd Floor 7-9 Swallow
Finland Investments Street, London, United
Limited England, W1B 4DE Kingdom 100% 100% Holding
--------------------- ----------------------- ------------------- ------------- -------------- -------------
FinnAust Mining Kummunkatu 23, Finland Nil 100% Exploration
Finland Oy FI-83500 Outokumpu,
Finland
--------------------- ----------------------- ------------------- ------------- -------------- -------------
FinnAust Mining Kummunkatu 23, Finland Nil 100% Exploration
Northern Oy FI-83500 Outokumpu,
Finland
--------------------- ----------------------- ------------------- ------------- -------------- -------------
2nd Floor 7-9 Swallow
Street, London,
BJ Mining Limited England, W1B 4DE BVI 100% 100% Exploration
--------------------- ----------------------- ------------------- ------------- -------------- -------------
2nd Floor 7-9 Swallow
Disko Exploration Street, London, United
Limited England, W1B 4DE Kingdom 100% 100% Exploration
--------------------- ----------------------- ------------------- ------------- -------------- -------------
Dundas Titanium c/o Nuna Advokater Greenland Nil 100% Exploration
A/S ApS, Qullilerfik
2, 6, Postboks 59,
Nuuk 3900, Greenland
--------------------- ----------------------- ------------------- ------------- -------------- -------------
All subsidiary undertakings are included in the consolidation.
The proportion of the voting rights in the subsidiary undertakings held directly by the parent company do not differ from the proportion of ordinary shares held.
10. Trade and other receivables
Group Company
-------------------------- --------------------------
31 December 31 December 31 December 31 December
2018 2017 2018 2017
Current GBP GBP GBP GBP
------------------------------------ ------------ ------------ ------------ ------------
Trade receivables 30,237 30,614 30,236 30,614
Amounts owed by Group undertakings - - 191,346 163,519
Amounts owed by Directors - 41,623 - 41,623
Prepayments 72,989 55,587 62,685 43,404
VAT receivable (See note 25) 517,178 346,274 463,704 287,731
Other receivables 148,556 168,772 92,649 54,000
------------------------------------ ------------ ------------ ------------ ------------
Total 768,960 642,870 840,620 620,891
------------------------------------ ------------ ------------ ------------ ------------
The fair value of all receivables is the same as their carrying values stated above.
At 31 December 2018 all trade and other receivables were fully performing. No ageing analysis is considered necessary as the Group has no significant trade receivable receivables which would require such an analysis to be disclosed under the requirements of IFRS 7.
The carrying amounts of the Group and Company's trade and other receivables are denominated in the following currencies:
Group Company
-------------------------- --------------------------
31 December 31 December 31 December 31 December
2018 2017 2018 2017
GBP GBP GBP GBP
-------------- ------------ ------------ ------------ ------------
UK Pounds 618,352 463,315 809,699 620,891
Euros 70,756 82,615 - -
Danish Krone 79,852 96,940 30,921 -
-------------- ------------ ------------ ------------ ------------
768,960 642,870 840,620 620,891
-------------- ------------ ------------ ------------ ------------
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.
11. Cash and cash equivalents
Group Company
-------------------------- --------------------------
31 December 31 December 31 December 31 December
2018 2017 2018 2017
GBP GBP GBP GBP
-------------------------- ------------ ------------ ------------ ------------
Cash at bank and in hand 8,843,709 2,901,922 8,777,619 2,820,884
-------------------------- ------------ ------------ ------------ ------------
All of the UK entities cash at bank is held with institutions with an AA- credit rating. The Finland and Greenland entities cash at bank is held with institutions whose credit rating is unknown.
The carrying amounts of the Group and Company's cash and cash equivalents are denominated in the following currencies:
Group Company
-------------------------- --------------------------
31 December 31 December 31 December 31 December
2018 2017 2018 2017
GBP GBP GBP GBP
-------------- ------------ ------------ ------------ ------------
UK Pounds 8,781,031 2,820,998 8,777,619 2,820,884
Euros 4,762 68,491 - -
Danish Krone 57,916 12,433 - -
-------------- ------------ ------------ ------------ ------------
8,843,709 2,901,922 8,777,619 2,820,884
-------------- ------------ ------------ ------------ ------------
12. Trade and other payables
Group Company
-------------------------- --------------------------
31 December 31 December 31 December 31 December
2018 2017 2018 2017
GBP GBP GBP GBP
------------------ ------------ ------------ ------------ ------------
Trade payables 514,490 424,372 326,225 297,504
Other creditors 125,671 76,422 13,861 8,657
Accrued expenses 143,675 63,677 129,468 52,145
------------------ ------------ ------------ ------------ ------------
783,836 564,471 469,554 358,306
------------------ ------------ ------------ ------------ ------------
Trade payables include amounts due of GBP395,950 in relation to exploration and evaluation activities.
