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Jangada Mines Plc LSE:JAN London Ordinary Share GB00BZ11WQ61 ORD GBP0.0004
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Jangada Mines PLC Interim Results

31/03/2020 10:31am

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Jangada Mines PLC

31 March 2020

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

31 March 2020

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

Unaudited Interim Results for 6 Months Ended 31 December 2019

Jangada Mines plc ('Jangada' or 'the Company'), a natural resources company, is pleased to announce its unaudited Interim Results for the six-month period ended 31 December 2019.

Chairman's Statement

We began 2020 with our focus firmly on continuing to realise value at our 100% owned Pitombeiras Vanadium Project ('Pitombeiras' or 'the Project'), located in the state of Ceará, Brazil. During the period under review, we established the strong mineral potential of the asset as drilling, magnetic data and rock chip geochemistry enabled us to estimate a JORC (2012) Exploration Target of between 40Mt to 60Mt at 0.3% to 0.6% vanadium oxide (V2O5), 40% to 55% iron oxide (Fe2O3) and 8% to 10% titanium dioxide (TiO2). Our current focus is now on establishing a JORC compliant Mineral Resource estimate.

We commenced a 2,500m drill programme in January 2020 to test the three most prospective magnetic anomalies at the Pitombeiras North, Pitombeiras South and Goela targets over a 3km NE-SW structural trend. Drilling is scheduled to be completed in Q2 2020. Results received to date are very encouraging with three drill holes at Pitombeiras North all intersecting vanadium titanomagnetite ('VTM') mineralisation. These include 38.00 meters at 0.558% V2O5, 11.31% TiO2 and 38.40% Fe2O3, and 32.18 meters at 0.547%, 10.79% TiO2 and 37.22% Fe2O3, including 13.25 meters at 0.740% V2O5, 14.63% TiO2and 48.9% Fe2O3. However, as announced at 27 March 2020, given the prevailing environment and impact of COVID-19, and considering in particular the health and safety risks of keeping our team at site at these times of uncertainty, we have elected to reduce the programme to a total of approximately 1,350 metres. It is expected that this will not have a material impact on our immediate plans because, by completing the planned holes (albeit to a shallower depth) we will have tested the boundaries of the anomaly as required and we will have sufficient data to continue with a preliminary economic assessment ('PEA') and JORC resource estimate. We look forward to sharing further results from this drilling in due course.

The confirmation of VTM mineralisation is a significant achievement as VTM type deposits are the principal sources of vanadium globally. Further boosting this commercial potential, initial Davis Tube Recovery ('DTR') test work completed at Pitombeiras in September 2019 demonstrated that the mineralisation responds very well to magnetic separation with mass recovery of 59% and 62% and concentrate grades increasing to greater than 1.2% V2O5, including 95% Fe2O3. The titanium dioxide was concentrated on a non-magnetic fraction reaching grades around 33% TiO2 and the results also established that the magnetic recoveries produced a low silicon dioxide and low aluminium oxide product. This confirms that we are able to produce a product of potentially economic grades.

Of course, resource quality is not the only factor to be considered when assessing the commercial potential of an asset; the ability to access and export is critical too. In November 2019, C. Steinweg Handelsveem Latin America S.A. was commissioned to prepare an initial analysis of the most favourable logistical routes for vanadium product from Pitombeiras on the basis of an estimated production of 300kt of V2O5 concentrate in 2020, increasing to 600kt of V2O5 concentrate in 2022. The study identified three possible routes to market: two to Main Chinese Ports ('MCP') and one to Brazil-based Companhia Siderurgica de Pecém ('CSP') refinery. These were based on shipping from both the Pecém and Fortaleza seaports in Ceará state, which are within the Ceará Free Trade Zone, an industrial free trade area for exporting companies, which provides tax and exchange benefits and simplified administrative procedures that positively impact selling margins and bring additional competitive advantages to Jangada.

Total indicative costs (ground and ocean costs) to transport ore from Pitomberias to MCP using the Fortaleza seaport have been estimated at US$84.64/wet metric tonne (wmt). Using the Pecem seaport as an alternative route, the total indicative costs have been estimated at US$90.02/wmt. Total indicative costs considering CSP as a final destination have been estimated at US$36.00/wmt, which only involves ground transportation using trucks as CSP is located close to Pecém. These findings prove that the Project is well located to reach overseas markets on a competitive cost basis and will form part of a Preliminary Economic Assessment ('PEA'), which we are in the process of preparing.

Testament to our confidence in the growing importance of this resource and also of Pitombeiras' potential, in November 2019, we extended the Project's footprint having identified a new target, Goela, which is currently being targeted as one of our priority drill targets. Following this, in February 2020 we added an additional 864 hectares to include additional tenements known as Mocidade, which have prospective airborne magnetic anomalies similar to the Pitombeiras VTM targets. The total Project area is now 1,958 hectares.

