TIDMJLP
RNS Number : 3997T
Jubilee Metals Group PLC
14 November 2019
Jubilee Metals Group Plc
Registration number (4459850)
Altx share code: JBL
AIM share code: JLP
ISIN: GB0031852162
14 November 2019
Jubilee Metals Group Plc
("Jubilee" or the "Company")
Audited results for the year ended 30 June 2019
Notice of Annual General Meeting
Jubilee, the AIM and Altx traded metals processing company is
pleased to announce its audited results for the year ended 30 June
2019.
FINANCIAL HIGHLIGHTS
-- Group revenue for the year increased by a strong 66.83%, to
GBP 23.59 million (ZAR(1) 432.61 million) [2018: GBP 14.14 million
(ZAR 245.53 million)]
-- In 2019, the Group delivered positive earnings of GBP 7.00
million (ZAR 128.28 million) [(2018: loss of GBP 2.11 million (ZAR
36.72 million)] and a return on equity of 10.50%, compared to a
negative return of 3.67% in the previous year
-- In 2019, the Group delivered positive earnings per share of
0.48 pence per share (ZAR 8.75 cents) [(2018: loss of 0.18 pence
(ZAR 3.05 cents)]
-- Total project attributable earnings almost doubled to GBP
9.87 million (ZAR 181.03 million) [2018: GBP 5.03 million (ZAR
86.80 million)]
-- The Group posted an operating profit up significantly to GBP
4.87 million (ZAR 89.38 million) [2018: profit of GBP 0.06 million
(ZAR 1.04 million)], with an operating margin of 20.64%
-- The Group's balance sheet strengthened substantially, with
total assets increasing by 47%, to GBP102.04 million (ZAR1.82
billion)
-- Total equity increased to GBP 78.69 million (ZAR 1.40
billion), from GBP 58.80 million (ZAR 1.07 billion) a year earlier,
maintaining a strong equity ratio of 77.11% (2018: 84.64%)
-- The Group delivered strong cash flows from its operating
activities of GBP 4.76 million (ZAR 84.79 million) [(2018: positive
cash flow of GBP 0.96 million (ZAR 17.44 million)], with Cash and
cash equivalents tripling from the previous year, to GBP 18.9
million
-- Overall, the Group's gearing remains low with the positive
net debt position and current assets covering a comprehensive
126.74% (2018: 106.96%) of total short and long term
liabilities
1= for income statement purposes conversions are at the average
GBP: ZAR rates for the period under review and for balance sheet
purposes at the spot rate as at year end. All other conversions are
at rates at the time announced.
OPERATIONAL HIGHLIGHTS FOR THE PERIOD UNDER REVIEW
-- Inyoni PGM(2) Operations delivered a record production of 23
847 ounces (2018: 17 354 ounces) for the year, generating revenue
of GBP 14.90 million (ZAR 273.36 million) compared to GBP 9.52
million (ZAR 164.37 million) in the previous year
-- The newly acquired Windsor Chrome Operations delivered 149
272 tonnes of chrome concentrate since January 2019, generating
revenue of GBP 5.75 million (ZAR 105.48 million)
-- Windsor Chrome Operations was established by the execution of
a sale and purchase agreement through Jubilee's subsidiary Jubilee
Processing to acquire all of the chrome beneficiation assets
including plant, equipment, intellectual property and all rights to
the existing surface material estimated in excess of 1.8 million
tonnes owned by PlatCro and associated companies, for a combined
consideration of GBP 8.26 million (US$10.5 million). Jubilee's
subsidiary Windsor SA is the appointed operator of the Windsor
Chrome Operations.
-- DCM Fine Chrome Operations produced a total of 32 675 tonnes
of chrome concentrate (2018: 46 191 tonnes) for the year, with
additional revenue of GBP 2.09 million (ZAR 38.24 million) [(2018:
GBP 4.62 million (ZAR 80.05 million)]
-- Combined chrome performance of 181 947 tonnes of chrome
concentrate delivered generated revenue of GBP 7.84 million (ZAR
143.72 million) [(2018: GBP 4.62 million (ZAR 80.05 million)],
increasing the chrome operations contribution to one third of
Group's total revenues
2= 6 Element Platinum Group Metals (platinum, palladium,
rhodium, ruthenium, iridium + gold)
HIGHLIGHTS POST THE PERIOD UNDER REVIEW
-- The significant growth in earnings delivered during the
period under review continued on its steep growth trajectory
demonstrated by the jump in operational earnings to GBP 3.38
million delivered for the three month period July to September
2019, which equates to a 90% jump from the comparative period in
2018
-- This jump in earnings reflects only one full month of
production at the Windsor PGM Operations, which commenced
operations in late August 2019 and exceeded expectations by
delivering 5 337 PGM ounces for the month of September 2019 alone,
which is more than double that of the PGM ounces produced from the
Inyoni Operations
-- Jubilee has executed a share purchase agreement for the
acquisition of the Sable Zinc refinery in Kabwe Zambia. The
refinery is situated immediately adjacent to the large stock piles
of zinc, lead and vanadium that Jubilee has contracted from BMR
Group PLC. Jubilee executed the acquisition from two subsidiaries
of Glencore plc for a consideration of GBP 9.16 million (US$ 12
million) (ZAR 175.97 million)
-- Jubilee acquired 100% of the rights to PGM earnings from the
current and future tailings produced at Jubilee's Inyoni Operations
(previously Hernic) located in the Bushveld Complex, South Africa.
In addition to the current unprocessed 1.70 million tonnes of
historical tailings at the Hernic Operations and the 630 000 tonnes
of previously processed tailings, Jubilee has acquired the rights
to some 1.0 million tonnes of PGM rich material
-- Jubilee has acquired 100% of all further chrome rights to the
chrome contained in all of the historical tailings at Inyoni as
described above
CHIEF EXECUTIVE OFFICER'S OVERVIEW
Jubilee has continued on its positive growth trajectory,
delivering strong growth in earnings and operational performance
for the period under review. Group Revenue increased to GBP 23.59
million (ZAR 432.61 million), delivering positive Group earnings of
GBP 7.00 million (ZAR 128.28 million). Group operations produced
181 947 tonnes of chrome concentrate and 23 847 PGM ounces during
the period under review. This growth has been achieved as a result
of both the performance of the Company's flagship Inyoni Operations
(previously known as Hernic Operations) and the contributions from
new production facilities being brought on-line during the period
under review.
The Company's operations at the date of this announcement
expanded to include:
Period under review
-- Inyoni Operations (previously Hernic Operations) - a South
African based PGM and chrome beneficiation facility processing both
historical tailings, as well as on-going tailings produced by the
Hernic Operations (now owned by a subsidiary of one of the world's
largest ferrochrome producers). Inyoni holds a capacity to process
55 000 tonnes per month of feed material, producing both chrome and
PGM saleable concentrates. The transaction post the period under
review, has transformed the operation from a co-operation
processing agreement, to eventual full ownership, by Jubilee, of
all historical chrome and PGM tailings at Inyoni Operations.
-- Windsor Chrome Operations - a South African based chrome
beneficiation facility principally supplied by offtake agreements
with third party chrome ore suppliers. In addition, Windsor Chrome
has access to historical chrome tails produced under its previous
ownership. Windsor Chrome, which was acquired by Jubilee in January
2019, holds a capacity to process approximately 70 000 tonnes per
month of feed material.
-- Dilokong Chrome Mine Operations ("DCM") - a South African
based chrome beneficiation facility holding Jubilee's industry
leading fine chrome recovery process, with a design capacity to
process up to 30 000 tonnes per month of feed material. The project
was ramped up to commercial production levels in May 2019.
