Jangada Mines plc / EPIC: JAN.L / Market: AIM / Sector: Mining
29 June 2023
Jangada Mines plc ('Jangada' or 'the Company')
Final Results
Jangada Mines plc, a natural resources development company with interests in Brazil and elsewhere, is pleased to announce its audited results for the year ended 31 December 2022. The Annual Report & Accounts will today be made available on the Company's website and posted to Shareholders, where appropriate. The Company will shortly be posting out its Notice of AGM to Shareholders and a further announcement will be made in this regard.
GROUP STRATEGIC REPORT
INTRODUCTION
Jangada was incorporated as an acquisition vehicle for the purposes of acquiring mining concerns in Brazil.
The Company has subsequently focused its strategy on investing in mining assets with clear economic, geological, and environmental objectives. At the balance sheet date, the Company acted as a holding company for its subsidiary undertaking, VTF Mineração Ltda, which owns 100% of the Pitombeiras Vanadium Project and additionally the Company held investments in ValOre Metals Corp, Fodere Titanium Limited and Blencowe Resources Limited and a loan receivable from KEFI Gold and Copper PLC, which was converted to an equity investment after the year end.
The financial statements are presented in thousands of US Dollars ($'000). The financial statements have been prepared in accordance with the requirements of applicable law and UK-adopted International Accounting Standards ('UK IAS').
REVIEW OF THE BUSINESS
Pitombeiras Vanadium Project
During the year under review, the Company maintained its 100% ownership of the Pitombeiras Vanadium Project ('Pitombeiras' or 'the Project'), located in the state of Ceará, Brazil.
Further and as announced on 21 April 2022, the Company provided an updated technical report ('Technical Report') with the inclusion of the titanium component at its 100%-owned Pitombeiras Vanadium Titano-Magnetite ('VTM') Project ('the Project') in Ceará State, Brazil. The Technical Report was prepared by Brazilian based GE21 Consultoria Mineral ('GE21') and is compliant with National Instrument 43-101 ('NI 43-101'). The Technical Report supersedes the Preliminary Economic Assessment ('PEA') published in 2021. The financial figures include the production of vanadium pentoxide('V2O5') concentrate and titanium dioxide ('TiO2') and are summarised below:
· US$96.5 million NPV @ 8% discount rate
· 100.3% post-tax IRR
· US$415.2 million total gross revenue
· US$145.9 million post-tax, undiscounted operating cash flow
· Post-tax payback period of 13 months
· US$18.45 million CAPEX (US$2.25 million for TiO2)
· US$1.26 per tonne mined average operating cost
· US$19.39 per tonne of Fe V2O5 concentrate processed average operating cost
· US$12.48 per tonne of TiO2 processed average operating cost
Subsequent to the release of the Technical Report, the Company evaluated financing options to progress development but given the uncertainty of markets that prevailed throughout 2022, and have continued into 2023, no plans have yet been finalised.
As announced on 13 April 2023, tests were carried out regarding the extraction of high-grade TiO2 and V2O5 from the Project. The tests were carried out by Zambian consulting firm, YCS Sustainable Solutions Limited, utilising the proprietary technology developed by Fodere Titanium Limited, in which Jangada holds a 7.78% interest. The work is part of the Company's strategy to optimise the value of the Project by applying innovative processing technology while also improving its Environmental, Social and Governance ('ESG') credentials.
Five samples, delivered by Jangada from various locations at Pitombeiras, were crushed, homogenised, and milled. The samples were then subjected to magnetic separation. Preliminary test works concentrated the Fe2O3, TiO2 and V2O5 with all upgrading well and excellent recovery and purity rates reported, the highest recovery rates being 86.73% TiO2, 91.19% Fe2O3, and 95.88% V2O5.
The Directors note that there is an ongoing court case in respect of a land ownership dispute where the Pitombeiras project is located. The Group is not party to the lawsuit, and as such cannot be held liable from any claim arising from the case. The disputed ownership represents approximately 25% of the land covered by the mining license granted to the Group. The Group is authorised to develop its activities where the disputed land is located and has already conducted mineral research, exploration reports and has requested an extension of the Exploration Permit period, which has been granted by the National Mining Agency (Agencia Nacional de Minería). The Directors believe there to be no material impact on the operations of the Group, or the ongoing exploration at Pitombeiras.
ValOre Metals Corp
As announced in August 2019, the Company divested its 100% interest in Pedra Branca Brasil Mineração Ltda, the entity that held the Pedra Branca Project in Brazil, to ValOre Metals Corp (TSX-V:VO). The consideration received on the divestment was CAD$3,000,000 alongside the issue of 25,000,000 ValOre common shares to Jangada (of which 22,000,000 shares were received on completion and 3,000,000 deferred consideration shares were received over three years).
During the year, the Company sold part of the investment in ValOre to support its working capital requirements, allowing it to progress the development of Pitombeiras, including the technical reports and identification of a NI 43-101 compliant resource. At the end of the reporting year, the Company held 1,000,000 shares representing a 0.58% interest in ValOre's share capital.
Fodere Titanium Limited
As previously announced, the Company has made a strategic investment in Fodere Titanium Limited ("Fodere"), which continues to make excellent progress as it focuses on the production of titanium dioxide and vanadium from waste materials. Its highly energy efficient technology maximises resource recovery, improves processing effectiveness, reduces costs compared to regular processing routes and, minimises waste to improve environmental credentials and enhance corporate ESG performance.