Detailed geological mapping and rock chip sampling will be undertaken at Mocidade as part of our approved multi-phase exploration programme across the full licence area. Alongside this and the current drilling, we will also undertake a ground magnetic survey, a detailed topographic survey and test soil geochemistry in order to support the definition of a JORC resource. We also intend to complete metallurgical test work on three bulk samples (200 kg/sample) in order to define the best process for ore beneficiation.

As a result of Pitombeiras' significant value potential, we took the strategic decision to firmly focus our attention and resources on its rapid development. Accordingly, we divested our interest in Pedra Branca Brasil Mineracao Ltda, the entity that holds the Pedra Branca Project in Brazil ('Pedra Branca') to TSX-V listed Valore Metals Corp. ('ValOre') whilst retaining a strategic upside exposure through a significant shareholding in ValOre. We look forward to following ValOre's exploration efforts as it continues to unlock the Project's resource potential.

Financials

ValOre purchased Pedra Branca in August 2019 for CAD$3,000,000 alongside the issue of 25,000,000 ValOre common shares to Jangada. In February 2020, the final CAD$1,000,000 of cash consideration was received together with the first tranche of 500,000 deferred consideration ValOre common shares. The Company currently holds a 24.9% interest in ValOre, with the remaining 2,500,000 ValOre common shares due to Jangada payable in six-monthly instalments of 500,000 shares each. The consideration will support the Company's working capital requirements, allowing us to substantially progress the development of Pitombeiras, including the PEA and identification of the JORC resource.

Outlook

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

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

Brian McMaster

Executive Chairman

31 March 2020

CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHSED 31 DECEMBER 2019

 
                                                                         Unaudited 
                                                           Unaudited    Six months       Audited 
                                                          Six months         to 31    Year ended 
                                                      to 31 December      December       30 June 
                                                                2019          2018          2019 
                                             Notes             $'000         $'000         $'000 
                                                                       Restated(1) 
 
 Administration expenses                                       (605)         (701)       (1,590) 
 Operating Profit / (Loss) from 
  continuing operations                                        (605)         (701)       (1,590) 
 Finance expense                                                 (2)             -           (4) 
 Share of losses from associates                               (266)             -             - 
 Profit / (Loss) before tax                                    (873)         (701)       (1,594) 
 Tax expense                                   5                   -             -             - 
                                                    ----------------  ------------  ------------ 
 Profit / (Loss) from continuing 
  operations                                                   (873)         (701)       (1,594) 
 Discontinued operations 
 Profit / (loss) from discontinued 
  operations                                   7               6,277          (43)          (88) 
 Financial profit / (loss) for 
  the year                                                     5,404         (744)       (1,682) 
 Other comprehensive income: 
 Items that will or may be classified 
  to profit or loss: 
 Currency translation differences 
  arising on translation of foreign 
  operations                                                    (31)          (32)             3 
 Exchange differences reclassified                               259             -             - 
  on disposal of foreign operations 
 Currency translation differences                              (360)             -             - 
  arising on translation of equity 
  investments 
 Total comprehensive Profit / 
  (Loss) attributable to owners 
  of the parent                                                5,272         (776)       (1,679) 
                                                    ================  ============  ============ 
 
 Earnings / (Loss) per share from                              Cents         Cents         Cents 
  loss from continuing operations 
  attributable to the ordinary 
  equity holders of the Company 
  during the period 
 
 
        *    Basic (cents)                     6              (0.37)        (0.33)        (0.71) 
 
        *    Diluted (cents)                   6              (0.37)        (0.33)        (0.71) 
 
 Earnings / (Loss) per share attributable                      Cents         Cents         Cents 
  to the ordinary equity holders 
  of the Company during the period 
 
 
        *    Basic (cents)                     6                2.27        (0.35)        (0.75) 
 
        *    Diluted (cents)                   6                2.27        (0.35)        (0.75) 
 

1. The company has labelled the comparative information with the heading 'restated' to highlight the presentation of the discontinued operations and the currency exchange treatment on the 31 December 2018 information resulting in an immaterial adjustment to the income statement and the company's share capital, that is not the same as the prior year's financial information presented.

CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2019

 
                                                        Unaudited      Unaudited    Audited 
                                                      31 December    31 December    30 June 
                                                             2019           2018       2019 
                                             Notes          $'000          $'000      $'000 
 Assets                                                              Restated(1) 
 Non-current assets 
 Exploration and evaluation assets             8              179            563         41 
 Property, plant and equipment                                  2              3          - 
 Investments                                   9              100              -          - 
 Investments in associates                    10            3,721 
                                                            4,002            566         41 
 Current assets 
 Other receivables                            11            1,553             44         15 
 Cash and cash equivalents                                    327            718        117 
 Assets held for sale                                           -              -        782 
                                                            1,880            762        914 
 Total assets                                               5,882          1,328        955 
                                                    =============  =============  ========= 
 
 Liabilities 
 Current liabilities 
 Trade payables                                                39            254         41 
 Loans and borrowings                                          64             58         62 
 Accruals and other payables                                  128             68        698 
 Liabilities associated with assets 
  held for sale                                                 -              -         22 
                                                    -------------  -------------  --------- 
 Total liabilities                                            231            380        823 
 
 Issued capital and reserves attributable 
  to owners of the parent 
 Share capital                                12              178            122        123 
 Share premium                                              4,389          4,164      4,202 
 Translation reserve                                        (381)           (25)         10 
 Retained earnings                                          1,465        (3,313)    (4,203) 
                                                    -------------  -------------  --------- 
 Total equity                                               5,651            948        132 
                                                    -------------  -------------  --------- 
 Total equity & liabilities                                 5,882          1,328        955 
                                                    =============  =============  ========= 
 

1. The company has labelled the comparative information with the heading 'restated' to highlight the currency exchange treatment on the 31 December 2018 information resulting in an immaterial adjustment to the share capital and share premium balances, that is not the same as the prior year's financial information presented.

CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHSED 31 DECEMBER 2019

 
 
                                                                                                Total equity 
                                         Share                   Translation      Retained      attributable 
                                       capital    Share premium      reserve      earnings         to owners 
                                         $'000            $'000        $'000         $'000             $'000 
 
Balance as at 1 July 2019                  123            4,202           10       (4,203)               132 
                                     ---------  ---------------  -----------  ------------  ---------------- 
Total comprehensive loss for 
 the half-year 
 Profit / (Loss) for the half-year           -                -            -         5,404             5,404 
Other comprehensive loss                     -                -        (391)           259             (132) 
                                     ---------  ---------------  -----------  ------------  ---------------- 
Total comprehensive profit 
 / (loss) for the half-year                  -                -        (391)         5,653             5,262 
                                     ---------  ---------------  -----------  ------------  ---------------- 
Transactions with owners in 
 their capacity as owners 
Shares issued                               55              187            -             -               242 
Share options issued                         -                -            -             5                 5 
                                     ---------  ---------------  -----------  ------------  ---------------- 
Total transactions with owners              55              187            -             5               246 
Balance at 31 December 2019                178            4,389        (381)         1,465             5,651 
                                     =========  ===============  ===========  ============  ================ 
 
 
  Balance as at 1 July 2018                102            2,844            7       (2,690)               263 
                                     ---------  ---------------  -----------  ------------  ---------------- 
Total comprehensive loss for 
 the half-year 
 Loss for the half-year                      -                -            -         (744)             (744) 
Other comprehensive loss                     -                -         (32)             -              (32) 
                                     ---------  ---------------  -----------  ------------  ---------------- 
Total comprehensive loss for 
 the half-year                               -                -         (32)         (744)             (776) 
Transactions with owners in 
 their capacity as owners 
Shares issued (Restated)                    20            1,320            -             -             1,340 
Shares options issued                        -                -            -           121               121 
                                     ---------  ---------------  -----------  ------------  ---------------- 
Total transactions with owner               20            1,320            -           121             1,461 
 
Restated Balance at 31 December 
 2018                                      122            4,164         (25)       (3,313)               948 
                                     =========  ===============  ===========  ============  ================ 
Total comprehensive loss for 
 the half-year 
 Loss for the half-year                      -                -            -         (938)             (938) 
Other comprehensive income                   -                -           35             -                35 
                                     =========  ===============  ===========  ============  ================ 
Total comprehensive loss for 
 the half-year                               -                -           35         (938)             (903) 
Transactions with owners in 
 their capacity as owners 
 Shares issued                               1               38            -             -                39 
Shares options issued                        -                -            -            48                48 
                                     ---------  ---------------  -----------  ------------  ---------------- 
Total transactions with owners               1               38            -            48                87 
Balance at 30 June 2019                    123            4,202           10       (4,203)               132 
                                     =========  ===============  ===========  ============  ================ 
 

CONDENSED UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHSED 31 DECEMBER 2019

 
                                                     Unaudited      Unaudited    Audited 
                                                   31 December    31 December    30 June 
                                                          2019           2018       2019 
 Cash flows from operating activities                    $'000          $'000      $'000 
 Profit / (Loss) before Tax from continuing 
  operations                                             (873)          (701)    (1,594) 
 Profit / (Loss) before Tax from discontinued 
  operations                                             6,277           (43)       (88) 
                                                 -------------  -------------  --------- 
                                                         5,404          (744)    (1,682) 
 