13. Deferred tax
An analysis of deferred tax liabilities is set out below.
Group Company
------------------ ------------
2018 2017 2018 2017
GBP GBP GBP GBP
-------------------------------- -------- -------- ----- -----
Deferred tax liabilities
- Deferred tax liability after
more than 12 months 496,045 496,045 - -
-------------------------------- -------- -------- ----- -----
Deferred tax liabilities 496,045 496,045 - -
-------------------------------- -------- -------- ----- -----
The Group has additional capital losses of approximately GBP8,873,586 (2017: GBP643,168) and other losses of approximately GBP5,971,780 (2017: GBP5,067,761) available to carry forward against future taxable profits. No deferred tax asset has been recognised in respect of these tax losses because of uncertainty over the timing of future taxable profits against which the losses may be offset.
14. Financial Instruments by Category
31 December 2018 31 December
Group 2017
------------------------------- --------- ------------------
Amortised Amortised
cost FVTPL Total cost FVTPL Total
Assets per Statement of Financial GBP GBP
Performance GBP GBP GBP GBP
------------------------------------ --------- ------- ----------- --------- ------- ---------
Trade and other receivables
(excluding prepayments) 695,971 - 695,971 587,283 - 587,283
Financial assets at fair value
through profit or loss - 330,402 330,402 - - -
Cash and cash equivalents 8,843,709 - 8,843,709 2,901,922 - 2,901,922
--------- ------- ----------- --------- ------- ---------
9,539,680 330,402 9,870,082 3,489,205 - 3,489,205
--------- ------- ----------- --------- ------- ---------
31 December
31 December 2018 2017
Amortised Amortised
cost Total cost Total
Liabilities per Statement
of Financial Performance GBP GBP GBP GBP
------------------------------------ --------- ------- ----------- ---------
Trade and other payables (excluding
non-financial liabilities) 783,836 783,836 564,471 564,471
--------- ------- ----------- ---------
783,836 783,836 564,471 564,471
--------- ------- ----------- ---------
Company
31 December 2018 31 December 2017
Amortised Amortised
cost FVTPL Total cost FVTPL Total
Assets per Statement of
Financial Performance GBP GBP GBP GBP GBP GBP
---------------------------- ------------ ------- ------------ --------- ------- ---------
Trade and other receivables
(excluding prepayments) 777,935 - 777,935 577,487 - 577,487
Financial assets at fair
value through profit or
loss - 330,402 330,402 - - -
Cash and cash equivalents 8,777,619 - 8,777,619 2,820,884 - 2,820,884
------------ ------- ------------ --------- ------- ---------
9,555,554 330,402 9,885,956 3,398,371 - 3,398,371
------------ ------- ------------ --------- ------- ---------
31 December 2018 31 December 2017
At amortised At amortised
cost Total cost Total
Liabilities per Statement
of Financial Performance GBP GBP GBP GBP
---------------------------- ------------ ------- ------------ ---------
Trade and other payables
(excluding non-financial
liabilities) 469,554 469,554 358,306 358,306
------------ ------- ------------ ---------
469,554 469,554 358,306 358,306
------------ ------- ------------ ---------
15. Share capital and premium
Number of shares Share capital
Group and Company
31 December 31 December 31 December 31 December
2018 2017 2018 2017
Ordinary shares 850,007,782 771,357,866 85,001 77,136
Deferred shares 588,104,193 588,104,193 588,104 588,104
Deferred A shares 71,271,328,120 71,271,328,120 7,127,132 7,127,132
--------------------- --------------- --------------- ------------ ------------
Total 72,709,440,095 72,630,790,179 7,800,237 7,792,372
--------------------- --------------- --------------- ------------ ------------
Number of
Issued and fully paid at 0.01 Ordinary Share capital Share premium Total
pence per share shares GBP GBP GBP
----------------------------------- ------------ -------------- -------------- -----------
At 1 July 2016 484,400,804 48,440 16,183,675 16,232,115
----------------------------------- ------------ -------------- -------------- -----------
Issue of new shares - 13 July
2016 (1) 10,000,000 1,000 479,100 480,100
Issue of new shares - 8 December
2016 (2 & 3) 117,184,457 11,719 5,228,092 5,239,811
