Unaudited interim results

RNS Number : 6876H
Jubilee Metals Group PLC
26 March 2020
 

Jubilee Metals Group PLC

Registration number (4459850)

AltX share code: JBL

AIM share code: JLP

ISIN: GB0031852162

("Jubilee" or "the Company")

 

 

 

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR). Not for release, publication or distribution in whole or in part in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction.

 

UNAUDITED INTERIM RESULTS

FOR THE SIX MONTHS ENDED 31 DECEMBER 2019

 

Our thoughts and best wishes go out to all during these unprecedented times.

 

Jubilee Metals Group ("Jubilee" or the "Company" or the "Group") , the AIM and Altx traded metals processing company   is pleased to announce its unaudited interim results of the Group for the six months ended 31 December 2019.

 

HIGHLIGHTS

 

Financial highlights

 

· Group earnings increased 778 % to £ 6.67 million (ZAR 115.2 million) (2018: £  0.76 million (ZAR 13.2 million))

· Cash generated from operations up 570 % to £ 4.89 million (ZAR 84.7 million) (2018: £ 0.73 million (ZAR  12.5 million))

· Revenue increased 205 % to £ 25.40 million (ZAR 439.4 million) (2018: £ 8.32 million (ZAR 143.9 million))

· Attributable group earnings  increased 146 % to £ 9.85 million (ZAR 170.4 million) (2018: £ 4.0 million (ZAR 69.9 million))

· The group balance sheet strengthened further on the back of the strong financial performance and large strategic investments, with total assets standing at £ 118.8 million, up from £ 102 million at the end of June 2019, total equity increasing by 12 % to £ 88 million, for the same period, maintaining a high 74 % equity ratio (30 June, 2019: 77 %)

· The group paid a substantial £ 17.7 million in cash for investments made during the period under review, whilst at the same time reducing external debt by £ 2.2 million, keeping the net gearing ratio at a low 0.3 %

· Backed by a strong £ 4.89 million cash generated from operating activities and proceeds of £ 6.5 million from an oversubscribed capital raise, the cash and cash equivalents stood at £ 10.2 million, with short term assets covering a healthy 166 % of short term liabilities

 

· Basic earnings per share for the period 0.35 pence (ZAR 6.09 cents(i)) (2018: 0.06 pence (ZAR 99 cents))

 

(i)  Conversion rates used for revenue and earnings are at the average conversion rate for the period and for balance sheet at the spot rate at period end. Conversion rates used for capital expenditure and acquisitions are at current spot rates

 

Operational and projects highlights

 

· PGM(ii) production up 72 % to 21 082 ounces (2018: 12 288 ounces)  

· PGM revenue up 130 % to £ 16.28 million (ZAR 281.6 million) (2018: £ 7.09 million (ZAR 130.6 million))

· PGM attributable earnings up 137 % to £ 9.70 million (ZAR 167.7 million) (2018: £ 4.09 million (ZAR 75.60 million))

· Chrome revenue up 707 % to £ 9.12 million (ZAR 157.8 million) (2018: £ 1.13 million (ZAR 19.5 million))

· 186 249 tonnes (2018: 17 011 tonnes) of saleable coarse chromite concentrate produced

· Completed the acquisition of the Sable Zinc Refinery in Zambia and produced first high grade copper metal in December 2019 while also commencing with the construction of the zinc refinery circuit

· Inyoni Operations acquired 100 % of current PGM surface tailings (estimated at 3.33 million tonnes) as well as future PGM tails, further extending the project life and taking full control of all operational aspects and gaining 100 % economic rights

· Inyoni Operations also secured rights to all chrome contained in estimated 3.33 million tonnes of surface tailings and produced first chrome concentrate for own sales in November 2019

· Oversubscribed placing of £ 6.5 million to support targeted growth

 

(ii)  Platinum Group Metals (6E platinum, palladium, rhodium, iridium, osmium, and gold)

 

 

Leon Coetzer, CEO says: "It is a challenging time to express one's appreciation and satisfaction to a team for delivering an outstanding performance The Jubilee team has delivered yet another exceptional set of results during the period under review. We call it 'the Jubilee Way', which focusses on translating leading in-house technical excellence and innovation into industry leading operational efficiencies.

 

"We have made some very significant progress, including the completion of two strategic transactions, and the results as a whole, demonstrate the robustness of our business model generating significant cash flow for the Group. Despite volatile metal prices, including in particular the volatility we have seen in chrome prices, our diversity across commodities has meant we have delivered record earnings on the back of increased production.

 

"We have continued to invest significantly in our business having advanced in excess of £ 17 million into our future growth with the acquisition of the Zambian based Sable Zinc Refinery, which completed in August 2019, and the acquisition in November 2019 of 100 % of the PGM and chrome surface rights at our Inyoni Operations. The Sable Zinc Refinery has further enhanced the Company's operational earnings capability, expanding Jubilee's operations to other geographical areas and metals.  These strategic investments are quickly translating Group investments into cash generation.