Post the period under review
-- Windsor PGM Operations - a South African based PGM recovery
joint venture ("JV"), with Northam Platinum's Eland Plant
operations. Under the JV, Windsor PGM has secured access to the PGM
recovery operations for the recovery of the PGMs contained in the
tailings produced by Windsor Chrome Operations. The JV has
significantly exceeded its target of processing 60 000 tonnes per
month of PGM containing feed since being brought on-line during
August 2019.
-- Integrated Kabwe Operations - a Zambian based multi metal
refining facility currently under construction, which includes
nearly 6.4 million tonnes of vanadium, zinc and lead containing
surface material and further supplemented by third party ore
supply.
-- Inyoni Operations - a South African based chrome and PGM
operation. As announced on 24 October and 5 November 2019, Jubilee
increased its scope at Inyoni through the acquisition of all PGM
and chrome rights contained in the historical tailings material.
Jubilee targets to accelerate the implementation of its successful
Fine Chrome solution at Inyoni to improve the chrome recovery. The
DCM Fine Chrome recovery plant has shown the potential to increase
chrome concentrate mass-yields by up to 21%. The combination of the
increased operational scope and the expanded chrome recovery
circuit, which now includes taking control of the feed supply to
our processing plant, offers Jubilee the opportunity to increase
both feed rates as well as improving chrome recoveries. This
combination holds the potential for Jubilee to increase its PGM
production to 2 700 PGM ounces per month while the expanded chrome
processing operation could produce up to a total of 500 000 tonnes
of recoverable chrome concentrate from the historical tailings
located at the Inyoni operation. The increased PGM ounce production
would equate to an approximate US$ 450 000 of additional revenue
per month with chrome offering a significant revenue boost to the
project with chrome concentrate CIF prices fluctuating over the
quarter between US$ 135 to US$ 157 per ton of chrome concentrate.
At current
operating margins, these additions to revenue have the potential
to add significantly to earnings.
Further projects in the pipeline include the DCM PGM Operations,
which targets the recovery the PGMs contained in the nearly 800 000
tonnes of tailings from the DCM Chrome Operations and the Tjate
Platinum Project, which is an underground PGM exploration asset
currently under review.
Jubilee has successfully expanded and diversified its earnings
base across metal groups and mining jurisdictions, targeting
surface material previously discarded or overlooked due to inherent
process inefficiencies in the mining industry. Jubilee has unlocked
significant value from these surface assets by leveraging its
in-house technical expertise and process development capabilities
to implement fit for purpose, cost effective, cutting edge process
solutions. Jubilee has incorporated a zero-effluent policy in its
processing designs, resulting in the natural rehabilitation of
these historical surface waste materials. The Company has a
distinct expansion plan aimed at utilising its team, diversifying
commodity and jurisdictional exposure to build cash flow and
maximise the international opportunity.
The increased global awareness and focus on mine tailings
globally continues to drive renewed interest from both governments
and corporates to decrease the global footprint of legacy mine
waste and reduce the environmental risk this poses. This creates
ideal opportunities for Jubilee to engage in mine waste reduction
through reprocessing, which meets local environmental obligations,
whilst also realising economic benefit.
The Company has successfully responded to the current challenges
and risks inherent to a metals processing business that also holds
an exploration asset and will continue to formulate preventative
risk management measures.
CHAIRMAN'S STATEMENT
Dear Shareholder,
This has been another fantastic period for Jubilee as we look to
build an industry leading international metal recovery business
focused on the treatment of surface tailings materials and primary
mineral ore generated from third party mining operations. Through
the successful implementation of a defined strategy, we have
significantly expanded Jubilee's operational, jurisdictional and
earnings footprint, which has resulted in a current portfolio of
five operations in South Africa and Zambia, a defined and valuable
metal inventory, exposure to a broad commodity basket that includes
PGMs, chrome, copper, lead, zinc, vanadium and cobalt and a sharp
swing from an operating loss to an operating profit to GBP 4.87
million.
We are a global leader with first mover advantage in a market
that is rapidly expanding due to the increasing awareness and
legislation, both from government and corporate mining entities,
driving the need to reduce mine waste exposure and the vast amount
of historic above ground material accumulated. With the
environmental obligations and the rising cost and difficulty of
mining, majors are, not only increasingly needing a waste treatment
solution, but viewing surface material as a potential source of
cash flow. However, they do not necessarily have the means nor
expertise to implement mine waste recovery projects; this is where
we step in. We turn potential waste liabilities into assets through
implementing our bespoke environmentally conscious metal recovery
solutions that ensure a zero-effluent policy. Importantly the
projects have defined reserves with the tonnage and a grade known
in advance, and don't have the expenses related to traditional
mining techniques. Our bespoke solutions have exceptionally low
capital intensity and operating costs which delivers robust
margins. The ability of our team is recognised, and we already have
a blue-chip industry partnership base including Mitsubishi,
Northam, Lonmin and Vedanta.
Drilling down on the operational front and underlining our
delivery capabilities, we continue to optimise and expand our
project portfolio. We now have inventory of GBP 1.66 million and
are actively looking to increase existing production and revenue
streams. Our South African chrome and PGM operations have seen
significant growth with a combination of productivity and
optimisation input and the addition of new operations. Importantly,
we were able to continue to produce an increase in earnings quarter
on quarter despite softer chrome prices.
In December 2018, we acquired a major chrome processing
operation, owned by PlatCro Minerals (Pty) Ltd (now Windsor SA
(Pty) Ltd) with an operational capacity to process up to 75 000
tonnes of chrome ore, offering the potential to boost our
operational cash flow. The acquisition, which included 1.8 million
tonnes of surface dump material containing chrome and platinum,
positions Jubilee in a pivotal position in the Western Bushveld,
South Africa, where it has easy access to material for treatment
from numerous nearby sources. Windsor SA is performing well and the
team has shown its ability to deliver strong results.
We are continually focused on innovation, which was clearly
demonstrated with the successful commissioning of the fine chrome
plant at our DCM Fine Chrome Operations. Through our conceptual
approach we targeted the recovery of fine chrome from existing mine
waste material, which had previously been considered to be
irrecoverable. Our fine chrome capability now has the potential to
be rolled out into the whole of the chrome industry and we expect
it to be applicable to other commodities where fine material has
been judged to be irrecoverable. The underlying test work, design
and implementation is an absolute credit to our research and
engineering team.
Underlining our ambition to expand, was taking our interest in
Kabwe up to 87.5%, which combined with a 29.01% shareholding gives
us a 91.13% beneficial interest and the commencement of discussions
to acquire the Sable Zinc Refinery, located near our tailings and
primary oxide ore. The acquisition of this plant will be beneficial
in many respects, including but not limited to: a reduced project
implementation time-line and project implementation risk, as well
as reduced capital expenditure against the acquisition of a major
refinery at a significant discount to new build. These events
represent transformational milestones in the Company's aspirations
and our plans in Zambia.
Market
During the initial part of the period under review chrome prices
were satisfactory and PGMs were somewhat depressed. However, at the
time of writing this report chrome prices retracted sharply but has
been offset by an improving PGM basket price buoyed in particular
by palladium and rhodium. These volatile metal prices show the
benefit of having a diversified commodity basket which has provided
us with considerable resilience in the face of varying
performances, ensuring that we continue to produce an overall
value.