 Add back: depreciation                                      -              1          2 
 Non-cash shares received on disposal                  (3,987)              -          - 
  of subsidiary 
 Non-cash currency translation differences               (360)              -          - 
  arising on translation of equity investments 
 Non cash exchange differences reclassified              (259)              -          - 
  on disposal of foreign operations 
 Non-cash share option charge                              187            121        169 
 Non-cash shares issued in lieu of fees                      4              -         96 
 Share of losses in associate                              266              -          - 
 Decrease/(increase) in other receivables              (1,529)           (22)          - 
 (Decrease)/increase in trade and other 
  payables                                               (557)             95        535 
 Net cash outflow from operating activities              (830)          (549)      (880) 
                                                 -------------  -------------  --------- 
 
 Investing activities 
 Development of exploration and evaluation 
  assets                                                 (179)          (239)      (477) 
 Purchase of plant, property and equipment                 (2)              -          - 
 Purchase of shares in investment                        (100)              -          - 
 Net cash outflow from investing activities              (281)          (239)      (477) 
                                                 -------------  -------------  --------- 
 
 Financing activities 
 Share capital issue                                        55          1,496      1,496 
 Cost of issuing share capital                               -          (156)      (213) 
 Cash proceeds received on disposal                      1,326              -          - 
  of subsidiary 
 Increase in related party borrowings                        2              -          4 
 Net cash from financing activities                      1,383          1,340      1,287 
                                                 -------------  -------------  --------- 
 
 Net movement in cash and cash equivalents                 271            552       (70) 
                                                 -------------  -------------  --------- 
 Cash and cash equivalents at beginning 
  of period                                                117            198        198 
 Movements in foreign exchange                            (61)           (32)          2 
 Cash and cash equivalents reclassified 
  as assets available for sale (discontinued 
  operation)                                                 -              -       (13) 
 Cash and cash equivalents at end of 
  period                                                   327            718        117 
                                                 =============  =============  ========= 
 

NOTES TO THE UNAUDITED FINANCIAL INFORMATION

FOR THE SIX MONTHSED 31 DECEMBER 2019

   1.    General Information 

The Company is a public limited company limited by shares, incorporated in England and Wales on 30 June 2015 with the registration number 09663756 and with its registered office at 20 North Audley Street, London W1K 6WE. The Company's principal activities are the exploration and development of mining assets in Brazil.

   2.    Accounting Policies 

Basis of preparation

The interim unaudited financial information for the period ended 31 December 2019 has been prepared in accordance with IAS 34 Interim Financial Reporting. The results for the period ended 31 December 2019 are unaudited.

The condensed unaudited consolidated financial information for the period ended 31 December 2019 has been prepared on a basis consistent with, and on the basis of, the accounting policies set out in the financial information in the Company's published results for the year to 30 June 2019. The unaudited interim financial statements of the Company have been prepared on the basis of the accounting policies, presentation, methods of computation and estimation techniques expected to be adopted in the financial information by the Company in preparing its annual report for the year ended 30 June 2020.

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

Changes in accounting principles and adoption of new and revised standards

In the period ended 31 December 2019, the Directors have reviewed all the new and revised Standards. The only relevant new standard that is effective for this year's financial statements is IFRS 16 "Leases", but this does not have a material impact on the financial statements.

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

Going concern

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

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

Financial assets

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

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

Financial liabilities

Financial liabilities include the other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

Exploration and evaluation assets

Exploration and evaluation assets represent the costs of pre-feasibility studies, field costs, government fees and the associated support costs at the Group's Pitmobeiras project and formerly the Pedra Branca Platinum Group Metal project.

Costs incurred prior to obtaining the legal rights to explore an area are expensed immediately to the Statements of Profit or Loss and Other Comprehensive Income. Only material expenditures incurred after the acquisition of a license interest are capitalised. Historically, the expenditures related to exploration and evaluation have not been material, as the Company is active in areas where there are minimal and immaterial exploration and evaluation costs and therefore the costs in previous years have been expensed.

Interests in associates

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

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

   3.    Critical accounting estimates and judgements 

The Company makes certain estimates and assumptions regarding the future. Judgements, estimates and assumptions are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Judgements

As discussed in Note 2 there exists a material uncertainty which may cast significant doubt about the Group and Company's ability to continue as a going concern. Given the proceeds from the sale of the Pedra Branca project and based on the Company's planned expenditure on the Pitombeiras vanadium deposit and the Company's working capital requirements, the Directors have a reasonable expectation that the Company will have adequate resources to meet its capital requirements for the foreseeable future.

The Directors have considered the criteria of IFRS 6 regarding the impairment of exploration and evaluation assets and have decided based on this assessment that there is no basis to impair the carrying value of its exploration assets for the Pitmobeiras project (2019: $179,000, 2018: $nil) at this time.