Its pilot plant in South Africa is due to be operational in late 2023 targeting the production of concentrates including titanium dioxide, vanadium pentoxide along with alumina oxide and magnesium sulphate as by-products. Jeffry N. Quinn, the former head of Tronox, an international vertically integrated producer of titanium dioxide and inorganic chemicals, has joined the board of Fodere as a Director.
One of the Company's Non-Executive Directors, Nick von Schirnding, is Chairman of Fodere.
At the end of the reporting year, the Company held 1,774 shares being a 7.78% interest in Fodere's share capital.
Blencowe Resources PLC
Blencowe is advancing its Orom-Cross graphite project in Uganda where a Definitive Feasibility Study is on track to complete by the end of the year. The Project has a JORC resource of 24.5Mt @ 6.0% TCG based on drilling undertaken on less than 5% of the project area, part of which already benefits from a 21-year mining licence. The estimate of graphite is 2-3 billion tonnes. A Pre-Feasibility Study reported a Net Present Value of US$482m based on the existing 14-year mine life and outlined capex to first production of US$62m, average EBITDA of US$100m per annum and a return of US$1.1bn in free cash over the 14-year life.
Metallurgical testwork reported concentrate grades consistently ranging between 95-98%, which are battery grade. Further testing is underway in the USA and China and international funding negotiations are on-going. During the year, the Company purchased 16,550,000 shares in Blencowe Resources PLC (LSE: BRES) ('Blencowe') and paid £652,250 (USD 789,000) at £0.04 per share and received a further 7,625,000 warrants with an exercise price of £0.08 per share and expiry date of 31 October 2025. Blencowe holds a portfolio of key battery metals projects located in northern Uganda, see blencoweresourcesplc.com. Following a period of due diligence, the directors assessed that the Blencowe assets were being substantially undervalued by the market and we considered the investment to be a short to medium-term value accretive opportunity with exposure to both the graphite and nickel sulphide markets and consistent with Jangada's strategy of being involved in the development of "battery metals".
At the end of the reporting year, the Company held 20,050,000 shares being a 10.2% interest in Blencowe's share capital.
KEFI Gold and Copper PLC
During the year, the Company advanced an unsecured loan receivable of £200,000 (USD 242,000) to KEFI Gold and Copper Plc ('KEFI') for working capital requirements. The loan receivable is short-term in nature and carries a fixed rate of interest at 25%.
Post year end, the loan has been repaid in full by way of the issue of 35,714,285 shares in KEFI, equating to a holding currently of 0.756%.
Financial Results
The progress during the financial year of advancing the Pitombeiras project resulted in the Group incurring an Operating Loss from Continuing Operations of $0.9 million (2021: profit of $0.1 million). Overall, the reported Total Comprehensive Loss attributable to the Group for the reporting year was $1.3 million (2021: $0.3 million).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
|
|
| Year ended | Year ended |
|
| | 2022 | 2021 |
|
| | $'000 | $'000 |
| Other Income |
| | |
| (Loss)/gain on fair value of investment |
| (270) | 340 |
| Profit on disposal of investment |
| 68 | 1,743 |
| Interest from short term loans |
| 62 | - |
| Total Other Income |
| (140) | 2,083 |
| Directors' remuneration | 9 | (355) | (379) |
| Share based payments - directors | 9 | - | (533) |
| Impairment of investments | 13 | - | (211) |
| Foreign exchange gain | | 223 | 31 |
| Administration expenses | | (663) | (895) |
| Operating (loss)/profit from continuing operations |
| (935) | 96 |
| Finance expense | 6 | (1) | (4) |
| (Loss)/profit before tax |
| (936) | 92 |
| Tax expense | 7 | - | - |
| (Loss)/profit from continuing operations |
| (936) | 92 |
| Other comprehensive income: |
| | |
| Items that will or may be reclassified to profit or loss: |
| | |
| Currency translation differences arising on translation of foreign operations |
| (392) | (354) |
| Total comprehensive loss attributable to owners of the parent |
| (1,328) | (262) |
|
|
| | |
|
(Loss)/profit per share from (loss)/profit from continuing operations attributable to the ordinary equity holders of the Company during the year |
|
Cents |
Cents |
|
- Basic (cents) |
8 |
(0.36) |
0.04 |
| - Diluted (cents) | 8 | (0.36) | 0.04 |
|
(Loss)/profit per share attributable to the ordinary equity holders of the Company during the year |
|
Cents |
Cents |
|
- Basic (cents) |
8 |
(0.36) |
0.04 |
| - Diluted (cents) | 8 | (0.36) | 0.04 |
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2022
|
|
| As at | As at |
|
| | 2022 | 2021 |
| Assets | | $'000 | $'000 |
| Non-current assets |
| | |
| Exploration and evaluation assets | 11 | 1,210 | 1,019 |
| Property, plant and equipment |
| 4 | 4 |
| Investments | 13 | 2,081 | 1,331 |
| |
| 3,295 | 2,354 |
| Current assets |
| | |
| Other receivables | 14 | 302 | 450 |
| Cash and cash equivalents |
| 1,397 | 3,589 |
| |
| 1,699 | 4,039 |
| Total assets |
| 4,994 | 6,393 |
|
|
| | |
| Liabilities |
| | |
| Current liabilities |
| | |
| Trade payables |
| 21 | 6 |
| Accruals and other payables | 15 | 113 | 53 |
| Total liabilities |
| 134 | 59 |
|
|
| | |