Financial
Jubilee is now producing considerable cash, meeting its market
promises and delivering its development strategy. For the period we
reported earnings of 0.48 (2018: loss of 0.18) pence per ordinary
share. We delivered strong cash flows from operating activities of
GBP 4.76 million (2018: GBP 0.96 million), with cash and cash
equivalents tripling from year earlier, to GBP 18.9 million.
Outlook
This is a truly exciting time for Jubilee Metals. We are looking
at a number of acquisitions and cash accretive investments within
our portfolio, with a determination to continue the exceptional
growth shown during the financial year under review. We have a
robust project pipeline and acquisition opportunities to augment
our rapid growth strategy and believe our unique positioning,
technical knowhow and team will enable us to create significant
further value for shareholders.
We are mindful that growth and success can bring its own
problems and we review, on a routine basis, the risks against the
business. These risks are often outside our control and as such, we
are determined to position ourselves and work diligently on all
matters, which might not lead to an enhanced cash flow, but will
lead to security of tenure and community acceptance.
I conclude by thanking our Chief Executive, Leon Coetzer, who
has put in extreme effort over all fronts to achieve these results,
supported by an excellent team. I also welcome our newcomers in the
various disciplines, who I have no doubt will continue to drive
this Company onwards and upwards.
Colin Bird
Non-executive Chairman
GROUP ANNUAL FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE
2019
GROUP STATEMENT OF FINANCIAL POSITION
as at 30 June 2019 Group
2019 2018
GBPs GBPs
-------------------------------- ------------ ---------
Assets
Non-current assets
10 364
Property, plant and equipment 17 901 768 239
44 385
Intangible assets 46 937 992 596
Investments in associates 1 895 477 2 760 966
Other financial assets 5 709 324 509 229
--------------------------------- ------------ ---------
58 020
72 444 561 030
-------------------------------- ------------ ---------
Current assets
Inventories 1 660 691 1 306 000
Other financial assets - 424 753
Current tax receivable - 15 870
Trade and other receivables 9 071 729 3 293 938
Cash and cash equivalents 18 865 288 6 376 153
--------------------------------- ------------ ---------
11 416
29 597 708 714
-------------------------------- ------------ ---------
69 436
Total assets 102 042 269 744
--------------------------------- ------------ ---------
Equity and liabilities
Equity attributable to equity
holders of parent
94 065
Share capital and share premium 105 820 411 073
21 432
Reserves 22 319 022 114
(59 057
Accumulated loss (51 842 702) 860)
--------------------------------- ------------ ---------
56 439
72 296 731 327
Non-controlling interest 2 393 081 2 363 401
--------------------------------- ------------ ---------
58 802
78 689 812 728
-------------------------------- ------------ ---------
Liabilities
Non-current liabilities
Other financial liabilities 10 396 736 1 622 026
Deferred tax liability 6 018 620 5 065 422
--------------------------------- ------------ ---------
16 415 356 6 687 448
-------------------------------- ------------ ---------
Current liabilities
Other financial liabilities 2 272 459 1 448 664
Trade and other payables 4 664 642 2 497 904
--------------------------------- ------------ ---------
6 937 101 3 946 568
-------------------------------- ------------ ---------
10 634
Total liabilities 23 352 457 016
--------------------------------- ------------ ---------
69 436
Total equity and liabilities 102 042 269 744
--------------------------------- ------------ ---------
The financial statements were authorised for issue and approved
by the Board on 14 November 2019 and signed on its behalf by:
Leon Coetzer
Chief Executive Officer
Company number: 04459850
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 June 2019
Group
2019 2018
GBPs GBPs
-------------------------------------------- ----------- -----------
Continuing operations
Revenue 23 585 845 14 139 510
(10 709
Cost of sales 445) (8 672 325)
--------------------------------------------- ----------- -----------
Gross profit 12 876 400 5 467 185
Other income 385 000 9 227
Operating expenses (8 388 378) (5 416 827)
--------------------------------------------- ----------- -----------
Operating profit/(loss) 4 873 022 59 585
Investment revenue 30 058 25 586
Impairments 5 021 585 (804 357)
Finance costs (1 112 909) (1 375 732)
Share of loss from associates (895 489) (308 451)
--------------------------------------------- ----------- -----------
Profit/(loss) before taxation 7 946 267 (2 403 369)
Taxation (969 971) -
--------------------------------------------- ----------- -----------
Profit/(loss) for the year 6 976 296 (2 403 369)
Other comprehensive income:
Exchange differences on translating foreign
operations 679 636 (2 954 327)
--------------------------------------------- ----------- -----------
Total comprehensive income 7 655 932 (5 357 696)
--------------------------------------------- ----------- -----------
Basic loss for the year
Attributable to:
Owners of the parent 6 993 587 (2 114 713)
Non-controlling interest (17 291) (288 656)
--------------------------------------------- ----------- -----------
6 976 296 (2 403 369)
-------------------------------------------- ----------- -----------
Total comprehensive loss attributable to:
Owners of the parent 7 626 600 (4 892 637)
Non-controlling interest 29 332 (465 059)
--------------------------------------------- ----------- -----------
7 655 932 (5 357 696)
-------------------------------------------- ----------- -----------
Earnings/(loss) per share (pence) 0.48 (0.18)
--------------------------------------------- ----------- -----------
Diluted earnings/(loss) per share (pence) 0.47 (0.18)
--------------------------------------------- ----------- -----------
GROUP STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2019
Total
Share Foreign Share- attributable
capital currency based Convertible to equity Non-
Figures in and share translation Merger payment instrument Total Accumulated holders controlling Total
Sterling premium reserve reserve reserve reserve reserves loss of the Group interest equity
-------------- ----------- ------------ ----------- ---------- ------------ ------------ ------------- ------------- ------------ -----------
Balance at 1
July 2017 87 674 940 (1 442 540) 23 184 000 1 336 583 - 23 078 043 (57 261 760) 53 491 223 2 867 039 56 358 262
Changes in
equity
Total
comprehensive
income
for the year - (2 777 924) - - - (2 777 924) (2 114 713) (4 892 637) (465 059) (5 357 696)
Issue of share
capital net
of costs 7 258 327 - - - - - - 7 258 327 - 7 258 327
Warrants
issued (868 194) - - 868 194 - 868 194 - - - -
Options issued - - - 263 801 - 263 801 - 263 801 - 263 801
Changes in
ownership
interest
- control not
lost - - - - - - 318 612 318 612 (38 578) 280 034
----------- ------------ ----------- ---------- ------------ ------------ ------------- ------------- ------------ -----------
Total changes 6 390 133 (2 777 924) - 1 131 995 - (1 645 929) (1 796 101) 2 948 103 (503 637) 2 444 466
----------- ------------ ----------- ---------- ------------ ------------ ------------- ------------- ------------ -----------
Balance at 30
June 2018 94 065 073 (4 220 464) 23 184 000 2 468 578 - 21 432 112 (59 057 860) 56 439 327 2 363 401 58 802 728
----------- ------------ ----------- ---------- ------------ ------------ ------------- ------------- ------------ -----------
Changes in
equity
Total
comprehensive
income
for the year - 633 013 - - - 633 013 6 993 587 7 626 600 29 332 7 655 932
Issue of share
capital net
of costs 11 765 355 - - - - - - 11 765 355 - 11 765 355
Share warrants
issued (10 017) - - 231 593 - 231 593 - 221 575 - 221 575
Share warrants
expired - - - (180 736) - (180 736) 180 736 - - -
Equity
component of
convertible
loan note 203 040 203 040 - 203 040 - 203 040
Changes in
fair value -
control
not lost - - - - - - 40 835 - - 40 835
Changes in
ownership
interest
- control not
lost - - - - - - - - 348 348