 

"In addition, and to assist with the financing of these transactions, we were very grateful for the support from investors which raised £ 6.5 million in an oversubscribed placing. 

 

"In what has been an incredibly fast moving and evolving situation, as a group we are not immune to the current global COVID-19 pandemic. The safety of our team and employees is our highest priority at this time and we therefore applaud the pro-active decision taken by the South African government to enforce a 21-day nationwide lockdown. Whilst we are aware that the COVID-19 situation is evolving, we have a robust business model and are confident that the business will be able to withstand this disruption having, in anticipation, already taken proactive measures to minimise costs and maximise production leading up to this guidance. Furthermore, whilst work on the ground has been temporarily halted, we will continue to work remotely where possible, to progress operations and continue to advance our growth strategy.

 

"We would like to take this opportunity to send our thoughts and best wishes to all at this unprecedented and difficult time."

 

KEY STATISTICS

 

GROUP

Unit

6m to

Dec-19

6m to Dec-18

12m to

Jun-19

Revenue

£'000

25 403

8 327

23 586

Adjusted attributable earnings 1

£'000

9 849

4 040

10 055

Adjusted attributable earnings margin

%

  39

  49

  43

EBITDA

£'000

10 269

2 419

12 546

Adjusted EBITDA 2

£'000

8 679

2 809

8 952

Adjusted EBITDA margin

%

34

34

38

 

 

 

 

 

PGM

 

 

 

 

PGM £ revenue

£'000

16 280

7 093

14 855

PGM $  revenue

$'000

20 516

9 290

18 866

Attributable PGM £ earnings

£'000

9 695

4 093

8 158

Attributable PGM $ earnings

$'000

12 218

5 361

10 361

Attributable PGM earnings margin

%

  60

  58

  55

Attributable PGM ounces produced

oz

21 082

12 288

23 847

PGM $ revenue per ounce

$/oz

  973

  756

  791

PGM attributable $ earnings per ounce

$/oz

  580

  436

  434

Adjusted PGM production $ unit cost3

$/oz

  519

  422

  470

 

 

 

 

 

CHROME

 

 

 

 

Chrome £ revenue

£'000

9 123

1 126

7 725

Chrome $ revenue4

$'000

11 497

1 475

9 811

Attributable chrome £ earnings

£'000

271

  (267)

1 309

Attributable chrome $ earnings

$'000

341

  (350)

1 662

Attributable chrome earnings margin

%

  3

  (24)

  17

Attributable chrome tonnes produced

tonnes

186 249

17 011

181 947

Chrome $ revenue per tonne

$/t

  62

  87

  54

Chrome attributable $ earnings per tonne

$/t

  2

  (21)

  9

1= Attributable earnings refers to earnings attributable to the group based on its contractual rights in each project.

2= Adjusted EBITDA refers to EBITDA adjusted for non-cash expenses including impairments, gain on bargain purchase

and foreign exchange differences on transactions.

3= The adjusted PGM production unit cost includes all direct and indirect costs attributable to the project including allocated corporate charges. The Dec 19 period includes all operating costs for the Windsor PGM Joint Venture allocated to the Jubilee attributable PGM ounces.

4= The chrome revenue is recognised on an ex-works basis after costs of export logistics including freight, shipping and marketing.

 

 

TRANSACTIONS

 

6m to

Dec-19

6m to

Dec-18

12m to

Jun-19

 

 

£ '000

£ '000

£ '000

Acquisition of chrome plant (South Africa)

 

 

 

 

Fair value of the assets acquired

 

 

 

8 289

Fair value of  purchase consideration

 

 

 

(8 289)

 

 

 

 

 

Acquisition of Sable Zinc Limited (Zambia)

 

 

 

 

Fair value of the assets acquired

 

12 253

 

 

Fair value of the purchase consideration

 

(9 944)

 

 

Gain on bargain purchase

 

2 309

 

 

Purchase consideration outstanding at period end

 

2 275

 

 

 

 

 

 

 

Acquisition of PGM and chrome rights (Mauritius)

 

 

 

 

Fair value of the assets acquired

 

14 472

 

 

Fair value of the purchase consideration

 

(14 472)

 

 

Purchase consideration outstanding at period end 1

 

4 531

 

 

 

 

 

 

 

Total purchase consideration of acquisitions

 

26 726

  - 

   8 289

Funded from external loans

 

(10 303)

  - 

  - 

Funded from share placings

 

(9 209)

  - 

(1 463)

Funded from own cash

 

(7 214)

  - 

(6 826)

 

 

 

 

 

GROUP CASH

 

 

 

 

Opening balance

 

18 865

6 376

6 376

Cash from operations

 

4 895

726

4 757

Acquisition of chrome plant (South Africa)

 

-

-

(6 826)

Acquisition of PGM and chrome rights (Mauritius)

 

(11 129)

-

-

Acquisition of Sable Zinc Limited (Zambia)

 

(5 295)