Issue of new shares - 4 January
2017 (4) 7,584,238 758 499,242 500,000
Exercise of Options - 22 February
2017 1,000,000 100 19,900 20,000
Exercise of Options - 27 February
2017 2,000,000 200 144,800 145,000
Issue of new shares - 13 March
2017 (5) 108,071,388 10,807 583,586 594,393
Exercise of Options - 31 March
2017 1,333,333 133 99,867 100,000
Exercise of Options - 4 April
2017 1,625,000 163 52,338 52,501
Exercise of Options - 20 April
2017 2,766,667 277 228,472 228,749
Exercise of Options - 8 May
2017 250,000 25 18,725 18,750
Exercise of Options - 24 May
2017 1,500,000 150 112,350 112,500 Issue of new shares - 9 June 2017 (6) 29,166,667 2,917 3,172,574 3,175,490 Exercise of Options - 28 July 2017 1,550,000 155 154,845 155,000 Exercise of Options - 31 October 2017 1,284,366 128 128,308 128,436 Exercise of Warrants - 1 November 2017 1,000,000 100 69,900 70,000 Exercise of Warrants - 18 December 2017 640,946 64 44,802 44,866 ----------------------------------- ------------ -------------- -------------- ----------- As at 31 December 2017 771,357,866 77,136 27,220,576 27,297,712 ----------------------------------- ------------ -------------- -------------- ----------- As at 1 January 2018 771,357,866 77,136 27,220,576 27,297,712 ----------------------------------- ------------ -------------- -------------- ----------- Issue of new shares - 11 January 2018 143,495 14 22,486 22,500 Issue of new shares - 1 February 2018 (7) 77,272,728 7,728 16,351,200 16,358,928 Issue of new shares - 23 May 2018 97,835 10 22,490 22,500 Exercise of Options - 1 October 2018 1,000,000 100 99,900 100,000 Issue of new shares - 19 October 2018 135,858 13 22,487 22,500 ----------------------------------- ------------ -------------- -------------- ----------- As at 31 December 2018 850,007,782 85,001 43,739,139 43,824,140 ----------------------------------- ------------ -------------- -------------- ----------- (1) Includes issue costs of GBP19,900 (2) Issue of shares for deferred cash consideration for BJ Mining Limited. (3) Includes issue costs of GBP334,347 (4) Issue of shares for acquisition of Avannaa Exploration Limited (5) Issue of shares for remaining ownership in BJ Mining Limited (6) Includes issue costs of GBP324,509 (7) Includes issue costs of GBP641,071
(8) The share capital disclosure has been restated from the prior year to include a more detailed split between class of share. In addition, the deferred shares which were disclosed separately on the Statement of Financial Position have been included within share capital for clearer presentation. This does not constitute a prior year adjustment.
Deferred Shares (nominal value of 0.01 Number of Deferred Share capital pence per share) shares GBP ------------------------------------------ ------------------- -------------- As at 1 July 2016 588,104,193 588,104 ------------------------------------------ ------------------- -------------- As at 31 December 2017 588,104,193 588,104 ------------------------------------------ ------------------- -------------- As at 1 January 2018 588,104,193 588,104 ------------------------------------------ ------------------- -------------- As at 31 December 2018 588,104,193 588,104 ------------------------------------------ ------------------- -------------- Deferred A Shares (nominal value of 0.01 Number of Deferred Share capital pence per share) A shares GBP -------------------------------------------- ------------------- -------------- As at 1 July 2016 71,271,328,120 7,127,132 -------------------------------------------- ------------------- -------------- As at 31 December 2017 71,271,328,120 7,127,132 -------------------------------------------- ------------------- -------------- As at 1 January 2018 71,271,328,120 7,127,132 -------------------------------------------- ------------------- -------------- As at 31 December 2018 71,271,328,120 7,127,132 -------------------------------------------- ------------------- --------------
On 11 January 2018 the Company issued and allotted 143,495 new Ordinary Shares at a price of 15.68 pence per share per share to extinguish liabilities for services provided in the period ended 31 December 2017.