----------- ------------ ----------- ---------- ------------ ------------ ------------- ------------- ------------ -----------
Total changes 11 755 338 633 013 - 50 857 203 040 886 908 7 215 159 19 857 405 29 680 19 887 085
----------- ------------ ----------- ---------- ------------ ------------ ------------- ------------- ------------ -----------
Balance at 30 105 820 (51 842
June 2019 411 (3 587 451) 23 184 000 2 519 435 203 040 22 319 022 702) 76 296 731 2 393 081 78 689 812
----------- ------------ ----------- ---------- ------------ ------------ ------------- ------------- ------------ -----------
GROUP STATEMENT OF CASH FLOWS
for the year ended 30 June 2019
Group
2019 2018
GBPs GBPs
------------------------------------------ ----------- -----------
Cash flows from operating activities
Cash used in operations 5 514 036 1 406 936
Interest income 30 058 25 586
Finance costs (787 390) (469 548)
------------------------------------------- ----------- -----------
Net cash from operating activities 4 756 704 962 974
------------------------------------------- ----------- -----------
Cash flows from investing activities
Purchase of property, plant and
equipment (4 496 478) (195 208)
Sale of property, plant and equipment 17 060 9 056
Purchase of intangible assets (2 181 981) (191 743)
Business combinations (6 826 281) -
Investment in associate - (500 000)
(Repayment)/receipt of loans 49 368 (841 087)
(13 438
Net cash from investing activities 312) (1 718 982)
------------------------------------------- ----------- -----------
Cash flows from financing activities
Net proceeds on share issues 10 671 831 4 252 950
Repayment of other financial liabilities (630 693) (3 518 298)
Proceeds from other financial liabilities 10 933 550 1 920 000
------------------------------------------- ----------- -----------
Net cash from financing activities 20 974 688 2 654 652
------------------------------------------- ----------- -----------
Total cash movement for the year 12 293 080 1 898 644
Total cash at the beginning of
the year 6 376 153 4 635 636
Effect of exchange rate movement
on cash balances 195 055 (158 127)
------------------------------------------- ----------- -----------
Total cash at end of the year 18 865 288 6 376 153
------------------------------------------- ----------- -----------
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF ACCOUNTING POLICIES
The Group and Company results for the year ended 30 June 2019
have been prepared using the accounting policies applied by the
Company in its 30 June 2018 annual report which are in accordance
with International Financial Reporting Standards (IFRS and IFRC
interpretations) issued by the International Accounting Standards
Board ("IASB") as adopted for use in the EU (IFRS, including the
SAICA financial reporting guides as issued by the Accounting
Practices Committee and the Companies Act 2006 (UK). They are
presented in Pound Sterling.
This financial report does not include all notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the annual report for the
year ended 30 June 2019 and any public announcements by Jubilee
after that date to the date of publication of these results.
All monetary information is presented in the functional currency
of the Company being Great British Pound. The Group's principal
accounting policies and assumptions have been applied consistently
over the current and prior comparative financial period. The
financial information for the year ended 30 June 2018 contained in
this report does not constitute statutory accounts as defined by
section 435 of the Companies Act 2006. A copy of the statutory
accounts for that year has been delivered to the Registrar of
Companies. The auditor's report on those accounts was unqualified
did not contain a statement under section 498(2)-(3) of the
Companies Act 2006.
2. FINANCIAL REVIEW
Jubilee delivers outstanding results for the period under
review. The Group reports revenue for the year of GBP 23.59
million, 66.81% up from the comparative period. Operating profit of
GBP 4.87 million compared to GBP 0.06 million for the comparative
period.
The Group achieved positive earnings per share of 0.48 pence per
share compared to a loss per share of 0.18 pence for the
comparative period. Return on equity reached 10.5% compared to a
negative return of 7.49% in the previous year. Total project
attributable earnings almost doubled to GBP 9.87 million.
The Group's balance sheet strengthened substantially, with total
assets increasing by 47%, to GBP102 million. Total equity increased
to GBP 78.60 million, from GBP 58.8 million a year earlier,
maintaining a strong equity ratio of 77.11% compared to 84.70% in
2018.
The Group delivered strong cash flows from operating activities
of GBP 4.76 million compared to GBP 0.96 million in the comparative
period.
3. DIVIDS
The Board did not declare any dividends for the period under
review. (2018: Nil)
4. AUDITOR'S REVIEW OPINION
These results have been audited by the Group's auditors, Saffery
Champness LLP and their report is available for inspection at the
Company's registered office. A copy of the report is also attached
to the back of this announcement as annexure 1.
5. BOARD
There were no changes to the Board during the period under
review.
6. SHARE CAPITAL AND SHARE PREMIUM
Group
2019 2018
GBPs GBPs
--------------------------------------------- ----------- -----------
Authorised
The share capital of the Company is divided
into an unlimited number of ordinary shares
of GBP0.01 each.
Issued share capital fully paid
Ordinary shares of GBP0.01 each 18 553 007 13 109 923
Share premium 87 267 404 80 955 150
----------- -----------
105 820
Total issued capital 411 94 065 073
----------- -----------
The Company issued the following shares during the period and up
to the date of this annual report:
Issue price
-
Date issued Number of shares pence Purpose
---------------------------- ---------------- ----------- -----------
Opening balance 1 310 992 791
14 December 2018 52 493 438 2.50 Acquisition
24 March 2019 491 814 444 2.25 Placing
Closing balance at year-end 1 855 300 673
----------------
The Company did not issue any shares after year-end to the date
of this report.
During the year cash transaction costs accounted for as a
deduction from the share premium account amounted to GBP 612 805
(2018: GBP 247 500).
WARRANTS
At year-end and at the last practicable date the Company had the
following warrants outstanding:
Share price
Issue at
Number price issue date
of warrants Issue date GBPs Expiry date Pence
------------ ---------- ------- ----------- -----------
27 777
780 2018-01-19 0.06120 2023-01-19 3.55
29 166
665 2018-01-19 0.06120 2023-01-19 3.55
5 555 555 2018-01-19 0.06120 2023-01-19 3.55
2 777 778 2018-01-19 0.06120 2023-01-19 3.55
19 417
476 2018-12-28 0.03863 2023-12-28 2.40
12 944
984 2018-12-28 0.03863 2023-12-28 2.40
1 473 055 2019-03-20 0.03380 2021-03-20 2.45
------------
99 113
293
------------
7. BUSINESS COMBINATIONS
Windsor Chrome Operations
On 10 December 2018 Jubilee announced that it has executed a
sale and purchase agreement to acquire all of the chrome
beneficiation assets including plant, equipment, intellectual
property and all rights to the existing surface material estimated
in excess of 1. 8 million tonnes ("Assets") owned by PlatCro
Minerals (Pty) Ltd ("PlatCro") and associated companies ("the
Target"), for a combined cost of GBP 8.26 million (US$10.5 million)
("the Acquisition"). The business was acquired free from any
historic liabilities.
The Assets acquired include:
-- Plant and equipment offering processing capacity in excess of
75 000 tonnes per month
-- All associated property including all rights to existing
surface material
-- All stock and materials accolated with operating the
business
The aggregate purchase price for the Acquisition was settled by
Jubilee on 7 January 2019. Jubilee took ownership and operational
control of the Target on 7 January 2019. The purchase price was
settled through a combination of own cash, debt and the issue of 52
493 438 new Jubilee shares ("Acquisition Shares") at a price of 2.5
pence per share. Of the total purchase price, a total of GBP 0.28
million is only payable upon completion of certain conditions
precedent to the Acquisition.