-

-

Purchase of intangible assets

 

-

(636)

(2 182)

Purchase of property plant and equipment

 

(1 101)

(2 379)

(4 496)

Issue of Jubilee ordinary shares

 

5 902

-

10 672

Net proceeds/(repayment) of loan funding

 

(2 154)

1 595

10 303

Other

 

263

86

Closing balance

 

10 247

5 768

1= Post the period under review a further payment of £ 3.3 million was made towards the PGM and chrome rights acquisition as announced on 4 November 2019. The final payment on the transaction was made on 19 March 2020. In terms of the acquisition agreement the final payment was adjusted for certain PGM and chrome variables which, resulted in a downward adjustment to the total purchase consideration of £ 2.2 million. The total foreign exchange conversion difference for the transaction amounted to a gain of £ 0.004 million. At current conversion rates the foreign exchange gain on the transaction would have been £ 0.77 million.

Chairman's Statement

 

Dear Shareholder,

 

This interim period has, again, produced exceptional results arising from maturing operations, strategic acquisitions, productivity improvements and an austere approach to our business activities.  At the time of writing this statement we, like every other company and individual, are facing the challenges of the COVID-19 pandemic.  We remain very optimistic for the long-term outlook but are mindful of short-term risk.  On 24 March 2020 we provided an update to our shareholders relating to the announcement by the South African government of a 21-day nationwide lockdown and its potential immediate impact on our operations.  The measures that have implemented by the Group are focussed on preserving the Company's liquidity and ensuring that we are able to rapidly restart operations following the enforced stoppage.  At the time of writing this statement, our operations in Zambia remain unaffected by the COVID-19 virus. However, the guidance being given in respect of the COVID-19 outbreak is evolving and the Company will continue to monitor the situation closely.

 

Our longer-term vision for the Company remains and has been clearly demonstrated with the expansion of the business during the period under review, having grown and diversified our earnings base.  On 23 August 2019, we announced the completion of the acquisition of the Sable Zinc Refinery in Kabwe (the 'Refinery').  This acquisition presents Jubilee with a very well-placed platform from which to enjoy the various base metal opportunities presented by Zambia. The Refinery expands our commodity basket to include copper, vanadium, zinc and lead. Having a diversified commodity basket, such as we now have, provides us with considerable resilience in the face of fluctuating metals prices, some of which we have seen of late - both very strong, and much weaker.  In addition we have acquired a facility that was brought in part into operation within 4 months of the acquisition therefore reducing our lead time to production. The copper circuits are advanced with a capacity of some 15 000 tonnes of contained copper per annum so we are accelerating our copper endeavours, whilst updating the zinc facility.

 

In July 2019, our Windsor PGM project in South Africa commenced operations and by the end of August 2019 all circuits were functional with productivity initiatives being implemented, during this interim period to date. 

 

On 4 November 2019, we announced that we had acquired 100 % of the earnings of the Inyoni Operation in South Africa (previously named Hernic). The objective of this acquisition was to transform Jubilee from a contracting joint venture partner to a full owner of 100 % of the economic rights, without additional risk.  In acquiring full control, Jubilee has increased its flexibility and now has the opportunity to increase throughput, respond to market conditions and optimise certain aspects of the operation to its ultimate benefit. 

 

To support these acquisitions and to assist in financing targeted expansion plans both in Zambia and South Africa, we completed an oversubscribed placing of some £ 6.5 million in mid-November 2019.

 

Looking forward, the Board is convinced that the long-term fundamentals for copper are exceptional and as such have put focus on the Kabwe copper project to ensure that maximum production capability is achieved.  Our presence in Zambia has demonstrated and re-asserted that many opportunities exist to expand our business model into all aspects of copper production in the country.  We are currently exploring and prioritising these opportunities and will continue to advance due diligence on potential acquisition or partnership opportunities with a view to expand future earnings in a sustainable manner.

 

With our sustainable business model, Jubilee and our brand is now well recognised globally. With the ever increasing requirement across all continents for legacy environmental clean-up and a cleaner planet, we are known as being a company able to deliver on this need. We are unique with in-house technical excellence, high technological capabilities, and vast knowledge in the field of reprocessing mine waste and metals recovery across a broad basket of metals.

 

With so much opportunity for growth from our current business activities alone, the Company will be focussing on maximising this benefit from current operations in the medium term, where we know the risks and where we believe incremental benefit can be substantial. We will of course, however, continue to assess strategic business and acquisition opportunities for the long-term benefit of Jubilee and all shareholders. Despite the current volatile economic climate globally, we continue developing our business activities, consistent with our mission, and remain positive that our unique position in the industry will be exploited for the benefit of all our shareholders.

 

Colin Bird

Non-Executive Chairman

 

INTERIM PERIOD OVERVIEW 

 

The continued growth of Jubilee's operations and overall business is testament to 'the Jubilee Way' which is built on technical excellence and innovation translating into operational and metallurgical efficiencies. 