Estimates and assumptions

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

The Company measures share options at fair value. For more detailed information in relation to the fair value measurement of such items, please refer to Note 13.

   4.    Segment information 

The Company evaluates segmental performance on the basis of profit or loss from operations calculated in accordance with IFRS 8. In the Directors' opinion, the Group only operates in one segment: mining services. All non-current assets have been generated in Brazil.

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

   5.    Tax expense 
 
                         Six months ended             Six months ended             Year ended 
                         31 December 2019             31 December 2018             30 June 2019 
                         Continuing    Discontinued   Continuing    Discontinued   Continuing    Discontinued 
                          operations    operations     operations    operations     operations    operations 
                         $'000         $'000          $'000         $'000          $'000         $'000 
 
 Profit / (Loss) 
  on ordinary 
  activities 
  before tax             (873)         6,277          (701)         (43)           (1,594)       (88) 
                        ------------  -------------  ------------  -------------  ------------  ------------- 
 
 Loss on ordinary 
  activities 
  multiplied 
  by standard 
  rate of corporation 
  tax in the 
  UK of 19% 
  (2018: 19%)            (166)         1,193          (133)         (8)            (303)         (17) 
 
 Effects of: 
 Recognition 
  of previously 
  unrecognised 
  tax losses             166           -              -             -              -             - 
 Unrelieved 
  tax losses 
  for the period 
  carried forward        -             (1,193)        133           8              303           17 
 
 Total tax 
  charge for 
  the period 
  on continuing 
  operations             -             -              -             -              -             - 
                        ============  =============  ============  =============  ============  ============= 
 
 

Factors that may affect future tax charges

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

 
      6. Earnings per share 
                           Six months ended 31 December         Six months ended 31 December                   Year ended 30 June 2019 
                                                   2019                                 2018 
                      Continuing   Discontinued   Total   Continuing   Discontinued    Total   Continuing   Discontinued         Total 
                      operations     operations           operations     operations            operations     operations 
                                                          (Restated)     (Restated) 
                           $'000          $'000   $'000        $'000          $'000    $'000        $'000          $'000         $'000 
 
       Profit / 
        (Loss) for 
        the year           (873)          6,277   5,404        (701)           (43)    (744)      (1,594)           (88)       (1,682) 
 
 
                                                   2019                                 2018                                      2019 
 
       Weighted 
        average 
        number 
        of shares 
        (basic)                             237,655,901                          213,619,678                               224,270,445 
                     ===========  =====================  ===========  ======================  ===========  =============  ============ 
 
 
       Loss per 
        share - 
        basic 
        (US 'cents)       (0.37)           2.64    2.27       (0.33)         (0.02)   (0.35)       (0.71)         (0.04)        (0.75) 
                     ===========  =============  ======  ===========  =============  =======  ===========  =============  ============ 
 
 
 
       Weighted 
        average number 
        of shares 
        (diluted)                     237,655,901                213,619,678                     224,270,445 
                          =======  ==============  =======  ================  =======  =======  ============ 
 
 
       Loss per 
        share - diluted 
        (US 'cents)        (0.37)    2.64    2.27   (0.33)   (0.02)   (0.35)   (0.71)   (0.04)        (0.75) 
                          =======  ======  ======  =======  =======  =======  =======  =======  ============ 
 

There have been no transactions involving ordinary shares or potential ordinary shares that would significantly change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the date of completion of these financial statements.

 
      7. Discontinued operations 
 

On 14 August 2019, the Company completed the disposal of Pedra Branca do Brasil Mineracao S/A ('Pedra Branca') to ValOre Metals Corp ('ValOre' or the 'Purchaser') pursuant to the share purchase agreement dated 16 July 2019 ('Share Purchase Agreement'). The subsidiary was reported in the annual report for the year ended 30 June 2019 as a discontinued operation.

Financial information relating to the discontinued operation for the period to the date of disposal is set out below.

(a) Consideration received or receivable

The financial performance and cash flow information presented reflects the operations for the period ending 14 August 2019.

 
                                                                              Period ended   Period ended   Year ended 
                                                                              31 December    31 December    30 June 
                                                                              2019           2018           2019 
                                                                              $'000          $'000          $'000 
 
 Cash Consideration                                                           2,272          -              - 
 Initial Consideration Shares in the Purchaser, ValOre Metals Corp, 
 totalling 22,000,000 common 
 shares                                                                       3,987          -              - 
 Fair value of Deferred Consideration Shares in the Purchaser, totalling 
  3,000,000 common shares                                                     764 
                                                                             -------------  -------------  ----------- 
 Total disposal consideration                                                 7,023 
 Less: Deficiency in assets disposed of                                       500 
 Add: Share of loss to disposal                                               (22) 
 Less: Write off of debts owed                                                (1,224) 
                                                                             -------------  -------------  ----------- 
 Gain on disposal before income tax                                           6,277 
 Income tax expense                                                           - 
                                                                             -------------  -------------  ----------- 
 Gain on disposal before income tax                                           6,277 
                                                                             =============  =============  =========== 
 

The Company received the final cash payment of C$1,000,000 and 500,000 Deferred Consideration Shares on 10 February 2020. The Company is due to receive the remaining 2,500,000 ValOre common shares over the next 2.5 years (Deferred Consideration Shares). As at 31 December 2019 the fair value of the Deferred Consideration Shares was determined to be $764,000.