On 1 February 2018 the Company raised GBP16,358,928 via the issue and allotment of 77,272,728 new Ordinary Shares at a price of 22 pence per share.
On 23 May 2018 the Company issued and allotted 97,835 new Ordinary Shares at a price of 23 pence per share per share as consideration for services provided during the year.
On 1 October 2018 the Company issued and allotted 1,000,000 new Ordinary Shares at a price of 10 pence per share as an exercise of options.
On 19 October 2018 the Company issued and allotted 135,858 new Ordinary Shares at a price of 16.56 pence per share per share as consideration for services provided during the year.
16. Share based payments
The Company has established a share option scheme for Directors, employees and consultants to the Group. Share options and warrants outstanding and exercisable at the end of the period have the following expiry dates and exercise prices:
Options & Warrants
Exercise price 31 December 31 December
Grant Date Expiry Date in GBP per share 2018 2017
----------------- -------------- ------------------ ------------ ------------
29 November
2013 29 May 2019 0.10 5,000,000 6,000,000
4 March 2016 3 March 2019 0.06 1,000,000 1,000,000
17 December 17 December
2016 2021 0.07 2,689,768 2,689,768
9 June 2017 9 June 2022 0.165 1,025,000 1,025,000
17 October
17 October 2017 2020 0.20 5,350,000 5,350,000
17 October
17 October 2017 2020 0.25 5,350,000 5,350,000
17 October
17 October 2017 2020 0.30 5,350,000 5,350,000
----------------- -------------- ------------------ ------------ ------------
25,764,768 26,764,768
-------------------------------- ------------------ ------------ ------------
The Company and Group have no legal or constructive obligation to settle or repurchase the options or warrants in cash.
The fair value of the share options and warrants was determined using the Black Scholes valuation model. The parameters used are detailed below:
2013 Options 2016 Options 2016 Options 2017 Options
------------- ------------- ------------- -------------
Granted on: 29/11/2013 4/3/2016 17/12/2016 9/6/2017
Life (years) 5.5 years 3 years 5 years 5 years
Share price (pence per
share) 5.7p 3.03p 7p 15.5p
Risk free rate 2.25% 0.81% 0.81% 0.56%
Expected volatility 26.41% 48.40% 17.64% 31.83%
Expected dividend yield - - - -
Marketability discount 20% 20% 20% 20%
Total fair value (GBP000) 4 3 17 34
2017 Options 2017 Options 2017 Options
------------- ------------- -------------
Granted on: 17/10/2017 17/10/2017 17/10/2017
Life (years) 3 years 3 years 3 years
Share price (pence per
share) 17.75p 17.75p 17.75p
Risk free rate 0.5% 0.5% 0.5%
Expected volatility 13.85% 13.85% 13.85%
Expected dividend yield - - -
Marketability discount 20% 20% 20%
Total fair value (GBP000) 42 8 1
The expected volatility of the 2013, 2016 and 2017 options is based on historical volatility for the six months prior to the date of granting.
The risk-free rate of return is based on zero yield government bonds for a term consistent with the option life.
A reconciliation of options and warrants granted over the year to 31 December 2018 is shown below:
2018 2017
--------------------------- ----------------------------
Weighted Weighted
average average
exercise exercise
Number price (GBP) Number price (GBP)
-------------------------- ------------ ------------- ------------- -------------
Outstanding at beginning
of period 26,764,768 0.1879 19,309,366 0.1347
Expired - - - -
Exercised (1,000,000) 0.1000 (13,950,312) 0.1347
Granted - - 21,405,714 0.2210
-------------------------- ------------ ------------- ------------- -------------
Outstanding as at period
end 25,764,768 0.1913 26,764,768 0.1879
-------------------------- ------------ ------------- ------------- -------------
Exercisable at period
end 25,764,768 0.1913 26,764,768 0.1879
-------------------------- ------------ ------------- ------------- -------------
2018 2017
--------------------------------------------------- --------------------------------------------------
Weighted Weighted Weighted Weighted
Weighted average average Weighted average average
Range average remaining remaining average remaining remaining
of exercise exercise life life exercise life life
prices price Number expected contracted price Number expected contracted
(GBP) (GBP) of shares (years) (years) (GBP) of shares (years) (years)
------------- ---------- ----------- ------------ ------------ ---------- ----------- ----------- ------------
0 - 0.05 - - - - - - - -
0.05 -
2.00 0.1913 25,764,768 1.65 1.65 0.1879 26,764,768 2.61 2.61
------------- ---------- ----------- ------------ ------------ ---------- ----------- ----------- ------------
During the period there was a charge of GBPnil (2017: GBP119,439) in respect of share options.