 

During the 6 month period under review ending 31 December 2019, Jubilee acquired the multi metal refinery Sable Zinc Refinery in Zambia, commenced operations at its Windsor PGM project and completed the acquisition of the PGM and chrome rights of more than 3 million tonnes of surface material.  These activities boosted the PGM operations delivering an increase of 72 % in produced PGM ounces while diversifying Jubilee's metal portfolio across geographical areas and into base metals such as copper, zinc, vanadium and lead.

 

Since acquiring the Refinery, the Company has commenced with the construction of the zinc refinery circuit and has brought the copper refinery circuit into operation producing its first high grade copper metal in November 2019.

 

Beyond growth in revenue and earnings Jubilee has also strengthened its asset base by significantly increasing its access to chrome and PGM surface material with acquisition of all historical and future PGM tailings and all historical chrome rights at the Inyoni Operations. The acquisition transformed the operation from a co-operation processing agreement to full ownership of the economic rights, without additional risk to the Company. 

 

Platinum Group Metals (PGM) Operations update - South Africa

 

Jubilee's PGM operations consist of the Inyoni and Windsor PGM operations.

 

The PGM operations showed a significant growth in output delivering 21 082 ounces of PGM concentrate for H2 2019, up 72 % from H2 2018. The majority of the growth in output came from the Group's Windsor PGM project coming into operation during August 2019 and reaching stable production for the month of November 2019.  The Windsor PGM operations ("Windsor") is a Joint Venture Project ("JV") with Eland Platinum ("Eland") under which the platinum processing plant at Eland is used for the processing of Windsor PGMs material.  Under the terms of the JV the PGM earnings generated from the project are shared between the JV partners with the majority of the earnings returned to Windsor.  The Jubilee attributable PGM ounces reported for the Windsor PGM project account for approximately 60 % of total ounces produced under the JV.  Jubilee's unit cost to produce a PGM ounce remained below US$ 520 per ounce.  The unit cost accounts for 100 % of the operating cost for the JV allocated to only the PGM ounces attributed to Jubilee.

 

As announced on 24 October 2019, Jubilee acquired 100 % of the rights to PGM earnings from the current and future tailings produced at the Inyoni Operations. In addition to the current unprocessed 1.70 million tonnes of historical tailings at the Inyoni Operations and the 630 000 tonnes of previously processed tailings, Jubilee has acquired the rights to a further circa one million tonnes of PGM rich material. As reported under Inyoni Chrome, at the time of reporting the Company had completed the recapitalisation of the Inyoni feed systems to reach the targeted 50 000 tonnes per month feed rate.  The new feed system will be ramped up during Q1 2020.

 

PGM revenue for H2 2019 increased by 107 % to £ 16 million (ZAR 298 million) compared to H1 2019.

 

The table below presents the combined operational revenue and earnings performance for PGMs for the period under review. The figures represent the final results based on reconciled production inputs and the allocation of costs have been standardised to fully account for all in sustainable costs:

 

PGMs

Tailings processed tonnes

PGM ounces delivered

Project revenue (£ '000)

Project revenue  (ZAR'000)

Jubilee attributable earnings

(£ '000)

Jubilee attributable earnings (ZAR'000)

Unit cost/ PGM oz (US$)1

6m to 31 Dec 2018

267 183

12 288

 7.093

 130.592

 4.093

 75.601

422

6m to 31 Dec 2019

553 672

21 082

16.280

297.530

9.695

167.718

519

12m to 30 Jun 2019

504 218

23 847

14 855

273.278

8.158

150.407

470

1= The unit cost per PGM ounce produced excludes any inter-company charges for the production of the PGM containing tailings material. In the case of the Windsor JV all operating cost is allocated to the Jubilee attributable ounces.

2= Attributable earnings refers to project earnings allocated to the group based on the group's contractual rights in each project.  

 

The PGM basket price has appreciated during the period driven by the shortfall in the supply of PGMs to meet industry demand and with no new significant supplies of PGMs targeted in the short term.  Post the period under review the PGM basket price saw a sharp reduction in price linking to the uncertainty caused by the COVID-19 epidemic. 

 

Chrome Operations update - South Africa

 

Jubilee's chrome operations include the DCM Chrome, Windsor Chrome and Inyoni Chrome (following the acquisition by Inyoni of the chrome rights in November 2019). The DCM Chrome operation includes the leading Jubilee Fine Chrome facility, successfully extracting fine chrome from previously discarded chrome wastes.

 

Jubilee now holds a total chrome ore processing capacity of 145 000 tonnes per month of feed material, which delivered 186 249 tonnes of chrome concentrate during H2 2019. This new production record reflects only two months' worth of chrome production at Inyoni, the impact of which will be better reflected during H1 2020.

 

Since the acquisition of the Windsor Operation in January 2019, Jubilee has invested into improved processing technology and significantly improved operational efficiencies, which strengthened the operations ability to react to weakening metal prices. The chrome operations are well positioned to capitalise on any recovery in the chrome market and to deliver PGM rich tails to the PGM operations. 