Fair value of the purchase consideration, net assets acquired
and gain on bargain purchase are as follows:
Group
2019
GBPs
Cash 6 826 281
Ordinary shares issued 1 183 202
Contingent consideration 280 001
8 289 484
The fair value of the 52 493 438 ordinary shares issued as part
of the consideration paid
was based on the published share price on 7 January 2019 of 2.5
pence per share. Issue
costs of GBP 59 175 directly attributable to the issue of the
shares have been netted against
the deemed proceeds.
The assets recognised as a result of the acquisition
are as follows:
Land 684 898
Buildings 637 954
Plant and machinery 3 678 512
Motor vehicles 574 565
----------------------------------------------------- ---------
Total property, plant and equipment 5 575 929
Intangible assets 1 441 709
Inventories 991 845
Net identifiable assets acquired
8 009 483
Contingent asset acquired(1) 280 001
Net assets acquired
8 289 484
1. The contingent asset acquired represents the purchase of the
issued shares of PlatCro for a consideration of GBP 280 001 which
is only payable upon the condition that PlatCro is able to
successfully renew its mining right with the DMR. At the date of
this report the mining right had not been renewed by the DMR.
There were no acquisitions in the previous period.
Revenue and profit contribution
The acquired assets contributed revenues of GBP 5.72 million and
attributable earnings of GBP 1.94 million to the Group for the
period from 7 January to 30 June 2019.
8. BUSINESS SEGMENTS
In the opinion of the Directors, the operations of the Group
companies comprise of four reporting segments being:
- the beneficiation of Platinum Group Metals ("PGMs"), chrome
and base metals and development of PGM smelters utilising exclusive
commercialisation rights of the ConRoast smelting process, located
in South Africa ("Base metals beneficiation");
- the evaluation of the reclamation and processing of sulphide
nickel tailings in Australia and the development and implementation
of process solutions, specifically targeting both liquid and solid
waste streams from mine processes ("Business Development");
- the exploration and mining of Platinum Group Metals ("PGMs") (Exploration and mining); and
- the parent company operates a head office based in the United Kingdom, which incurs certain administration and corporate costs. ("Corporate").
The Group's operations span six countries, South Africa,
Australia, Madagascar, Mauritius, Zambia and the United Kingdom.
There is no difference between the accounting policies applied in
the segment reporting and those applied in the Group financial
statements. Mauritius and Madagascar do not meet the qualitative
threshold under IFRS 8, consequently no separate reporting is
provided.
Segment report for the year ended 30 June 2019
Total
Base metals Business Exploration Continuing
beneficiation development and mining Corporate operations
GBPs GBPs GBPs GBPs GBPs
--------------------------- -------------- ------------ ------------ ------------- ---------------
Total revenues 23 585 846 - - - 23 585 846
(10 709
Cost of sales (10 709 444) - - - 444)
Forex losses (8 163) (6 711) - 246 226 231 352
Share of loss from
associate - - - (865 489) (865 489)
Interest received 21 802 - 207 8 050 30 059
Interest paid (933 307) - - (179 604) (1 112 911)
Loss before taxation 4 357 520 (229 145) (231 989) 4 049 881 7 946 266
Taxation ( 15 870) - - (954 101) (969 971)
Loss after taxation 4 341 649 (229 145) (231 989) 3 095 780 6 976 295
Depreciation, amortisation
and impairments (3 400 232) (70 359) (231 568) - (3 702 159)
-------------- ------------ ------------ ------------- -------------
(102 042
Total assets (43 389 556) (15 872 277) (25 885 711) (16 894 725) 269)
-------------- ------------ ------------ ------------- -------------
Total liabilities 15 602 932 3 343 970 1 398 627 3 006 927 23 352 457
-------------- ------------ ------------ ------------- -------------
Segment report for the year ended 30 June 2018
Total
Base metals Business Exploration Continuing
beneficiation development and mining Corporate operations
GBPs GBPs GBPs GBPs GBPs
--------------------------- --------------- ------------ ------------ ----------- --------------
Total revenues 14 139 570 - - - 14 139 570
(8 672
Cost of sales (8 672 325) - - - 325)
Forex losses (92 893) - - (27 500) (120 394)
Share of loss from
associate - - - (308 451) (308 451)
Interest received 22 526 - 263 2 797 25 586
(1 375
Interest paid (1 375 732) - - - 732)
(2 403
Loss before taxation (952 910) (348 840) (30 946) (1 070 671) 367)
Taxation - - - - -
(2 403
Loss after taxation (952 910) (348 840) (30 946) (1 070 671) 367)
Depreciation, amortisation (3 236
and impairments (2 898 310) (338 440) - - 750)
--------------- ------------ ------------ ----------- ------------
(25 555 (69 436
Total assets 593) (14 016 052) (25 325 043) (4 540 056) 744)
--------------- ------------ ------------ ----------- ------------
10 634
Total liabilities 5 393 954 3 305 224 1 376 573 558 265 016
--------------- ------------ ------------ ----------- ------------
9. GOING CONCERN
The financial position of the Group, its cash flows, liquidity
position are disclosed in the financial statements. Jubilee's
business strategy is based on three core business pillars:
1. Process business development
-- Consists of a combination of targeted process consulting and
business development, focused on the development and implementation
of process solutions, specifically targeting both liquid and solid
waste streams from mine processes.
-- Our business development includes existing pilot operations
as part of the process development cycle to provide mature
solutions which includes extractive-metallurgy, pyro-metallurgy and
hydro-metallurgy.
-- This process has led to many previously non-viable
environmental and metals recovery projects becoming commercially
viable. We have experienced a very strong demand in Africa.
2. Operations
Jubilee owns and operates recovery plants for the recovery of
metals and minerals, currently recovering precious metals including
PGMs and Chrome and targeting base metals including lead, zinc,
vanadium and copper.
3. Project Funding
Jubilee is able to provide funding to support its partners
within smaller or larger companies to implement the waste recovery
projects. The funding especially assists in instances where the
company holding the mineral right prefers to be a passive
investment partner.
Factors in support of the Group's treasury position are listed
below:
-- In March 2019 the Company successfully completed a placing of
491 814 444 new ordinary shares of 1 pence each in Jubilee at a
price of 2.25 pence (ZAR 43.22 cents) per share raising
approximately GBP 11.07 million before expenses (ZAR 212.57
million) (Conversion rates applicable on the date of the
announcement being 21 March 2019);
-- The Group's current operating projects are cash generative
and contributes to the treasury of the Group; and
-- The Group meets its day--to--day working capital requirements
through cash generated from operations. The Group's current
operational projects are all fully funded and self-sustaining.
The current global economic climate creates to some extent
uncertainty particularly over the trading price of metals and the
exchange rate fluctuation between the US$ and the ZAR and thus the
consequence for the cost of the company's raw materials as well as
the price at which the product can be sold. The Group's forecasts
and projections, taking account of reasonably possible changes in
trading performance, commodity prices and currency fluctuations,
indicates that the Group should be able to operate within the level
of its current cash flow earnings forecasted for the next twelve
months.
The Group is adequately funded and has access to further equity
placings, which together with contracts with a number of high
profile customers strengthens the Group's ability to meet its
day-to-day working capital requirements, including its capital
expenditure requirements. As a consequence, the directors believe
that the Group is suitably funded and placed to manage its business
risks successfully despite identified economic uncertainties.
The directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future, thus continuing to adopt the going concern
basis of accounting in preparing the annual financial
statements.