17. Other reserves
Group
--------- --------------------------------------------------------------------
Foreign
currency Reverse Share
Merger translation acquisition Redemption option
reserve reserve reserve reserve reserve Total
GBP GBP GBP GBP GBP GBP
---------------------- --------- ------------- ------------- ----------- --------- ------------
At 31 December 2017 166,000 809,052 (8,071,001) 36,463 109,582 (6,949,904)
---------------------- --------- ------------- ------------- ----------- --------- ------------
Currency translation
differences - 150,660 - - - 150,660
Exercised options - - - - (648) (648)
---------------------- --------- ------------- ------------- ----------- --------- ------------
At 31 December 2018 166,000 959,712 (8,071,001) 36,463 108,934 (6,799,892)
---------------------- --------- ------------- ------------- ----------- --------- ------------
Company
---------------------------------------------
Share
Merger Redemption option
reserve reserve reserve Total
GBP GBP GBP GBP
--------------------- --------- ----------- --------- --------
At 31 December 2017 166,000 36,463 109,582 312,045
---------------------- --------- ----------- --------- --------
Exercised options - - (648) (648)
---------------------- --------- ----------- --------- --------
At 31 December 2018 166,000 36,463 108,934 311,397
---------------------- --------- ----------- --------- --------
18. Employee benefit expense
Group Company
---------------------------- ----------------------------
18 month 18 month
period period
Year ended ended Year ended ended
31 December 31 December 31 December 31 December
2018 2017 2018 2017
Staff costs (excluding Directors) GBP GBP GBP GBP
----------------------------------- ------------- ------------- ------------- -------------
Salaries and wages 790,179 242,059 279,567 216,984
Social security costs 108,061 18,656 9,836 16,476
Retirement benefit costs 1,616 700 1,374 700
----------------------------------- ------------- ------------- ------------- -------------
899,856 261,415 290,777 234,160
----------------------------------- ------------- ------------- ------------- -------------
The average monthly number of employees for the Group during the year was 16 (period ended 31 December 2017:11) and the average monthly number of employees for the Company was 9 (period ended 31 December 2017: 6).
Of the above Group staff costs, GBP485,063 (period ended 31 December 2017: GBP135,513) has been capitalised in accordance with IFRS 6 as exploratory related costs and are shown as an intangible addition in the year.
19. Directors' remuneration
Year ended 31 December 2018
Short-term Post-employment Share based
benefits benefits payments Total
GBP GBP GBP GBP
------------------------- ---------- --------------- ----------- -------
Executive Directors
Roderick McIllree 182,783 640 - 183,423
Non-executive Directors
Greg Kuenzel (1) 10,286 5 - 10,291
Ian Henderson 19,022 - - 19,022
Garth Palmer 16,114 330 - 16,444
Peter Waugh 24,000 - - 24,000
Michael Hutchinson 25,000 315 - 25,315
277,205 1,290 - 278,495
---------- --------------- ----------- -------
Of the above Group Directors Remuneration, GBP42,905 (31 December 2017: GBP18,075) has been capitalised in accordance with IFRS 6 as exploratory related costs and are shown as an intangible addition in the year.
Period ended 31 December 2017
-------------------------------------------------
Short-term Post-employment Share based
benefits benefits payments Total
GBP GBP GBP GBP
------------------------ ---------- --------------- ----------- -------
Executive Directors
Roderick McIllree 34,524 106 - 34,630
Non-executive Directors
Greg Kuenzel 49,328 109 - 49,437
Graham Marshall (2) - - - -
Peter Waugh 12,328 94 6,278 18,700
Michael Hutchinson 8,334 - 5,795 14,129
---------- --------------- ----------- -------
104,514 309 12,073 116,896
---------- --------------- ----------- -------
(1) Gregory Kuenzel resigned on 2 June 2018
(2) Graham Marshall resigned on 16 October 2017
Details of fees paid to Companies and Partnerships of which the Directors detailed above are Directors and Partners have been disclosed in Note 27.