| Issued capital and reserves attributable to owners of the parent |
| | |
| Share capital | 16 | 135 | 135 |
| Share premium | 16 | 5,959 | 5,959 |
| Translation reserve | | (754) | (362) |
| Option reserve | 17 | 709 | 734 |
| Fair value reserve | | 38 | 38 |
| Retained earnings | | (1,227) | (170) |
| Total equity |
| 4,860 | 6,334 |
| Total equity and liabilities |
| 4,994 | 6,393 |
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2022
|
|
| As at | As at |
|
| | 2022 | 2021 |
| Assets | | $'000 | $'000 |
| Non-current assets |
| | |
| Investment in subsidiary | 12 | 1,602 | 1,502 |
| Investments | 13 | 2,081 | 1,331 |
|
|
| 3,683 | 2,833 |
| Current assets |
| | |
| Other receivables | 14 | 302 | 450 |
| Cash and cash equivalents |
| 1,363 | 3,499 |
| |
| 1,665 | 3,949 |
| Total assets |
| 5,348 | 6,782 |
|
|
| | |
| Liabilities |
| | |
| Current liabilities |
| | |
| Trade payables |
| 16 | 6 |
| Accruals and other payables | 15 | 113 | 53 |
| Total liabilities |
| 129 | 59 |
|
|
| | |
| Issued capital and reserves attributable to owners of the parent |
| | |
| Share capital | 16 | 135 | 135 |
| Share premium | 16 | 5,959 | 5,959 |
| Translation reserve |
| (1,556) | (880) |
| Option reserve | 17 | 709 | 734 |
| Retained earnings |
| (28) | 775 |
| Total equity |
| 5,219 | 6,723 |
| Total equity & liabilities |
| 5,348 | 6,782 |
The loss for the year under review for the parent company, Jangada Mines plc, was $682,168 (2021: profit of $165,681). As permitted under Section 408 of the Companies Act 2006, no Income Statement or Statement of Comprehensive Income is presented for the parent company.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
|
|
| Year ended | Year ended |
|
| | 2022 | 2021 |
| Cash flows from operating activities |
| $'000 | $'000 |
| (Loss)/profit before tax | | (936) | 92 |
| Add back: Depreciation | |
1 |
- |
| Cash proceeds on sale of investment | | (68) | - |
| Cash proceeds on sale of subsidiary | | - | (1,743) |
| Non-cash interest from short term loans | | (62) | - |
| Fair value loss/(gain) in investments | | 270 | (228) |
| Non-cash exchange differences | | (223) | (31) |
| Non-cash share option charge | | - | 683 |
| Non-cash shares issued in lieu of fees |
| - | (58) |
| Non-cash impairment of investments |
| - | 211 |
| Decrease in other receivables | | 20 | (104) |
| Decrease in trade and other payables | | 75 | 70 |
| Net cash flows used in operating activities |
| (923) | (1,108) |
|
| | | |
| Investing activities |
| | |
| Development of exploration and evaluation assets | | (74) | (468) |
| Purchase of plant, property and equipment | | - | (3) |
| Sale of shares in investments | | 150 | 3,870 |
| Purchase of shares in investments | | (870) | (741) |
| Advance of loan receivable | | (246) | - |
| Net cash inflows (used in)/from investing activities |
| (1,040) | 2,658 |
|
| | | |
| Financing activities |
| | |
| Share capital issue |
| - | 1,520 |
| Exercise of options |
| - | 70 |
| Cancellation of options | 17 | (102) | - |
| Net cash flows from financing activities |
| (102) | 1,590 |
|
| | | |
| Net movement in cash and cash equivalents |
| (2,065) | 3,140 |
| Cash and cash equivalents at beginning of year |
| 3,589 | 513 |
| Movements in foreign exchange | | (127) | (64) |
| Cash and cash equivalents at end of year |
| 1,397 | 3,589 |
COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
|
|
| | Year ended | Year ended |
| Cash flows from operating activities |
| | $'000 | $'000 |
| (Loss)/profit before tax | | | (682) | 165 |
| Cash proceeds on sale of investment | | | (68) | - |
| Cash proceeds on sale of subsidiary | | | - | (1,743) |
| Non-cash interest from short term loans | | | (62) | - |
| Fair value loss/(gain) in investments | | | 270 | (228) |
| Non-cash exchange differences | | | (383) | (31) |
| Non-cash share option charge | | | - | 683 |
| Non-cash shares issued in lieu of fees |
| | - | (58) |
| Non-cash impairment of investments | | | - | 211 |
| Decrease in other receivables | | | 20 | (99) |
| (Increase)/decrease in trade and other payables | | | 70 | 52 |
| Net cash flows used in operating activities |
| | (835) | (1,048) |
|
| | | | |
| Investing activities |
| | | |
| Sale of shares in investments |
| | 150 | 3,870 |
| Purchase of shares in investment |
| | (870) | (741) |
| Advance of loan receivable |
| | (246) | - |
| Net cash flow (used in)/from investing activities |
| | (966) | 3,129 |
|
|
| |
|
|
| Financing activities |
| | | |
| Share capital issue |
| | - | 1,520 |
| Cost of issuing share capital |
| | - | 70 |
| Increase in related party borrowings | | | (101) | (690) |
| Cancellation of options | 17 | | (102) | - |
| Net cash (used in)/from financing activities |
| | (203) | 900 |
|
| | | | |
| Net movement in cash and cash equivalents |
| | (2,004) | 2,981 |
| Cash and cash equivalents at beginning of year |
| | 3,499 | 447 |
| Movements in foreign exchange | | | (132) | 71 |
| Cash and cash equivalents at end of year |
| | 1,363 | 3,499 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
| | Share | Share | Translation | Fair Value | Option | Retained | Total |
|
| capital | premium | reserve | reserve | reserve | earnings | equity |
|
| $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
|
|
|
|
|
|
|
|
|
| As at 1 January 2021 | 126 | 4,389 | (8) | 38 | - | (262) | 4,283 |
|
| | | | | | | |