9. EVENTS AFTER THE REPORTING PERIOD
9.1 Acquisition of Sable Zinc Limited (Zambia)
As announced on 21 March 2019, Jubilee executed the acquisition
of 100% of the issued capital of Sable Zinc Kabwe Limited in Zambia
from two subsidiaries of Glencore plc "Glencore" for a
consideration of GBP 9.16 million (US$12 million) (ZAR 175.97
million) (the "Acquisition"). The Acquisition was funded through a
combination of debt and equity. Jubilee secured a convertible loan
note for GBP 6.11 million (US$ 8 million) (ZAR 117.31 million) with
ACAM LP and successfully completed a placing of 491 814 444 new
Jubilee shares at an issue price of 2.25 pence per share to raise
GBP 11.07 million (US$ 14.50 million) (ZAR 212.57 million) before
expenses.
On 23 August 2019 the Acquisition became unconditional ("Closing
Date"), Jubilee obtained control and commenced with the
implementation of a fully integrated multi-metal refinery in
Zambia.
The consideration for the Acquisition is payable in stages as
follows:
-- US$ 6 000 000 within 5 business days after fulfilment or
waiver of the conditions precedent to the share purchase agreement
("Closing Date");
-- US$ 3 000 000 on the earlier of the date falling 30 days
after the date of completion of the conversion of the Sable Zinc
Kabwe plant to a zinc processing plant and the date falling 6
months after the Closing Date ("Second Instalment"); and
-- US$ 3 000 000 on the earlier of the date falling 30 days
after the date of commencement of commercial production and the
date falling 6 months after the Second Instalment.
Jubilee's Kabwe Operations seeks to establish a fully integrated
metal recovery and refining operational footprint in Zambia. The
Project combines access to large surface material with the adjacent
multi-metal refining capability. The Kabwe Operations resource
comprises an estimated 6.4 million tonnes (3.2 million JORC
compliant) of surface assets containing 356 843 tonnes of zinc, 351
386 tonnes of lead and 1.26% equivalent vanadium pentoxide. This
excludes further third party sourced copper and zinc rich mined
material for further refining. The adjacent Sable Zinc Refinery
will be expanded to include a copper, zinc, vanadium and lead
refining circuit based on Jubilee's extensive process development
and optimisation works program. The Kabwe Operations will be
implemented over three phases as outlined below.
Phase 1: Upgrade and commissioning of the copper refining
circuit with a targeted capacity of 3 000
tonnes of refined copper per annum, targeting implementation
during Q4 2019;
Phase 2: Implementation of both the zinc and vanadium refinery
circuit with an initial targeted capacity of 8 000 tonnes per annum
of zinc contained in a high grade zinc concentrate suitable for
the
market and 1 500 tonnes per annum of vanadium pentoxide,
targeting commissioning of the
zinc and vanadium refinery circuit during Q2 2020; and
Phase 3: Implementation of the lead refining circuit with an
initial targeted capacity of 11 000 tonnes
per annum of lead contained in a high-grade concentrate during
Q2 2021.
The Kabwe Refinery process flowsheet offers flexibility with two
separated fully equipped electro-winning circuits able to produce
either high grade copper or zinc with only minor adjustments. The
Company can allocate this refining capacity either to both metals
individually or a combination of the two metals depending on the
prevailing market conditions to maximise returns. Prior to taking
ownership of the Sable Zinc Refinery, Jubilee actively pursued the
completion of the project design and initiating final equipment
selection to enable rapid implementation of the process
flowsheet.
9.2 Acquisition of signi-ficant tailings
Jubilee owns and operates a chrome and PGM processing facility
at Hernic with a processing capacity of 55 000 tonnes per month.
The facility currently produces up to 9 000 tonnes of saleable
chrome concentrate and 2 250 ounces of PGMs per month. Previously,
Jubilee had a Co-Operation Agreement ("Hernic Agreement") with
Hernic Ferrochrome (Pty) Ltd ("Hernic Ferrochrome"), whereby
Jubilee had the rights to all PGM earnings from the tailings at
Hernic until it secured a 30% return on investment, where after
Hernic secured the majority of earnings. Under the Hernic
Agreement, all of the chrome concentrate produced is returned to
Hernic Ferrochrome for its own use or sale to the market. As
announced on 24 October 2019, Jubilee has entered into a Framework
and Tailings Purchase Agreement ("Tailings Agreement") with
K2018239983 (SOUTH AFRICA) (PTY) LTD ("NewCo"), a subsidiary of one
of the world's largest ferrochrome producers to acquire 100% of the
rights to PGM earnings from the current and future tailings
produced at Jubilee's Inyoni Operations (previously Hernic) located
in the Bushveld Complex, South Africa. In addition to the current
unprocessed 1.70 million tonnes of historical tailings at the
Hernic Operations and the 630 000 tonnes of previously processed
tailings, Jubilee has acquired the rights to a further c. 1 million
tonnes of PGM rich material. The total consideration for all the
PGMs contained in the historical tailings is c. US$ 5.1 million and
will be settled from Jubilee's cash resources. Jubilee has also
entered into an exclusive agreement with NewCo whereby NewCo may
elect to include the sale of all further chrome rights to the
chrome contained in all of the current tailings at Hernic at a
predetermined value. The operations and assets of Hernic
Ferrochrome are being acquired by NewCo and following entering into
the Tailings Agreement with NewCo, the Hernic Agreement is
terminated with immediate effect.
As announced on 5 November 2019, NewCo has exercised its rights
in terms of the Exclusive Agreement announced on 24 October 2019,
to sell all further chrome rights to the chrome contained in all of
the historical tailings at Inyoni to Jubilee. Under the Exclusive
Agreement, Jubilee has acquired 100% of all further chrome rights
to the chrome contained in all of the historical tailings at
Inyoni. The total consideration for all the chrome contained in the
historical tailings is approximately US$ 16.39 million (at current
conversion rates), which will be majority funded from Jubilee's
existing cash and operating cash flows, together with project
funding as necessary. The total consideration will be settled in
three tranches, each 30 business days apart.
NOTICE OF ANNUAL GENERAL MEETING
The Company also hereby gives notice of its 2019 Annual General
Meeting, which will be held on 6 December 2019 at 11:00 am UK time
at Fladgate LLP, 16 Great Queen Street, London, WC2B 5DG to
transact the business as stated in the notice of Annual General
Meeting. The Group's Annual Report for the year ended 30 June 2019
has been posted to the website, www.jubileemetalsgroup.com, with
the notice of the Company's 2019 Annual General Meeting.
Shareholders are advised that the Notice of Annual General Meeting,
including a Form of Proxy, for the year ended 30 June 2019 has been
posted to Jubilee shareholders today, 14 November 2019.