The remuneration of Directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.
20. Finance income
Group
----------------------------
Year ended Period ended
31 December 31 December
2018 2017
GBP GBP
-------------------------------------------------- ------------- -------------
Interest received from cash and cash equivalents 12,209 1,717
-------------------------------------------------- ------------- -------------
Finance Income 12,209 1,717
-------------------------------------------------- ------------- -------------
21. Other gain/(losses)
Group
----------------------------
Year ended Period ended
31 December 31 December
2018 2017
GBP GBP
------------------------------------------ ------------- -------------
Loss on financial assets measured at fair (96,573) -
value through profit or loss
Other gains/(losses) 3,462 -
------------------------------------------ ------------- -------------
Other gain/(losses) (93,111) -
------------------------------------------ ------------- -------------
22. Income tax expense
No charge to taxation arises due to the losses incurred.
The tax on the Group's loss before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the losses of the consolidated entities as follows:
Group
----------------------------
Year ended Period ended
31 December 31 December
2018 2017
GBP GBP
----------------------------------------------- ------------- -------------
Loss before tax (10,776,686) (2,680,708)
----------------------------------------------- ------------- -------------
Tax at the applicable rate of 20.30% (2017:
21.82%) (2,187,667) (584,930)
Effects of:
Expenditure not deductible for tax purposes 1,807,738 5,120
Depreciation in excess of/(less than) capital
allowances (450,153) (593)
Net tax effect of losses carried forward 830,082 580,403
----------------------------------------------- ------------- -------------
Tax charge - -
----------------------------------------------- ------------- -------------
The weighted average applicable tax rate of 20.3% (2017: 21.82%) used is a combination of the 19% standard rate of corporation tax in the UK, 20% Finnish corporation tax and 30% Greenlandic corporation tax.
The Group has a potential deferred income tax asset of approximately GBP1,179,569 (2017: GBP1,028,755) due to tax losses available to carry forward against future taxable profits. The Company has tax losses of approximately GBP5,897,843 (2017: GBP5,067,761) available to carry forward against future taxable profits. No deferred tax asset has been recognised on accumulated tax losses because of uncertainty over the timing of future taxable profits against which the losses may be offset.
23. Earnings per share
Group
The calculation of the total basic earnings per share of (1.279) pence (31 December 2017: (0.408) pence) is based on the loss attributable to equity holders of the parent company of GBP10,776,686 (31 December 2017: GBP2,680,708) and on the weighted average number of ordinary shares of 842,546,640 (31 December 2017: 656,936,094) in issue during the year.
In accordance with IAS 33, basic and diluted earnings per share are identical for the Group as the effect of the exercise of share options would be to decrease the earnings per share. Details of share options that could potentially dilute earnings per share in future periods are set out in Note 16.
24. Expenses by nature
Group
----------------------------
Year ended Period ended
31 December 31 December
2018 2017
GBP GBP
------------------------------------------------ ------------- -------------
Directors' fees 107,299 81,914
Employee salaries 173,859 211,175
AIM related costs (including Public Relations) 345,917 461,770
Establishment expenses 91,211 111,308
Auditor remuneration 69,727 57,981
Auditor fees for other services 126,579 127,096
Travel & subsistence 141,906 160,549
Professional & consultancy fees 397,944 496,622
Insurance 54,832 57,102
Depreciation 250,590 46,868
Share Option expense - 119,439
Other expenses 40,987 179,488
------------------------------------------------ ------------- -------------
Total administrative expenses 1,800,851 2,111,312
------------------------------------------------ ------------- -------------
Services provided by the Company's auditor and its associates
During the year, the Group (including overseas subsidiaries) obtained the following services from the Company's auditors and its associates:
Group
-------------------------
Period
Year ended ended 31
31 December December
2018 2017
GBP GBP
------------------------------------------------- ------------- ----------
Fees payable to the Company's auditor and its
associates for the audit of the Parent Company
and Consolidated Financial Statements 47,000 44,500
Fees payable to the Company's auditor for tax
compliance & other services 70,778 92,235
------------------------------------------------- ------------- ----------
25. Commitments
(a) Royalty agreements
As part of the contractual arrangement with Magnus Minerals Limited ('Magnus') the Group has agreed to pay royalties on revenue from mineral sales arising from mines developed by the Group. Under the terms of the respective Royalty Agreements between Magnus and the Company, the Group shall pay the following:
-- 0.5% of net smelter returns over mineral production from the Kainuu Schist Belt tenements;
-- 1.0% of net smelter returns over mineral production from the Outokumpu Savonara Mine Belt tenements;
-- 1.5% of net smelter returns over mineral production from the Enonoski Area tenements; and -- 2.5% of net smelter returns over mineral production from the Hammaslahti Area tenements.