| Comprehensive loss for the year | | | | | | | |
| Profit for the year | - | - | - | - | - | 92 | 92 |
| Other comprehensive income | - | - | (354) | - | - | - | (354) |
| Total comprehensive loss for the year | - | - | (354) | - | - | 92 | (262) |
|
| | | | | | | |
| Transactions with owners |
| | | | | | |
| Shares issued | 8 | 1,732 | - | - | - | - | 1,740 |
| Share issue costs charged to share premium | - | (232) | - | - | - | - | (232) |
| Share options exercised | 1 | 70 | - | - | - | - | 71 |
| Share options issued | - | - | - | - | 734 | - | 734 |
| Total transactions with owners | 9 | 1,570 | - | - | 734 | - | 2,313 |
|
| | | | | | | |
| As at 31 December 2021 | 135 | 5,959 | (362) | 38 | 734 | (170) | 6,334 |
|
| | | | | | | |
| | | | | | | | |
| Comprehensive loss for the year |
| | | | | | |
| Loss for the year | - | - | - | - | - | (936) | (936) |
| Other comprehensive income | - | - | (392) | - | - | - | (392) |
| Total comprehensive loss for the year | - | - | (392) | - | - | (936) | (1,328) |
|
| | | | | | | |
| Transactions with owners |
| | | | | | |
| Share options surrendered | - | - | - | - | (25) | (121) | (146) |
| Share options expensed | - | - | - | - | - | - | - |
| Total transactions with owners | - | - | - | - | (25) | (121) | (146) |
|
| | | | | | | |
| As at 31 December 2022 | 135 | 5,959 | (754) | 38 | 709 | (1,227) | 4,860 |
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
| | Share | Share | Translation | Option | Retained | Total equity |
| ||||
|
| capital | Premium | reserve | reserve | earnings | attributable to owners |
| ||||
|
| $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
| ||||
|
| | | | | | |
| ||||
| As at 1 January 2021 | 126 | 4,389 | 30 | - | 610 | 5,155 |
| ||||
|
| | | | | | |
| ||||
| Comprehensive loss for the year |
| | | | | |
| ||||
| Profit for the year | - | - | - | - | 165 | 165 |
| ||||
| Other comprehensive income | - | - | (910) | - | - | (910) |
| ||||
| Total comprehensive income for the year | - | - | (910) | - | 165 | (745) |
| ||||
|
| | | | | | |
| ||||
| Transactions with owners |
| | | | | |
| ||||
| Share issued | 8 | 1,732 | - | - | - | 1,740 |
| ||||
| Share issue costs charged to share premium | - | (232) | - | - | - | (232) |
| ||||
| Share options exercised | 1 | 70 | - | - | - | 71 |
| ||||
| Share options issued | - | - | - | 734 | - | 734 |
| ||||
| Total transactions with owners | 9 | 1,570 | - | 734 | - | 2,313 |
| ||||
|
| | | | | | |
| ||||
| As at 31 December 2021 | 135 | 5,959 | (880) | 734 | 775 | 6,723 |
| ||||
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
| ||||
| Comprehensive loss for the year |
| | | | | |
| ||||
| Loss for the year | - | - | - | - | (682) | (682) |
| ||||
| Other comprehensive income | - | - | (676) | - | - | (676) |
| ||||
| Total comprehensive loss for the year | - | - | (676) | - | (682) | (1,358) |
| ||||
|
| | | | | | |
| ||||
| Transactions with owners |
| | | | | |
| ||||
| Share options surrendered | - | - | - | (25) | (121) | (146) |
| ||||
| Share options expensed | - | - | - | - | - | - |
| ||||
| Total transactions with owners | - | - | - | (25) | (121) | (146) |
| ||||
|
| | | | | | |
| ||||
| As at 31 December 2022 | 135 | 5,959 | (1,556) | 709 | (28) | 5,219 |
| ||||
|
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NOTES TO THE FINANCIAL STATEMENTS
For the YEAR ended 31 December 2022
| 1. | General information |
The Company is a public limited company limited by shares, incorporated in England and Wales on 30 June 2015 with the registration number 09663756 and with its registered office at Eastcastle House 27-28, Eastcastle Street, London W1W 8DH, United Kingdom.
The nature of the Company's operations and its principal activities are set out in the Strategic Report and the Report of the Directors on pages 4 and 15 respectively in the Annual Report & Accounts.
| 2. | Accounting policies |
Basis of preparation and going concern basis
These financial statements have been prepared on a historical cost basis in accordance with UK-adopted International Accounting Standards and applicable law, in line with International Financial Reporting Standards (IFRS) and IFRIC interpretations issued by the International Accounting Standards Board (IASB) adopted by the European Union and in accordance with applicable UK Law. The adoption of all of the new and revised Standards and Interpretations issued by the IASB and the IFRIC of the IASB that are relevant to the operations and effective for annual reporting periods beginning on 1 July 2019 are reflected in these financial statements.
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income, and expenses. The estimates and associated assumptions are based on historical experience and factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The consolidated financial information is presented in United States Dollars ($).
The functional currency of the subsidiary, VTF Mineração Ltda is Brazilian Real. The functional of the Company is British Pounds Sterling (GBP). Amounts are rounded to the nearest thousand ($'000), unless otherwise stated.
The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates may be necessary if there are changes in the circumstances on which the estimate was based, or as a result of new information or more experience. Such changes are recognised in the period in which the estimate is revised.