 

As announced on 5 November 2019, Jubilee acquired 100 % of all further chrome rights to the chrome contained in all the historical tailings at Inyoni.  In addition, Jubilee has increased the scope of its Inyoni Operations to take control of the re-mining of tailings to control the feed supply, targeting to increase feed rate to 50 000 tonnes per month. 

 

The table below presents the combined operational revenue and earnings performance for chrome for the period under review. The figures represent the final results based on reconciled production inputs and the allocation of costs have been standardised to fully account for all in sustainable costs:

 

CHROME

Chromite concentrate produced

Tonnes

Project revenue (£ '000)

Project revenue  (ZAR'000)

Jubilee attributable earnings

(£ '000)

Jubilee attributable earnings (ZAR'000)

6m to 31 Dec 2018

17 011

1.126

20.664

(267)

(4.906)

6m to 31 Dec 2019

186 249

9.123

157.821

271

4.686

12m to 30 Jun 2019

181 947

7.725

141.852

1.309

24.001

 

Integrated Kabwe Operations, Zambia - Copper, zinc, lead and vanadium update

 

The Company's Kabwe Project combined with its multi-metal Sable Zinc Refinery, establishes Jubilee's fully integrated multi-metal recovery and refining operational footprint in Zambia. The Sable Zinc Refinery, which acts as a central processing facility for third party material in the region, gives access to a current resource comprising of an estimated 6.4 million tonnes of surface waste assets containing 356 843 tonnes of zinc, 351 386 tonnes of lead and 1.26 % equivalent vanadium pentoxide.

 

During the period under review, the copper refinery circuit was brought on-line to process historical copper tailings as well as third party sourced run-of-mine material. The first high grade copper metal commenced production in December 2019, with the completion of the solvent extraction circuit.  The accelerated ramp-up of the copper circuit remains a strong focus and at present has not been impacted by the COVID-19 epidemic.

 

 

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019

 

Consolidated Statement of Comprehensive Income for the six months ended 31 December 2019

 

 

 Unaudited

 Unaudited

 Audited

 

 Group

 Group

 Group

 

 6 months

 6 months

 12 months

 

ended 31 December

ended 31 December

ended 30

June

 

  2019

  2018

  2019

 

£ '000

£ '000

£ '000

 

 

 

 

Sales revenue

25 403

8 327

23 586

Cost of sales

(15 554)

(4 286)

(10 709)

 

9 849

4 041

12 876

Operating costs

(4 260)

(2 662)

(8 338)

Operating profit

5 589

1 379

4 538

Other income

60

-

385

Gain on bargain purchase

2 309

-

-

Investment income

50

14

30

Finance costs

(1 324)

(463)

(1 113)

Share of loss from associates

(121)

(168)

(865)

Impairment of intangible assets

-

-

5 022

Profit before taxation

6 563

762

7 946

Taxation

-

-

(970)

Profit for the period

6 563

762

6 976

Other comprehensive income

 

 

 

- (Loss)/profit on translation of foreign subsidiaries

(3 112)

(460)

680

Total comprehensive profit

3 451

302

7 656

Attributable to:

 

 

 

Owners of the parent:

 

 

 

Profit for the period attributable to owners of the parent

6 660

756

6 994

Non-controlling interest

 

 

 

(Loss)/profit for the period - non controlling interest

(97)

6

(17)

Profit for the period

6 563

762

6 976

Total comprehensive income attributable to:

 

 

 

Owners of the parent

3 634

321

7 627

Non-controlling interest

(183)

(19)

29

 

3 451

302

7 656

Weighted average number of shares ('000)

1 891 445

  1 314 013

1 466 128

Diluted weighted average number of shares ('000)

1 909 126

1 314 013

1 475 698

Earnings per share (pence) 

0.35

0.06

0.48

Diluted earnings per share (pence)

0.35

0.06

0.47

 

 

Consolidated Statement of Financial Position as at 31 December 2019

 

 

 

 Unaudited

 Unaudited

 Audited

 

 Group

 Group

 Group

 

 6 months

 6 months

 12 months

 

ended 31 December

ended 31 December

ended 30

June

 

  2019

  2018

  2019

 

£ '000

£ '000

£ '000

Assets

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

26 946

11 578

17 902

Intangible assets

60 431

44 304

46 938

Investments in associates

1 774

2 593

1 895

Other financial assets

5 848

834

5 709

Total non-current assets

95 000

59 309

72 445

 

 

 

 

Current assets

 

 

 

Inventories

1 605

1 432

1 661

Trade and other receivables

11 948

4 069

9 072

Current tax receivable

-

16

-

Other financial assets

-

172

-

Cash and cash equivalents

10 247

5 768

18 865

Total current assets

23 800

11 457

29 598

Total assets

118 800

70 766

102 042

 

 

 

 

Equity and liabilities

 

 

 