*Ends*
14 November 2019
For further information visit www.jubileemetalsgroup.com, follow
Jubilee on Twitter (@Jubilee Metals) or contact:
Jubilee Metals Group PLC
Colin Bird/Leon Coetzer
Tel +44 (0) 20 7584 2155 / Tel +27 (0) 11 465 1913
Nominated Adviser - SPARK Advisory Partners Limited
Andrew Emmott/Vassil Kirtchev
Tel: +44 (0) 20 3368 3555
Broker - Shard Capital Partners LLP
Damon Heath/Erik Woolgar
Tel +44 (0) 20 7186 9900
Joint Broker - WHIreland
Harry Ansell/Katy Mitchell
Tel: +44 (0) 20 7220 1670/+44 (0) 113 394 6618
JSE Sponsor - Sasfin Capital (a member of the Sasfin group)
Sharon Owens
Tel +27 (0) 11 809 7500
PR & IR Adviser - St Brides Partners Limited
Catherine Leftley/ Beth Melluish
Tel +44 (0) 20 7236 1177
Annexure 1
Audit Opinion
We have audited the financial statements of Jubilee Metals Group
Plc for the year ended 30 June 2019 which comprise the Group and
Company Statements of Financial Position, the Group and Company
Statements of Comprehensive Income, the Group and Company
Statements of Changes in Equity, the Group and Company Statements
of Cash flows and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of the group's and of
the parent company's affairs as at 30 June 2019 and of the group
and parent company's profit for the period then ended;
-- have been properly prepared in accordance with IFRSs as
adopted by the European Union; and
-- have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
and the parent company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the
UK, including the FRC's Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you
where:
-- the directors' use of the going concern basis of accounting
in the preparation of the financial statements is not appropriate;
or
-- the directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the group's or the parent company's ability to continue
to adopt the going concern basis of accounting for a period of at
least twelve months from the date when the financial statements are
authorised for issue.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key Audit Matter How our audit addressed the key
audit matter
Carrying value of intangible
assets Our audit procedures included
The carrying value of the following:
intangible * Assessing whether the methodology used by the
assets included in the Group's Directors to calculate recoverable amounts complies
balance sheet at 30 June 2019 with IAS 36;
was stated as GBP46.9m,
contained
within 2 cash generating units * Assessing the viability of the platinum group
("CGUs"). elements ("PGE") exploration asset by analysing CGU
value in use cash flows and determining whether the
The Directors assess at each input assumptions are reasonable and supportable
reporting period end whether given the current macroeconomic climate;
there is any indication that
an asset may be impaired and
intangible assets with an * Performing sensitivity analysis on key assumptions
indefinite and testing the mathematical accuracy of models;
life must be tested for
impairment
on an annual basis. The * Challenging inputs to models including comparison
determination with external data sources;
of recoverable amount, being
the higher of value-in-use and
fair value less costs to * Reviewing correspondence and other sources for
dispose, evidence of impairment;
requires judgement on the part
of management in both
identifying * Reviewing the recoverability of intercompany loans
and then valuing the relevant within the parent company and indicators of
CGUs, especially for projects impairment in investments in subsidiaries;
where there is an uncertain
timeframe.
* Assessing the appropriateness and completeness of the
Deferred tax liabilities are related disclosures in note 9, intangible assets, of
recognised on certain the group financial statements; and
intangible
assets following business
combinations * Recalculating the deferred tax liability relating to
and these liabilities are specific intangible assets and assessing applicable
re-evaluated tax rates.
at each reporting period end.
Any impairment in these CGUs * Understanding the nature and basis of the recognition
could lead to consequent of new intangible assets relating to the Kabwe and
impairments Windsor operations.
of the parent company's
investments
in subsidiaries or
intercompany Based on our procedures, we noted
loans to these subsidiaries no material exceptions and considered
which at 30 June 2019 were management's key assumptions
carried to be within reasonable ranges.
at GBP36.9m and GBP52.4
respectively.
Due to the significance of the
intangible assets to the
consolidated
financial statements, the
significant
judgements involved in these
calculations and the potential
impact on parent company
investments
and intercompany loans, the
carrying value of intangible
assets is a key audit matter.
-------------------------------------------------------------------------
Revenue recognition
Revenue for the year was Our audit procedures included
GBP23.6m, the following:
representing a significant * Obtaining the Group's IFRS 15 impact assessment and
increase considering this in detail by reference to the
on 2018. 2019 saw the Group's underlying contracts with customers and
acquisition performance conditions set out therein;
of the Windsor Chrome project
which contributed new revenues
alongside Hernic and DCM. The * Evaluating the Group's revenue recognition policy and
revenue recognised is derived management's current year accounting assessment for
from platinum group metals the fair value of consideration receivable based on
("PGM") the contracts entered into;
concentrate and chromite
concentrate
sales. * Confirming the implementation of the Group's policy
to the Hernic, DCM and Windsor projects by performing
The Group also adopted IFRS tests to confirm our understanding of the process by
15 Revenue from Contracts with which revenue is calculated;
Customers for the first time.
Even though the Group
concluded * Confirming that fair value measurements are
that the implementation of determined in accordance with IFRS 13;
IFRS
15 resulted in no change to
the timing of revenue * Comparing foreign exchange rates used in management's
recognition, calculations;
this represents a change in
approach to the recognition
of revenue and required an * Substantive tests agreeing concentrates and
updated underlying calculations to independent sources; and
impact assessment by reference
to the Group's existing
contracts * Assessing the appropriateness of the related
and the performance conditions disclosures in notes 1.12 and 3, revenue recognition
placed on Jubilee within those accounting policy and revenue split by commodity, of
contracts. the group financial statements.
For the sale of chromite
concentrate
and PGM concentrate, the Based on our procedures, we noted
Group's no material exceptions and considered
revised revenue accounting management's key assumptions
policy to be within reasonable ranges.
is set out in note 1.12. We consider that revenue recognition
has been recognised appropriately
Due to the significance of and is in accordance with the
revenue Group's revenue recognition policy
to the consolidated financial and IFRS 15.
statements, the first year of
revenues from Windsor Chrome
and the judgement involved in
estimating consideration
receivable
and this being the first year
of adoption of IFRS 15,
revenue
recognition is a key audit
matter.
-------------------------------------------------------------------------
Accounting and disclosure of
convertible debt Our audit procedures included
During the year, Jubilee the following:
entered * Obtaining the funding agreement with ACAM LP to
into a funding agreement with determine the key features, terms and conditions;
ACAM LP for $8m to finance its
post balance sheet acquisition
of Sable Zinc as part of its * Reviewing management's proposed treatment and basis
development of the Kabwe for this;
Project.
Under the agreement, ACAM have * Challenging the Directors' assessment of the
the option to convert the loan applicable interest rate on an equivalent loan
and unpaid interest into without the conversion option and review of this by
convertible reference to external data and the Group's wider
loan notes with a fixed portfolio of funding arrangements;
conversion
price of 2.81p per share.
* Reworking and recalculating management's effective
Jubilee have the option to interest rate calculations based on contractual cash
repay flows and analysis of the relevant direct costs
early the loan which will associated with the loan;
trigger
the issue of warrants with a
value equal to 50% of the * Recalculating and agreeing with management the
amount resulting equity component and considering its
of the loan and accrued treatment within equity on the Statement of Financial
interest Position;
outstanding, divided by 2.81p.
Due to the significance of the * Ensuring that the necessary accounting adjustments
loan and the complexities in were reflected in the group financial statements;
assessing its treatment, the
accounting and disclosure of
the convertible loan is a key * Reviewing the application of exchange rates in the
audit matter. loan workings and assessing the appropriateness of
the loan treatment by reference to IAS 32;
* Reviewing the disclosure requirements to ensure
adequate disclosure was given in the financial
statements.
Based on our procedures, we noted
no material exceptions and considered
the accounting and disclosure
of the convertible loan, as amended,
to be reasonable.