The Group's business activities together with the factors likely to affect its future development, performance and position are set out on pages 4 to 15. In addition, note 4 to the Financial Statements includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposure to credit and liquidity risk.
The Financial Statements have been prepared on a going concern basis. Although the Group's assets are not generating revenues and an operating loss has been reported from its continued operations, the Directors consider that the Group has sufficient funds to undertake its operating activities for a period of at least the next 12 months including any additional expenditure required in relation to its current exploration projects. The Group has cash reserves which are considered sufficient by the Directors to fund the Group's committed expenditure both operationally and on its exploration project for the foreseeable future. However, as additional projects are identified and the Pitombeiras project moves towards production, additional funding will be required.
As discussed in the Directors' report, the directors do not consider there to be a material uncertainty, which may cast doubt about the Group and Company's ability to continue as a going concern. Given the proceeds from the sale of the Pedra Branca project and based on the Group's planned expenditure on the Pitombeiras vanadium deposit and the Group's working capital requirements, the Directors have a reasonable expectation that the Group will have adequate resources to meet its capital requirements for the foreseeable future. For that reason, the Directors have concluded that the financial statements should be prepared on a going concern basis.
Changes in accounting principles and adoption of new and revised standards
In the year ended 31 December 2022, the Directors have reviewed all the new and revised Standards issued that are relevant to the Group's operations and effective for the current reporting period.
The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 31 December 2022. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group's business and, therefore, no change is necessary to the Group accounting policies.
New and amended accounting standards and interpretations have been published but are not mandatory. The Group has decided against early adoptions of these standards and has determined the potential impact on the financial statements from the adoption of these standards and interpretations is not material to the Group.
Basis of Consolidation
Subsidiaries
The subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continues to be consolidated until the date that such control ceases. The Company has control over a subsidiary if all three of the following elements are present:
· Power over the investee,
· exposure to variable returns from the investee, and
· the ability of the investor to use its power to affect those variable returns.
Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.
The financial information of the subsidiary is prepared for the same reporting year as the parent company, using consistent accounting policies and is consolidated using the acquisition method. Intra-group balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Business combinations
The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition of a business is the fair value of the assets transferred, liabilities incurred, and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement.
Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at their fair values at the acquisition date. A business is an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs, or other economic benefits.
A business consists of inputs and processes applied to those inputs that have the ability to create outputs that provide a return to the Company and its shareholders.
A business need not include all of the inputs and processes that were used by the acquiree to produce outputs if the business can be integrated with the inputs and processes of the Company to continue to produce outputs.
If the integrated set of activities and assets is in the exploration and development stage, and thus, may not have outputs, the Company considers other factors to determine whether the set of activities and assets is a business. Those factors include, but are not limited to, whether the set of activities and assets:
· Has begun planned principal activities;
· Has employees, intellectual property and other inputs and processes that could be applied to those inputs;
· Is pursuing a plan to produce outputs; and
· Will be able to obtain access to customers that will purchase the outputs.
Foreign currency
Transactions entered into by the Group in a currency other than the currency of its primary economic environment in which it operates (the "functional currency") are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences are taken to the Statement of Comprehensive Income.
Financial instruments
Financial instruments are measured as set out below. Financial instruments carried on the statement of financial position include cash and cash equivalents, trade and other receivables, investments, trade and other payables and loans to group companies.
Financial instruments are initially recognised at fair value when the group becomes a party to their contractual arrangements. Transaction costs directly attributable to the instrument's acquisition or issue are included in the initial measurement of financial assets and financial liabilities, except financial instruments classified as at fair value through profit or loss ('FVTPL'). The subsequent measurement of financial instruments is dealt with below.
Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes party to the contractual provisions of the instrument.
Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities, for which fair value is measured or disclosed in the Financial Statements, are categorised within the fair value hierarchy, described as follows, based on the lowest-level input that is significant to the fair value measurement as a whole:
Level 1 - quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2 - valuation techniques for which the lowest-level input that is significant to the fair value measurement is directly or indirectly observable; and
Level 3 - valuation techniques for which the lowest-level input that is significant to the fair value measurement is unobservable.
Financial assets
All the Group's financial assets are held within a business model whose objective is to collect contractual cash flows which are solely payments of principals and interest and therefore classified as subsequently measured at amortised cost. Group's financial assets include cash and cash equivalents, Company's financial assets include cash and other receivables. The Group assesses on a forward-looking basis, the expected credit losses, defined as the difference between the contractual cash flows and the cash flows that are expected to be received.
Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.
Financial liabilities
Financial liabilities are classified as either financial liabilities at fair value through profit and loss (FVTPL) or as other financial liabilities. The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged or cancelled, or they expire.
Financial liabilities are classified at FVTPL when the financial liability is either held for trading or it is designated at FVTPL. A financial liability is classified as held for trading if it has been incurred principally for the purpose of repurchasing it in the near term or is a derivative that is not a designated or effective hedging instrument.
Financial liabilities at FVTPL are measured at fair value, with any gains or losses arising on changes in fair value recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Exploration and evaluation assets
Costs capitalised in respect of the Group's development and production assets are required to be assessed for impairment under the provisions of IAS 36. Such an estimate requires the Group to exercise judgement in respect of the indicators of impairment and in respect of inputs used in the models which are used to support the carrying value of the assets.
Such inputs include costs of exploration work, studies, field costs, government fees and the associated support costs. The directors concluded there were no impairment indicators in the current year. Therefore, no impairment to the carrying value of the Pitombeiras asset was considered necessary.