Share capital

111 723

93 844

105 820

Reserves

19 293

21 218

22 319

Accumulated loss

(45 183)

(58 302)

(51 843)

Total equity before non-controlling interest

85 833

56 760

76 297

Non-controlling interest

2 211

2 345

2 393

Total equity

88 044

59 105

78 690

 

 

 

 

Non-current liabilities

 

 

 

Other financial liabilities

7 197

2 036

10 397

Long term provisions

531

-

-

Deferred tax liability

8 700

5 011

6 019

Total non-current liabilities

16 428

7 047

16 415

 

 

 

 

Current liabilities

 

 

 

Other financial liabilities

12 327

2 630

2 272

Trade and other payables

2 001

1 984

4 665

Total current liabilities

14 328

4 614

6 937

Total liabilities

30 756

11 661

23 352

Total equity and liabilities

118 800

70 766

102 042

 

Consolidated Statement of Changes in Equity as at 31 December 2019

 

 

 

 

 

 

 

 

 

 

Figures in pound sterling (£ '000)

 Share capital

Merger reserve

 Share based payment reserve

Convertible instrument reserve

 Currency translation reserve

 Total reserves

Accumulated loss

 Total attributable to parent of equity holders

 Non-controlling interest

 Total equity

Balance at 30 June 2018

94 065

23 184

2 469

-

(4 221)

21 432

(59 058)

56 439

2 363

58 802

Total comprehensive income for the period

 

 

 

 

633

633

6 994

7 627

29

7 656

Issue of share capital net of costs

11 765

 

 

 

 

 

 

11 765

-

11 765

Share warrants issued

(10)

 

232

 

 

232

 

222

-

222

Share warrants expired

 

 

(181)

 

 

(181)

181

-

-

-

Equity component of convertible loan note

 

 

 

203

 

203

 

203

-

203

Changes in fair value - control not lost

 

 

 

 

 

 

41

41

-

41

Changes in ownership- control not lost

 

 

 

 

 

 

 

 

1

1

Total changes

11 755

 

51

203

633

887

7 215

19 857

30

19 888

Balance at 30 June 2019

105 820

23 184

2 520

203

(3 587)

22 319

(51 843)

76 297

2 393

78 690

Total comprehensive income for the period

 

 

 

 

(3 025)

(3 025)

6 660

3 634

(183)

3 452

Issue of share capital net of costs

5 902

 

 

 

 

 

 

5 902

-

5 902

Total changes

5 902

 

 

 

(3 025)

(3 025)

6 660

9 536

(183)

9 354

Balance at 31 December 2019

111 723

23 184

2 520

203

(6 613)

19 293

(45 183)

85 833

2 211

88 044

                                   

 

 

Consolidated Statement of Cash flow for the six months ended 31 December 2019

 

 

 

 Unaudited

 Unaudited

 Audited

 

 

 

 Group

 Group

 Group

 

 

 

 6 months

 6 months

 12 months

 

 

 

ended 31 December

ended 31 December

ended 30

June

 

 

 

  2019

  2018

  2019

 

 

 

£ '000

£ '000

£ '000

Cash flows from operating activities

 

 

 

Profit before taxation

6 564

762

7 946

Adjustments for:

 

 

 

Depreciation and amortisation

2 382

1 381

3 487

Impairment of intangible assets

-

-

232

Fair value adjustments

-

-

(5 022)

Gain on bargain purchase

(2 309)

-

-

Provisions

-

(172)

-

Share based payments

-

-

222

Results of equity accounted investments

121

168

865

Investment income

(50)

(14)

(30)

Finance cost

 

1 173

  204

787

Working capital changes

 

 

 

  Increase in inventories

440

(126)

637

 

Increase in receivables

811

  (845)

(5 777)

 

Decrease in payables

(3 113)

  (948)

2 167

Cash generated from operations

6 018

1 175

5 514

Investment income

50

14

30

Finance cost

 

(1 173)

(204)

(787)

Net cash from operating activities

4 895

726

4 757

Cash flows from investing activities

 

 

 

Purchase of intangible assets

(11 129)

(636)

(2 182)

Business combinations

(5 295)

-

(6 826)

Purchase of property, plant and equipment

(1 101)

(2 379)

(4 496)

Investment in associate

(173)

-

-

Sale of property, plant and equipment

-

-

17

Loans repaid

-

-

49

Loans received

-

100

-

Net cash used in investing activities

(17 698)

(2 916)

(13 438)

Cash flows from financing activities

 

 

 

Proceeds from share issues net of costs

5 902

-

10 672

Proceeds from other financial liabilities

-

1 595

10 934

Repayment of other financial liabilities

(2 154)

-

(631)

Net cash generated from financing activities

3 749

1 595

20 975

Net (decrease)/increase in cash and cash equivalents

(9 054)

(595)

12 293

Cash and cash equivalents at beginning of the period

18 865

6 376

6 376

Effects of foreign exchange

436

(13)