-------------------------------------------------------------------------
Accounting and disclosure of
the Group's option over Enviro Our audit procedures included
Mining Limited the following:
* Discussing with management their view of the
During the year the Group appropriate accounting treatment of the overall
entered transaction;
into updated shareholder and
operator agreements with BMR
Group Plc in respect of the * Challenging management's assessment of whether the
operation of the Kabwe gaining of control of Kabwe Operations Limited
Project. represents a business combination;
These agreements took
Jubilee's * Reviewing the underlying updated operating and
interest in Kabwe Operations shareholder agreements to understand key terms;
Limited, the entity operating
the project, from 15% to
87.5%. * Understanding the assets held within Enviro Mining
Jubilee acquired the and Enviro Processing and the nature of the
additional small-scale mining licence held therein; and
interest in exchange for a
commitment
to execute the improved * Critically evaluating the cash flow model relating to
methodology the Kabwe Project used to value the shares of Enviro
for the exploitation of the Mining and challenging key assumptions including the
project as well as project discount rate applied, royalty rates, total forecast
funding. material processed and capital requirements;
A further feature of the
agreement * Understanding the rationale for an overall valuation
was to assign Jubilee an discount applied to reflect the pre-production stage
option of the project, the inherent uncertainties and the
to acquire, at no additional fact that the Sable Zinc refinery had not been
cost, 100% of the share acquired at the time the model was prepared;
capital
of Enviro Mining Limited, a
subsidiary of BMR Group Plc * Assessment of the appropriate deferred tax treatment
and which owns the share associated with the fair value uplift on the asset.
capital
of Enviro Processing Limited,
a company which holds rights
to access the material at Based on our procedures, we noted
Kabwe. no material exceptions and considered
the accounting and disclosure
If and when Jubilee exercise of the financial asset to be
that option, BMR Group plc appropriate.
will
pass its 12.5% interest in
Kabwe
Operations Limited to Jubilee
and will instead be entitled
to a 12.5% royalty from
project
earnings once Jubilee have
achieved
a 20% return from the project
and other conditions are met.
At the year-end Jubilee held
the option over Enviro Mining
Limited and therefore recorded
the option as a financial
asset
measured at fair value.
Deriving
that fair value required
significant
judgement and therefore the
recognition of this option was
considered a key audit matter.
-------------------------------------------------------------------------
Accounting and disclosure of
the acquisition of Windsor Our audit procedures included
Chrome the following:
trade and assets * Discussing with management their view of the
appropriate accounting treatment of the overall
During the year the Group transaction;
acquired
the trade and assets of an
existing * Obtaining and reviewing the underlying acquisition
trading operation at Windsor documents and identifying the key terms of the
Chrome. That acquisition was transaction;
treated as a business
combination
as the deal encompassed * Understanding the rationale for meeting the
operating definition of a business combination under IFRS 3 and
plant, land, stock, testing those assertions to the facts;
intellectual
property, other associated
assets * Obtaining management's register of assets acquired
as well as employees at the and their associated fair value assessment;
site.
The total consideration for * Physical verification of assets at the Windsor site;
the acquisition was set at
$10.5m
subject to various adjustment * Reviewing and recalculating the fair value of cash
mechanisms and was met through and shares issued in consideration;
the issue of new shares as
well
as cash. The cash element was * Reviewing external evidence available in respect of
met through a combination of the fair value of assets acquired;
existing funds and debt
funding.
* Considering any evidence of impairment by reference
The recognition of the to future cash flow models associated with the
transaction Windsor Chrome operation including in respect of
as a business combination volume of material processed and discount rates;
required
an assessment of the fair
values * Reviewing the disclosure requirements to ensure
of the assets acquired as well adequate disclosure was given in the financial
as the consideration issued. statements.
Due to the various judgement
areas involved we consider
this Based on our procedures, we noted
transaction to be a key audit no material exceptions and considered
matter. the accounting and disclosure
of the business combination to
be appropriate.
-------------------------------------------------------------------------
Our application of materiality
We apply the concept of materiality in planning and performing
our audit, in evaluating the effect of any identified misstatements
and in forming our audit opinion. Our overall objective as auditor
is to obtain reasonable assurance that the financial statements as
a whole are free from material misstatement, whether due to fraud
or error. We consider a misstatement to be material where it could
reasonably be expected to influence the economic decisions of the
users of the financial statements.
We have determined a materiality of GBP1,000,000 (2018:
GBP600,000) for both the Group and Company financial statements.
This is based on 1.5% of net assets per draft financial information
at the planning stage. We did not consider there to be any reason
to revise materiality during the audit.
An overview of the scope of our audit
We tailored the scope of our audit to ensure that we obtained
sufficient evidence to support our opinion on the financial
statements as a whole, taking into account the structure of the
Group and the Parent Company, the accounting processes and controls
and the industry in which the Group operates.
As Group auditors we carried out the audit of the Company
financial statements and, in accordance with ISA (UK) 600, obtained
sufficient evidence regarding the audit of seven subsidiaries
undertaken by component auditors in South Africa and Mauritius.
These seven subsidiaries were deemed to be significant to the Group
financial statements either due to their size or their risk
characteristics. The Group audit team directed, supervised and
reviewed the work of the component auditors in South Africa and
Mauritius, which involved issuing detailed instructions, holding
regular discussions with component audit teams, performing detailed
file reviews and visiting South Africa to attend local audit
meetings with management. Audit work in South Africa and Mauritius
was performed at materiality levels of GBP100,000, lower than Group
materiality.
We also reviewed the audit work performed by a component auditor
on one material associate whose results are equity accounted in the
financial statements. That associate has a different reporting
period to the Group and therefore we performed additional work to
gain comfort on the results of the associate for the relevant
period.
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the Directors made
subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. We also
addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the
Directors that represented a risk of material misstatement due to
fraud.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information; we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the Strategic Report and the
Directors' Report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the Strategic Report and the Directors' Report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
parent company and its environment obtained in the course of the
audit, we have not identified material misstatements in the
Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
The directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group's and the parent company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
group or parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Jamie Cassell (Senior Statutory Auditor)
for and on behalf of Saffery Champness LLP
Chartered Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
14 November 2019
Annexure 2 - Headline earnings per share
Headline earnings per share ("HEPS") is calculated using the
weighted average number of shares in issue during the period under
review and is based on earnings attributable to ordinary
shareholders, after excluding those items as required by Circular
4/2018 issued by the South African Institute of Chartered
Accountants (SAICA).
In compliance with paragraph 18.19 (c) of the JSE Listings
Requirements the table below represents the Group's Headline
earnings and a reconciliation of the Group's loss reported and
headline earnings used in the calculation of headline earnings per
share:
Reconciliation of headline earnings per
share
----------------------------------------------------------------------------------------- ---------------------------------------------------
30 June 2019 30 June 2018
----------------------------------------------------------------------------------------------------------------------------------------------
Gross Net Gross Net
GBP'000 GBP'000 GBP'000 GBP'000
Earnings/(loss) for the period
attributable to ordinary shareholders 6 994 (2 115)
Fair value adjustments of other
financial assets (5 022) (3 616) - -
Share of impairment loss from
equity accounted
associate 783 564 93 67
Impairment of intangible assets 231 166 622 448
------------------------------------------- -------------------------------------------- ------- ------------- ---------------------------
Headline earnings/(loss) from
continuing operations 4 108 (1 600)
------------------------------------------- ----------------------------------------------------- ------------------------------------------
Weighted average number of shares
in issue ('000) 1466128 1203479
Diluted weighted average number
of shares in issue ('000) 1475698 1203479
Headline earnings/(loss) per
share from continuing operations
(pence) 0.28 (0.13)
Headline earnings/(loss) per
share from continuing operations
(ZAR cents) 5.14 (2.31)
Diluted headline earnings/(loss)
per share from continuing
operations (pence) 0.28 (0.13)
Diluted headline earnings/(loss)
per share from continuing
operations (ZAR cents) 5.11 (2.31)
Average conversion rate used
for the period under review
GBP:ZAR 0.05452 0.05759
------------------------------------------- ----------------------------------------------------- ------------------------------------------
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 GGGPWGUPBUMC
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