The Enonoski and Hammaslahti Royalty Agreements further provide that royalty entitlements may be extended to future rights with the respective areas of influence defined with the agreements.
Additionally, under the terms of the Kainuu Schist Belt Royalty Agreement and the Outokumpu Savonara Mine Belt Royalty Agreement the Group is obligated to pay SES Finland Limited a 0.5% net smelter royalty in respect of production from the associated tenements and Western Areas Limited ("Western Areas") 0.5% of net smelter returns over mineral production of the tenements using a biological leaching technology owned by Western Areas.
(b) License commitments
Bluejay now owns 5 mineral exploration licenses in Greenland. Licence 2015/08 is a part of the Dundas project and licences 2011/31, 2012/29, 2017/01 & 2018/16 are part of the Disko projects in Greenland. These licences include commitments to pay annual licence fees and minimum spend requirements.
As at 31 December 2018 these are as follows:
Group
-----------------------------------------
Group License Minimum
fees spend requirement Total
GBP GBP GBP
--------------------------------------- -------- ------------------- ----------
Not later than one year 128,050 634,756 762,806
Later than one year and no later than
five years 146,975 5,124,649 5,271,624
--------------------------------------- -------- ------------------- ----------
Total 275,025 5,759,405 6,034,430
--------------------------------------- -------- ------------------- ----------
(c) Operating lease commitments
The Group leases office premises under a non-cancellable operating lease agreement. The lease is on an initial fixed term of two years from 31 July 2017. The lease expenditure charged to the Income Statement during the year is disclosed in Note 24 and is included within establishment expenses.
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Group
--------------------------
31 December 31 December
2018 2017
GBP GBP
--------------------------------------------- ------------ ------------
Not later than one year 35,000 60,000
Later than one year but not later than five
years - 35,000
--------------------------------------------- ------------ ------------
Total lease commitment 35,000 95,000
--------------------------------------------- ------------ ------------
26. Contingent liabilities
The Directors are in the process of appealing an assessment made by HMRC which relates to the Company's ability to claim input VAT because, in the view of HMRC, the Company does not technically constitute a business for the purposes of VAT and is not eligible to make such claims in connection with services it supplied to the Company's subsidiaries. The initial assessment raised by HMRC is for an amount of GBP255,492 and relates to input VAT claimed and repaid by HMRC between 2012-2015. At the point the assessment was raised, HMRC ceased to repay any further claims for input VAT made by the Company. The Company has continued to submit the appropriate returns to HMRC and as a result, the Company has a receivable from HMRC of GBP463,704 at 31 December 2018 which is included within trade and other receivables. HMRC has made a further protective assessment for this amount, bringing the total amount of the dispute at 31 December 2018 to GBP719,196.
The Directors strongly refute the view of HMRC that the Company does not constitute a business for VAT purposes. The case is proceeding to Tribunal and resolution is not expected any earlier than Q4 2019. The Company has engaged professional services of legal counsel who will be representing it before the Tribunal. Counsel confirms the Company has a strong case.
Accordingly, the Directors believe that the amount of GBP719,196 will be recovered in full and therefore have not recognised any impairment to the carrying value of this amount.