(b) Financial performance and cash flow information

The financial performance and cash flow information presented reflects the operations for the period ending 14 August 2019.

 
                                                       Period ended   Period ended   Year ended 
                                                       14 August      31 December    30 June 
                                                       2019           2018           2019 
 Financial performance from discontinued operations    $'000          $'000          $'000 
 
 Expenses                                              (21)           (43)           (88) 
                                                      -------------  -------------  ----------- 
 Loss before tax from discontinued operations          (21)           (43)           (88) 
 Tax                                                   -              -              - 
                                                      -------------  -------------  ----------- 
 Loss for the period from discontinued operations      (21)           (43)           (88) 
                                                      =============  =============  =========== 
 

(b) Financial performance and cash flow information (continued)

 
                                             Period ended   Period ended   Year ended 
                                             14 August      31 December    30 June 
                                             2019           2018           2019 
 Cash flows from discontinued operation      $'000          $'000          $'000 
 Net cash flows from operating activities    (9)            6              (77) 
 Net cash flows from investing activities    (31)           (239)          (477) 
 Net cash flows from financing activities    -              340            563 
 Net cash flow inflow / (outflow)            (40)           106            9 
                                            =============  =============  =========== 
 
   (c)   Net assets as at date of sale 

The carrying amounts of assets and liabilities as at the date of sale on 14 August 2019 were:

 
                                                                 14 August   31 December   30 June 
                                                                 2019        2018          2019 
                                                                 $'000       $'000         $'000 
 
 Assets 
 Exploration and evaluation assets                               754         563           761 
 Property, plant and equipment                                   2           3             2 
 Trade and receivables                                           6           6             7 
 Cash and cash equivalents                                       -           84            13 
                                                                ----------  ------------  -------- 
 Assets held for sale                                            762         656           782 
 
 Liabilities 
 Trade payables                                                  23          52            11 
 Loans and borrowings                                            1,224       844           ,194 
 Accruals and other payables                                     11          8             11 
                                                                ----------  ------------  -------- 
 Liabilities directly associated with assets held for sale       1,259       904           1,216 
 
 Deficiency in assets directly associated with disposal group    (500)       (248)         (434) 
                                                                ==========  ============  ======== 
 
   8.    Exploration & evaluation assets 

Exploration and evaluation assets represent the costs of pre-feasibility studies, field costs, government fees and the associated support costs at the Group's Pitombeiras West vanadium deposit project.

   9.    Investments 
 
                                  Six months     Six months     Year ended 
                                   ended          ended          30 June 
                                   31 December    31 December    2019 
                                   2019           2018 
                                  $'000          $'000          $'000 
 
 Equity securities                100            -              - 
 Carrying amount of investments   100            -              - 
                                 =============  =============  =========== 
 

On 3 October 2019, the Company acquired shares in the share capital of Fodere Titanium Limited for $100,000 (2018: $nil). Fodere Titanium Limited is a United Kingdom registered minerals technology company which has developed innovative processes for the titanium, vanadium, iron and steel industries.

10. Investments in associates

 
                                   Six months     Six months     Year ended 
                                    ended          ended          30 June 
                                    31 December    31 December    2019 
                                    2019           2018 
                                   $'000          $'000          $'000 
 
 Cost of investment in ValOre      3,987          -              - 
  Metals Corp 
 Share of losses from continuing   (266)          -              - 
  operations 
                                  -------------  -------------  ----------- 
 Carrying amount of interest in    3,721          -              - 
  associate 
                                  =============  =============  =========== 
 

On 14 August 2019 pursuant to the Share Purchase Agreement following the completion of the disposal of Pedra Branca to ValOre, the Company received the initial Consideration Shares in ValOre, totalling 22,000,000 common shares, equating to the Company owning 26 percent of ValOre's then enlarged share capital.

Post period end, the Company will also receive Deferred Consideration Shares in ValOre pursuant to the Share Purchase Agreement totalling 3,000,000 payable in six equal tranches of 500,000 each tranche, commencing on the date falling six months after Completion and ending on the date falling thirty-six months after Completion.

Refer to Note 7 for more information relating to the disposal of Pedra Branca.