195

Cash and cash equivalents at the end of the period

10 247

5 768

18 865

 

NOTES TO THE UNAUDITED INTERIM RESULTS

 

1.    Basis of preparation

 

The Group unaudited interim results for the 6 months ended 31 December 2019 have been prepared using the accounting policies applied by the company in its 30 June 2019 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, IAS 34 - Interim Financial Reporting, the Listings Requirements of the JSE Limited, the AIM rules of the London Stock Exchange and the Companies Act 2006 (UK)). This condensed consolidated interim 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 Metals Group PLC. All monetary information is presented in the presentation 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 2019 contained in this interim 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 and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

 

2.    Financial review

 

Earnings per share for the six months ended 31 December 2019 are presented as follows:

 

 

 Unaudited

 Unaudited

 Audited

 

 Group

 Group

 Group

 

 6 months

 6 months

 12 months

 

ended 31 December

ended 31 December

ended 30

June

 

  2019

  2018

  2019

 

£ '000

£ '000

£ '000

Earnings for the period

6 660

756

6 993

Weighted average number of shares in issue ('000)

1 891 445

  1 314 013

1 466 128

Diluted weighted average number of shares in issue ('000)

1 891 445

1 314 013

1 475 698

Earnings per share (pence)

0.35

0.06

0.48

Diluted earnings per share (pence)

0.35

0.06

0.47

Earnings per share (ZAR cents)

6.09

0.99

8.75

Diluted earnings per share (ZAR cents)

6.03

0.99

8.69

 

The Group reported a net asset value of 4.36 pence (2018: 4.33) per share (ZAR 80.69 (2018: ZAR 74.92) cents per share)) and a net tangible asset value per share of 1.37 (2018: 1.09) pence per share (ZAR 25.31 (2018: ZAR 19.92 cents per share)). The total shares in issue as at 31 December 2019 were   2 017 510 million (2018: 1 363 486 million).

 

 

3.    Business Combinations

 

3.1 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 £ 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 £ 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 £ 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 fair value of the purchase consideration, net assets acquired and gain on bargain purchase are as follows:

 

Acquisition of Sable Zinc Limited (Zambia)

 

Fair value of the assets acquired

12 253

Fair value of the purchase consideration

(9 944)

Gain on bargain purchase

2 309

 

Assets acquired

 

Land and Buildings

1 087

Property, Plant and Equipment

11 395

Long term liabilities

(3 339)

Trade Receivables

183

Inventories

385

Other current assets

 3 505

Cash and Cash Equivalents

135

Trade payables

(167)

Other current liabilities

(930)

Fair value of assets acquired

12 253

Fair value of consideration

(9 944)

Gain on bargain purchase

2 309

There were no acquisitions made by Sable Zinc Limited in the previous period.

The acquired assets did not contribute to revenue or profit for the period under review.

 

3.2 Acquisition of PGM and chrome rights

 

Jubilee owns and operates a chrome and PGM processing facility at Inyoni with a processing capacity of 55 000 tonnes 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.

 

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.

 

Acquisition of PGM and chrome rights to earnings (Mauritius)

£ '000

Fair value of the rights acquired

14 472

Fair value of the purchase consideration

(14 472)

 

The purchase consideration was paid in tranches the last of which were made on 19 March 2020. In terms of the acquisition agreement the final payment was adjusted for certain PGM and chrome variables which, resulted in a downward adjustment to the total purchase consideration of £ 2.2 million. The total foreign exchange difference for the transaction resulted in a gain of £ 0.004 million. At current conversion rates the foreign exchange gain on the transaction would have been £ 0.77 million.  

 

4.    Dividends

 

No dividends were declared during the period under review (2018: nil).

 

5.    Business segments

 

In the opinion of the Directors, the operations of the Group companies comprise four reporting segments for the period under review, being:

 

the recovery of metals from surface mine waste and tailings ("Operations");

the evaluation of various mine waste opportunities and the development of suitable metal   recovery processes to d iversify across multiple commodities and in different countries including   platinum, chrome, cobalt, copper, zinc, lead, vanadium and gold to hedge income risk and to   align with global trends.  ("Business Development");

the parent  company  operates  a  head  office  based  in  the  United  Kingdom  which  incurs    administration and corporate overhead costs ("Corporate").