27. Related party transactions
Loans to Group undertakings
Amounts receivable as a result of loans granted to subsidiary undertakings are as follows:
Company
--------------------------
31 December 31 December
2018 2017
GBP GBP
---------------------------- ------------ ------------
Finland Investments Ltd - 310,451
FinnAust Mining Finland Oy 6,398,621 5,087,869
Centurion Mining Limited 345 195
BJ Mining Limited 1,010,623 1,155,963
Dundas Titanium A/S 11,112,258 3,256,326
Disko Exploration Limited 396,212 207,067
---------------------------- ------------ ------------
At 31 December (Note 9) 18,918,059 10,017,871
---------------------------- ------------ ------------
Loans granted to subsidiaries have increased during the year due to additional loans being granted to the subsidiaries, and foreign exchange gain of GBP208,836, given that no loans were repaid during the year.
These amounts are unsecured and repayable in Euros and Danish Krone when sufficient cash resources are available in the subsidiaries.
All intra Group transactions are eliminated on consolidation.
Other transactions
The Group defines its key management personnel as the Directors of the Company as disclosed in the Directors' Report.
Heytesbury Corporate LLP, a limited liability partnership of which Garth Palmer is a partner, was paid a fee of GBP84,000 for the year ended 31 December 2018 (18 month period ended 31 December 2017: GBP126,000) for the provision of corporate management, accounting and consulting services to the Company. There was a balance of GBP8,537 owing at year end (31 December 2017: GBPnil) .
RM Corporate Limited, a limited company of which Roderick McIllree is a director, was paid a fee of GBP126,996 for the year ended 31 December 2018 (18 month period ended 31 December 2017: GBP97,500) for the provision of corporate management and consulting services to the Company. There was a balance of GBP12,700 owing at year end (31 December 2017: GBPnil).
PMW Consulting Limited, a limited company of which Peter Waugh is a director, was paid a fee of GBP52,600 for the year ended 31 December 2018 (18 month period ended 31 December 2017: GBP40,838) for consulting services to the Company. There was a balance of GBP10,000 owing at year end (31 December 2017: GBPnil).
Greenland Gas & Oil Limited, a limited company of which Roderick McIllree is a director, was paid a fee of GBP9,300 for the year ended 31 December 2018 (18 month period ended 31 December 2017: GBP45,400) for geological information systems consulting services to the Company. There was no balance outstanding at the year-end (31 December 2017: GBPnil).
JW Geological Limited, a limited company of which Jeremy Whybrow is a director, was paid a fee of GBP16,667 for the year ended 31 December 2018 (31 December 2017: GBP63,988) for consulting services to the Company. Jeremy Whybrow is a substantial shareholder of the Company. There was no balance outstanding at the period-end.
28. Ultimate controlling party
The Directors believe there is no ultimate controlling party.
29. Events after the reporting date
On 24 January 2019, warrant holders exercised warrants over 1,000,000 new ordinary shares at 6p per share and 1,461,615 new ordinary shares at 7p per share.
On 3 May 2019, option holders exercised options over 300,000 new ordinary shares at a price of 10p per share.
On 10 May 2019, option holders exercised options over 2,200,000 new ordinary shares at a price of 10p per share.
On 24 May 2019, Bluejay Mining plc and Dundas Titanium A/S entered into an agreement with Rio Tinto Iron and Titanium Canada Inc. ('RTIT') to further analyse the Ilmenite from the Dundas project. The Group and RTIT will work together to review and improve the technical work that has been completed at Dundas to date.
**ENDS**
For further information please visit http://www.titanium.gl or contact:
Roderick McIllree Bluejay Mining plc +44 (0) 20 7907 9326
SP Angel Corporate Finance
Ewan Leggat LLP +44 (0) 20 3470 0470
---------------------------- ---------------------
SP Angel Corporate Finance
Soltan Tagiev LLP +44 (0) 20 3470 0470
---------------------------- ---------------------
Andrew Chubb H&P Advisory Ltd. +44 (0) 207 907 8500
---------------------------- ---------------------
Ingo Hofmaier H&P Advisory Ltd. +44 (0) 207 907 8500
---------------------------- ---------------------
Hugo de Salis St Brides Partners Ltd +44 (0) 20 7236 1177
---------------------------- ---------------------
Cosima Akerman St Brides Partners Ltd +44 (0) 20 7236 1177
---------------------------- ---------------------
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
FR EASKDEFNNEFF
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June 03, 2019 11:34 ET (15:34 GMT)
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