Costs incurred prior to obtaining the legal rights to explore an area are expensed immediately to the Statements of Profit or Loss and Other Comprehensive Income. Only material expenditures incurred after the acquisition of a licence interest are capitalised.
Share Options - estimates and assumptions
The fair value of options and warrants granted to directors and others in respect of services provided is recognised as an expense in the Statement of Comprehensive Income with a corresponding increase in equity reserves.
Taxation
The charge for current tax is based on the taxable income for the year. The taxable result for the year differs from the result as reported in the statement of comprehensive income because it excludes items which are not assessable or disallowed and it further excludes items that are taxable and deductible in other years. It is calculated using tax rates that have been enacted or substantially enacted by the statement of financial position date.
Investments
Investments are carried at fair value. Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the audited consolidated balance sheet differs from its tax base. Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
3. | Critical accounting estimates and judgements
|
The preparation of the Financial Statements in conformity with IFRSs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of the reporting year and the reported amount of expenses during the year. Actual results may vary from the estimates used to produce these Financial Statements.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant items subject to such judgements and estimates include, but are not limited to:
Judgements
The Directors have considered the criteria of IFRS 6 regarding the impairment of exploration and evaluation assets and have decided based on this assessment that there is no basis to impair the carrying value of its exploration assets in respect to the Pitombeiras project (2022: $1,210,000, 2021: $1,019,000) at this time.
Estimates and assumptions
Share based payments
Share options issued by the Group relates to the Jangada Plc Share Option Plan. The grant date fair value of such options is calculated using a Black-Scholes model whose input assumptions are derived from market and other internal estimates. The key estimates include volatility rates and the expected life of the options, together with the likelihood of non-market performance conditions being achieved. Refer note 17.
On exercise or cancellation of share options and warrants, the proportion of the share-based payment reserve relevant to those options and warrants is transferred from other reserves to the accumulated deficit. On exercise, equity is also increased by the amount of the proceeds received. The fair value is measured at grant date charged in the accounting year during which the option and warrants becomes unconditional.
The fair value of options and warrants are calculated using the Black-Scholes model, taking into account the terms and conditions upon which the options and warrants were granted. Vesting conditions are non-market and there are no market vesting conditions. These vesting conditions are included in the assumptions about the number of options and warrants that are expected to vest. At the end of each reporting year, the Company revises its estimate of the number of options and warrants that are expected to vest. The exercise price is fixed at the date of grant and no compensation is due at the date of grant. Where equity instruments are granted to
persons other than employees, the statement of comprehensive income is charged with the fair value of the goods and services received. Please refer to note 17.
Company - Application of the expected credit loss model prescribed by IFRS 9
IFRS 9 requires the Parent company to make assumptions when implementing the forward-looking expected credit loss model. This model is required to be used to assess the intercompany loan receivables from the company's Brazilian subsidiaries for impairment.
Arriving at the expected credit loss allowance involved considering different scenarios for the recovery of the intercompany loan receivables, the possible credit losses that could arise and the probabilities for these scenarios. The following was considered; the exploration project risk for Pitombeiras, positive NPV of the Pitombeiras project as demonstrated by the Feasibility Study, ability to raise the finance to develop the projects, ability to sell the projects, market and technical risks relating to the project. The Directors therefore considered that there was no impairment of the subsidiary loan (2021: nil).
| 4. | Financial instruments - Risk Management |
The Company is exposed through its operations to the following financial risks:
· Credit risk;
· Liquidity risk;
· Fair value measurement risk; and
· Foreign exchange risk.
Credit risk
Credit risk arises from cash and cash equivalents and outstanding receivables. The Group maintains cash and short-term deposits with a variety of credit worthy financial institutions and considers the credit ratings of these institutions before investing in order to mitigate against the associated credit risk.
The Group's exposure to credit risk amounted to $1,699,000 (2021: $4,039,000). Of this amount, $1,397,000 represents the Group's cash holdings (2021: $3,589,000).
The directors monitor the utilisation of the credit limits regularly and at the reporting date does not expect any losses from non-performance by the counterparties.
Liquidity risk
In keeping with similar sized mining exploration groups, the Group's continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital. The Group monitors its cash and future funding requirements through the use of cash flow forecasts.
The Company's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due.
In common with all other businesses, the Company is exposed to risks that arise from its use of financial instruments.
Fair value measurement risk
The following tables detail the Group's assets and liabilities measured or disclosed at fair value using a three-level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date
- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
- Level 3: Unobservable inputs for the asset or liability
|
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|
There were no transfers between levels during the financial year.
|
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Brazilian Real, US Dollar and the Pound Sterling.
Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations that are denominated in a foreign currency. The Group holds a proportion of its cash in GBP and Brazilian Reals to hedge its exposure to foreign currency fluctuations and recognises the profits and losses resulting from currency fluctuations as and when they arise. The volume of transactions is not deemed sufficient to enter forward contracts.