ValOre is a Vancouver based company with a portfolio of high-quality uranium and precious metal exploration projects in Canada and Brazil that is listed on the Toronto Stock Exchange ("TSX") Venture Exchange.

11. Other receivables

Other receivables includes deferred income totalling $1,260,000 relating to the disposal of Pedra Branca as follows:

(a) final tranche of the cash consideration of $765,000 (CAD$1,000,000) due on, or before, 6 months after completion; and

(b) 3,000,000 Deferred Consideration Shares in ValOre with fair value determined to be $495,000 at balance date.

The cash consideration and 500,000 Deferred Consideration Shares in ValOre were received on 6 February 2020. Refer to Notes 7 and 10 for more information relating to the disposal of Pedra Branca.

12. Share capital

 
                                                    Six months ended 
                           Six months ended          31 December 2018        Year ended 
                            31 December 2019         (restated)               30 June 2019 
                                         Share                    Share                    Share 
                           Issued         Capital   Issued         Capital   Issued         Capital 
                           Number        $'000      Number        $'000      Number        $'000 
 
 At beginning of period 
  ordinary shares of 
  0.04p each:              237,315,053   123        197,515,600   102        197,515,600   102 
                          ============  =========  ============  =========  ============  ========= 
 
 3 October 2018: shares 
  Issued as part of 
  placement                -             -          38,273,328    20         38,273,328    20 
 
 25 April 2019: share 
  issue in lieu of 
  fees                     -             -          -             -          1,526,125     1 
 
 12 December 2019: 
  share issue in lieu 
  of fees                  4,798,091     3          -             -          -             - 
 
 At end of period: 
  ordinary shares of 
  0.04p each:              242,113,144   126        235,788,928   122        237,315,053   123 
                          ============  =========  ============  =========  ============  ========= 
 
 

Ordinary shares

Ordinary shares have the right to receive dividends as declared and, in the event of a winding up of the Company, to participate in the proceeds from sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the Company.

13. Share options and warrants

 
                 Six months ended                                                                                               Six months ended                                                                                               Year ended 
                  31 December 2019                                                                                               31 December 2018                                                                                               30 June 2019 
                 Average                                                    Number                                              Average                                                    Number                                              Average                                                    Number 
                  exercise                                                   of options                                          exercise                                                   of options                                          exercise                                                   of options 
                  price per                                                  and warrants                                        price per                                                  and warrants                                        price per 
                  share option                                                                                                   share option                                                                                                   share option 
                  $                                                                                                              $                                                                                                              $ 
 At 30 June                                                                                                       50,249,996                                                       0.065                        15,250,000                                                                        0.065                                                      15,250,000 
 
 Warrants 
  issued 
  15 October 
  2018           -                                                          -                                                   0.079                                                      34,999,996                                          0.079                                                      34,999,996 
 
 Warrants 
  issued 
  12 December 
  2019           0.079                                                      4,798,091                                           -                                                          -                                                   -                                                          - 
 
 Expired and 
  surrendered 
  share 
  options        0.065                                                      (15,250,000)                                        -                                                          -                                                   -                                                          - 
 
 Share options 
  issued 6 
  December 
  2019                                                              0.026   9,000,000                                                                                         -                                                  -                                                           -                                                  - 
                ---------------------------------------------------------  --------------------------------------------------  ---------------------------------------------------------  --------------------------------------------------  ---------------------------------------------------------  -------------------------------------------------------------- 
 At 31 
  December                                                                                                        48,798,087                                                                                                     50,249,996                                                                                                     50,249,996 
                ---------------------------------------------------------  --------------------------------------------------  ---------------------------------------------------------  --------------------------------------------------  ---------------------------------------------------------  -------------------------------------------------------------- 
 
  Vested and 
   exercisable 
   at 31 
   December                                                    0.026                                                9,000,000                                                 0.065                                                7,625,000                                                 0.065                                                7,625,000 
                =========================================================  ==================================================  =========================================================  ==================================================  =========================================================  ============================================================== 
 
 
 

In December 2019, as part of the new award of the Director/Consultant Options, all of the individuals concerned, together with the other Directors of the Company who were not receiving new share options surrendered their existing holdings of share options, which in total aggregated 8,000,000 share options. These share options were awarded at the time of the Company's IPO on AIM in June 2017, with an exercise price of 5 pence per share option (6.5 US cents), and an expiry date of 31 December 2019. All other options currently outstanding in the Company, which in total aggregated 7,250,000, were on the same terms and expired unexercised on 31 December 2019.