 

Segment report for the 6 months ended 31 December 2019

 

Figures in pound sterling ( £ '000 )

Operations

Business Development

Corporate

Total Group

Total revenues

25 403

-

-

25 403

Cost of sales

(15 554)

-

-

(15 554)

Forex losses

(417)

-

(181)

(598)

Share of loss from associates

-

-

(121)

(121)

Profit/(loss) before taxation

7 339

-

(776)

6 564

Taxation

-

-

-

-

Profit/(loss) after taxation

7 339

-

(776)

6 564

Interest received

39

-

11

50

Interest paid

(1 245)

-

(79)

(1 324)

Depreciation and amortisation

(2 382)

-

(2 382)

Total assets

73 098

37 349

8 354

118 800

Total liabilities

(23 675)

(3 328)

(2 290)

(30 756)

 

Segment report for the 6 months ended 31 December 2018

 

Figures in pound sterling ( £ '000 )

Base metals beneficiation

Business Development

Corporate

Total Group

Total revenues

8 324

3

-

8 327

Cost of sales

(4 226)

-

-

(4 226)

Forex losses

(167)

-

(31)

(198)

Share of loss from associates

-

-

(169)

(169)

Profit/(loss) before taxation

1 691

(116)

(813)

762

Taxation

-

-

-

-

Profit/(loss) after taxation

1 691

(116)

(813)

762

Interest received

11

-

3

14

Interest paid

(326)

-

(137)

(463)

Depreciation and amortisation

(1 210)

-

-

(1 210)

Total assets

25 720 (25,720)

39 938

5 108

70 766 (70,766)

Total liabilities

(4 392 )

(4 639)

( 2 630)

(11 661)

 

Segment report for the year ended 30 June 2019

 

Figures in pound sterling ( £ '000 )

Base metals beneficiation

Business development

Exploration

and mining

Corporate 

Total Group

 

Total revenues

23 585

-

-

-

23 585

Cost of sales

(10 709)

-

-

-

(10 709)

Forex losses

(8)

(7)

-

246

231

Share of loss from associate

-

-

-

(865)

(865)

Interest received

22

-

-

8

30

Interest paid

(933)

-

-

(180)

(1 113)

Profit before taxation

4 358

(229)

(232)

4 050

7 946

Taxation

( 16)

-

-

(954)

(970)

Profit after taxation

4 342

(229)

(232)

3 096

6 976

Depreciation, amortisation and impairments

 

(3 400)

 

(70)

 

(232)

 

-

 

(3 702)

Total assets

43 390

15 872

25 886

16 895

102 042

Total liabilities

(15 603)

(3 344)

(1 399)

(3 007)

(23 352)

 

6.    Share Capital and warrants

 

Share Capital

 

During the period under review the Company issued 162 208 900 new Jubilee shares at a price of 4 pence share to raise £ 6.5 million before expenses. Following the issue the Company's total issued share capital comprises 2 017 509 573 ordinary shares.

 

Warrants

 

At the period end and at the time of publishing these results the Company had the following warrants outstanding:

Number of warrants

Issue date

Subscription price (pence)

Expiry date

Volatility

%

Spot at Issue date pence

1 473 055

2019-03-21

3.38

2021-03-21

58.17

2.25

8 429 195

2019-11-14

4.00

2022-11-14

57.55

4.12

32 362 460

2018-12-28

3.86

2023-12-28

58.17

2.40

65 277 778

2018-01-19

6.12

2023-01-19

83.90

3.83

107 542 488

 

 

 

 

 

 

 

7.    Going concern

 

The directors have adopted the going-concern basis in preparing the interim financial statements.

 

8.    Unaudited results

 

These interim results have not been reviewed or audited by the Group's auditors.

 

9.    Interim report

 

Printed copies of the interim report are available to the public free of charge from the Company at 1st Floor 7/8 Kendrick Mews London SW7 3HG, United Kingdom Tel: +44 (0) 20 7584 2155  Fax: +44 (0) 20 7589 7806 and from Jigsaw Office Park, Ground Floor, Support Services Place, 7 Einstein Street, Highveld Techno Park, Centurion, 0157, Gauteng during normal office hours for 30 days from the date of this report and are also available for download from www.jubileemetalsgroup.com .

 

The financial information in this announcement is unaudited.

 

United Kingdom

26 March 2020

**ENDS**

 

For further information visit www.jubileemetalsgroup.com   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/James Keeshan
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/Juliet Earl

Tel +44 (0) 20 7236 1177

Annexure 1

 

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 1/2019 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

 Unaudited

 Unaudited

 Audited

 

Dec-19

Dec-18

Jun-19

 

  '000

  '000

  '000

 

 

 

 

Profit attributable to ordinary equity holders of the parent

6 660

756

6 994

Less gain on bargain purchase

(2 309)

  - 

  - 

Less fair value adjustment of other financial assets

  - 

  - 

(5 022)

Plus impairment of intangible assets

  - 

  - 

231

Plus share of impairment loss of equity accounted associate

  - 

  - 

783

Total  tax effects of adjustments

  - 

  - 

1 122

Headline earnings 

4 350

756

4 108

 

 

 

 

Weighted average number of shares in issue ('000)

1 891 445

1 314 013

1 466 128

Diluted weighted average number of shares in issue ('000)

1 909 126

1 314 013

1 475 698

Headline earnings per share  (pence)

  0.23

  0.06

  0.28

Headline earnings per share (ZAR cents)

  3.98

  0.99

  5.14

Diluted headline earnings per share (pence)

0.23

0.06

0.28

Diluted headline earnings per share (ZAR cents)

3.98

0.99

5.11

 


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.
 
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