|
|
| |
|
| As at | As at | |
|
| 31 December | 31 December | |
|
| 2022 | 2021 | |
|
| $'000 | $'000 | |
| Financial assets |
|
| |
| Cash and cash equivalents | 1,397 | 3,589 | |
| Other receivables | 302 | 450 | |
| Investments - At FVTPL | 2,081 | 1,331 | |
| Total financial assets | 3,780 | 5,370 |
|
|
|
|
|
| As at | As at |
|
| 31 December | 31 December |
|
| 2022 | 2021 |
|
| $'000 | $'000 |
| Financial liabilities |
|
|
| Trade payables | 21 | 6 |
| Accruals and other payables | 113 | 53 |
| Total financial liabilities | 134 | 59 |
|
|
|
|
|
| As at | As at |
|
| 31 December | 31 December |
|
| 2022 | 2021 |
|
| $'000 | $'000 |
| US Dollar | - | - |
| Brazilian Real | 4 | 1 |
| Pound Sterling | 130 | 58 |
| | 134 | 59 |
The potential impact of a 10% movement in the exchange rate of the currencies to which the Group is exposed is shown below:
| | 2022 | 2021 |
|
| $'000 | $'000 |
| Foreign currency risk sensitivity analysis |
| |
| | | |
| Brazilian Real |
| |
| Strengthened by 10% | - | - |
| Weakened by 10% | - | - |
| | | |
| Pound Sterling |
| |
| Strengthened by 10% | 269 | 351 |
| Weakened by 10% | (329) | (429) |
Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, to provide returns for shareholders and to enable the Group to continue its exploration and evaluation activities. The Group has only short-term trade payables and accruals at 31 December 2022 and defines capital based on the total equity of the Group. The Group monitors its level of cash resources available against future planned exploration and evaluation activities and may issue new shares to raise further funds from time to time.
There were no changes in the Company's approach to capital management during the year. The Company is not subject to externally imposed capital requirements.
General objectives, policies and processes
The board of directors has overall responsibility for the determination of the Company's risk management objectives and policies. The overall objective of the board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company's competitiveness and flexibility.
Principal financial instruments
The principal financial instrument used by the Company, from which financial instrument risk arises, is related party borrowings.
| 5. | Segment information |
The Company evaluates segmental performance on the basis of profit or loss from operations calculated in accordance with IFRS 8. In the Directors' opinion, the Group only operates in one segment being mining services. All non-current assets have been generated in Brazil.
| 6. | Finance expense |
| ||||||
|
|
| Year ended 31 December 2022 | Year ended 31 December 2021 | |||||
|
|
| $'000 | $'000 | |||||
|
|
| | | |||||
|
| Interest expense | (1) | (4) | |||||
|
| Total finance expense | (1) | (4) | |||||
|
| | | | |||||
| 7. | Tax expense |
| ||||||
|
| Year ended 31 December 2022 | Year ended 31 December 2021 | ||||||
|
| $'000 | $'000 | ||||||
|
|
|
| ||||||
| (Loss)/profit on ordinary activities before tax | (936) | 92 |
| |||||
| | | |
| |||||
| (Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021: 19%) | (178) | 17 |
| |||||
| | | |
| |||||
| Effects of: |
| |
| |||||
| Unrelieved tax losses carried forward | 178 | (17) |
| |||||
| | | |
| |||||
| Total tax charge for the year | - | - |
| |||||
Factors that may affect future tax charges
Apart from the losses incurred to date and the fact that from April 2023 the UK corporation tax rate has risen to 25%, there are no factors that may affect future tax charges. At the year end, $3,939,000 (2021: $5,571,000) of cumulative estimated unrelieved tax losses arose in Brazil and the United Kingdom, which could be utilised in the foreseeable future.
| 8. | Loss per share |
|
|
| ||||||||||||
| | 31 December 2022 | 31 December 2021 |
| |||||||||||||
|
|
|
| $'000 | $'000 |
| |||||||||||
|
| | | | |
| |||||||||||
| (Loss)/profit for the year | | | (936) | 92 |
| |||||||||||
| | | | | | | |
| |||||||||
| | | | 2022 | | 2021 |
| ||||||||||
| Weighted average number of shares (basic & diluted) |
258,602,032 |
254,618,055 |
| |||||||||||||
| | ||||||||||||||||
| (Loss)/earnings per share - basic & diluted (US 'cents) | | (0.36) | | 0.04 |
| |||||||||||
There have been no transactions involving ordinary shares or potential ordinary shares that would significantly change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the date of completion of these financial statements.
| 9. | Staff costs and directors' remuneration |
|
|
Staff costs, including directors' remuneration, were as follows:
| | Monetary | Share |
| |
| | remuneration | Options1 | Total | Total |
|
| Year ended 31 December 2022 | Year ended 31 December 2022 | Year ended 31 December 2022 | Year ended 31 December 2021 |
|
| $'000 | $'000 | $'000 | $'000 |
|
| | | | |
| B K McMaster | 222 | - | 222 | 469 |
| L M F De Azevedo | 74 | - | 74 | 316 |
| N K von Schirnding | 59 | - | 59 | 127 |
| | 355 | - | 355 | 912 |
1 - Refer to note 17 for options details.
Excluding directors, there was one member of staff during the year ended 31 December 2022 (2021: one). Excluding directors' remuneration, staff costs during the year were salaries $27,000 (2021: $5,000), social security $5,000 (2021: $1,000), other benefits $nil (2021: $nil). As at the year end, $30,000 (2021: $20,000) of Director's Remuneration for L M F De Azevedo was accrued but not yet settled.
| 10. | Auditor's remuneration |
| | Year ended 31 December 2022 | Year ended 31 December 2021 | ||
|
| $'000 | $'000 | ||
|
| | | ||
| Fees payable to the Company's auditor and its associates for the audit of the Company's annual accounts | 52 | 34 | ||
| Fees payable for other services: | | | ||
| - High level review of interim financial statements | 2 | - | ||
| Total auditor remuneration | | | 54 | 34 |
| 11. | Exploration and evaluation assets |
|
|
|
| As at 31 December 2022 | As at 31 December 2021 |
|
|
|
| $'000 | $'000 |
| Cost and net book value | | | | |
| At beginning of year | | | 1,019 | 550 |
| Expenditure capitalised during the year | | | 191 | 469 |
| Cost and net book value at 31 December | | | 1,210 | 1,019 |
The Directors have concluded that there are no impairment indicators at the year end. Further details can be found in Note 2: Accounting policies - Exploration and evaluation assets.