Share warrants outstanding at the end of the period have the following expiry date and exercise prices:

 
                                   Exercise   Share warrants   Share warrants 
                                    price      31 December      31 December 
 Grant date         Expiry date     $          2019             2018 
 
                    15 October 
 15 October 2018     2020          0.079      34,999,996       34,999,996 
 12 December        15 October 
  2019               2020          0.079      4,798,091 
 

The warrants were valued using the Black Scholes Model with inputs noted in the above table and further inputs as follows:

 
 Input                        15 October 2018    12 December 2019 
                               grant              grant 
 
 Consideration                Nil                Nil 
 Terms                        Vested warrants    Vested warrants 
                               are exercisable    are exercisable 
                               for a period of    during the period 
                               two years after    to 15 October 2020 
                               the grant date 
 Expiry date                  15 October 2020    15 October 2020 
 Share price at grant         2.58 pence         1.70 pence 
  date 
 Expected price volatility 
  of the Company's 
  shares                      50%                50% 
 Risk-free interest 
  rate                        2.0%               2.0% 
 

Share options granted during the half year ended 31 December 2019 have the following expiry date and exercise prices:

 
 Grant date          Expiry date    Exercise   Share options   Share options 
                                     price      31 December     31 December 
                                     $          2019            2018 
 
                     31 December 
  6 December 2019     2024          0.026      9,000,000       - 
 
 

The fair value at grant date is independently determined using an adjusted form of the Black Scholes Model that takes into account the exercise price, the term of the option, the impact of dilution (where material), the share price at grant date and expected price volatility of the underlying share, the expected dividend yield, the risk free interest rate for the term of the option and the correlations and volatilities of the peer group companies. In addition to the inputs in the table above, further inputs as follows:

The model inputs for options granted during the period included:

(a) options are granted for no consideration and vested options are exercisable for a period of five years after the grant date: 6 December 2019.

(b) expiry date: 31 December 2024.

   (c)   share price at grant date: 1.75 pence. 

(d) expected price volatility of the company's shares: 50%.

(e) risk-free interest rate: 1.0%.

14. Related Party Transactions

During the period the Company entered into the following transactions with related parties:

 
                                            Six months    Six months 
                                             ended         ended        Year ended 
                                            31 December   31 December   30 June 
                                            2019          2018          2019 
                                            $'000         $'000         $'000 
 Garrison Capital Partners Limited: 
 Purchases made on Company's behalf 
  and administrative fees expensed 
  during the year                           55            34            114 
 Interest charge included within 
  Company and Group borrowings              2             -             4 
 Lauren McMaster 
 Consultancy services                       4             -             15 
 
 FFA Legal Ltda 
 Legal and accountancy services expensed    41            -             79 
 
 Harvest Minerals Limited 
 Employment services reimbursed             -             (69)          (104) 
                                           ------------  ------------  ----------- 
 

Garrison Capital Partners Limited is a related party to the company due to having a director in common. At the period end, it was owed $nil (2018: $nil).

Lauren McMaster is a related party to the Company due to being married to the Chairman. At the period end, the amount owed was $nil (2018: $24,000).

FFA Legal Ltda is a related party to the Group due to having a director in common with Group companies. At the period end it was owed $nil (2018: $nil).

15. Subsequent Events

a) On 3 February 2020, Brian McMaster and Luis Azevedo purchased 1,400,000 existing Ordinary Shares of GBP0.0004 each in the Company at an average price of 1.8 pence per Ordinary Share purchased. Following the purchase, the beneficial interest increased to:

 
                          No. of 
                           ordinary 
                           shares      % of share 
                           held         capital 
 Directors' interests: 
 
 Brian McMaster           55,244,467   23.3% 
 Luis Azevedo             54,066,667   22.8% 
 

b) On 10 February 2020, the Company received the final payment from ValOre due under the Pedra Branca Share Purchase Agreement of CAD$1,000,000 (US$0.765 million as at 31 December 2019). The Company also received 500,000 Deferred Consideration Shares from ValOre, being the first instalment due under the terms of the Share Purchase Agreement. Refer to Notes 7 and 10 for information relating to the disposal of Pedra Branca.

16. Nature of Financial Information

The unaudited consolidated interim financial information presented above does not constitute statutory financial statements for the period under review.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

**S**

For further information please visit www.jangadamines.com or contact:

 
 Jangada Mines plc         Brian McMaster (Chairman)   Tel: +44 (0) 20 7317 
                                                        6629 
 
 Strand Hanson Limited     James Spinney               Tel: +44 (0)20 7409 
  (Nominated & Financial    Ritchie Balmer              3494 
  Adviser)                  Jack Botros 
 
 Brandon Hill Capital      Jonathan Evans              Tel: +44 (0)20 3463 
  (Broker)                  Oliver Stansfield           5000 
 
 St Brides Partners        Charlotte Page              Tel: +44 (0)20 7236 
  Ltd                       Beth Melluish               1177 
  (Financial PR) 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR SDLSUFESSESD

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