|
|
12. |
Investment in subsidiary | ||
|
| As at 31 December 2022 | As at 31 December 2021 | ||
| Company | $'000 | $'000 | ||
| Shares in subsidiary | 1 | 1 | ||
| Contribution to capital | 1,601 | 1,501 | ||
| Total | 1,602 | 1,502 | ||
The Directors have conducted an impairment review and are satisfied that the carrying value of $1,602,000 is reasonable and no impairment is necessary (2021: US$ nil).
|
| 13. | Investments - At FVTPL | ||
| | As at 31 December 2022 | As at 31 December 2021 | ||
| | $'000 | $'000 | ||
| Investment in ValOre Metals Corp | 203 | 215 | ||
| Investment in Fodere Titanium Limited | 976 | 1,091 | ||
| Investment in Blencowe Resources Plc | 1,030 | 236 | ||
| Investment in Axies Ventures Limited | 60 | - | ||
| Impairment in Investments | (188) | (211) | ||
| Carrying amount of investments | 2,081 | 1,331 | ||
During the year, the Company received the fifth and sixth tranches of 500,000 Deferred Consideration Shares in ValOre Metals Corp in February 2022 and August 2022. Currently, the Company has a 0.58% interest in ValOre's share capital. The investment is carried at fair value with any changes recognised through profit and loss.
The Company holds shares in the share capital of Fodere Titanium Limited, which is a United Kingdom registered minerals technology company which has developed innovative processes for the titanium, vanadium, iron and steel industries. Currently, the Company has a 7.78% interest in Fodere's share capital. The investment is carried at fair value with any changes recognised through profit and loss and this has resulted in the Company recognising an impairment loss in the investment of $nil (2021: $211,000), which has been recognised as an expense in the statement of comprehensive income. Movements in the investment during the year are the effects of foreign exchange translations.
During the year, the Company purchased a further 16,550,000 shares in Blencowe Resources Plc, which it paid £652,250 (USD 789,000) at £0.04 per share and received a further 7,625,000 warrants with an exercise price of £0.08 per share and expiry date of 31 October 2025. At the end of the year, the Company had a 10.2% interest in Blencowe's share capital, which is a United Kingdom registered natural resources company focused on the development of the Orom-Cross Graphite Project in Uganda. The investment is carried at fair value with any changes recognised through profit and loss.
The Group measures these Investments at fair value, using a three-level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement. Further details are available in Note 4: Financial Instruments - Risk Management.
| 14. | Other receivables |
| | Group | Group |
| Company | Company | |
|
| As at 31 December 2022 | As at 31 December 2021 |
| As at 31 December 2022 | As at 31 December 2021 | |
|
| $'000 | $'000 |
| $'000 | $'000 | |
| Current |
|
|
|
| | |
| Other receivables | - | 20 | | - | 20 | |
| Accrued income | - | 430 | | - | 430 | |
| Loan receivable | 302 | - | | 302 | - | |
| Total other receivables | 302 | 450 |
| 302 | 450 | |
Accrued income totalling $nil (2021: $430,000) relating to the disposal of Pedra Branca being nil (2021: 1,000,000) Deferred Consideration Shares in ValOre with fair value determined to be $nil (2021: $430,000) at the balance sheet date.
During the year, the Company advanced an unsecured loan receivable of £200,000 (USD 242,000) to KEFI Gold and Copper Plc for working capital requirements. The loan receivable is short-term in nature and carries a fixed rate of interest at 25%. Post year end, the loan has been repaid in full by the issue of 35,714,285 shares in KEFI as noted earlier in this report.
| 15. Accruals and other payables |
| | Group | Group |
|
| Company | Company |
| | As at 31 December 2022 | As at 31 December 2021 |
|
| As at 31 December 2022 | As at 31 December 2021 |
| | $'000 | $'000 | | | $'000 | $'000 |
| Current | | | | | | |
| Accruals | 83 | 33 | | | 83 | 33 |
| Amounts owed to Directors | 30 | 20 | | | 30 | 20 |
| Total accruals and other payables | 113 | 53 |
|
| 113 | 53 |
| 16. | Share capital |
| |||||||
|
| | 31 December 2022 | 31 December 2021 | ||||||
|
|
| Issued | Share Capital | Share premium | Issued | Share Capital | Share premium | ||
|
|
| Number | $'000 | $'000 | Number | $'000 | $'000 | ||
|
| | | | | | | | ||
|
| At beginning of the year ordinary shares of 0.04p each: | 258,602,032 | 135 | 5,959 | 242,113,144 | 126 | 4,389 | ||
|
| | | | | | | | ||
|
| 19 February 2021: shares issued as part of placement | - | - | - | 13,888,888 | 8 | 1,732 | ||
|
| 30 March 2021: shares issued upon exercise of options | - | - | - | 2,600,000 | 1 | 70 | ||
|
| Share issue costs charged to share premium | - | - | - | - | - | (233) | ||
|
| | | | | | | | ||
|
| At 31 December: ordinary shares of 0.04p each: | 258,602,032 | 135 | 5,959 | 258,602,032 | 135 | 5,959 | ||
Ordinary shares
Ordinary shares have the right to receive dividends as declared and, in the event of a winding up of the Company, to participate in the proceeds from sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the Company.
| 17. | Share options and warrants |
|
| | Average exercise price per share option | Year ended 31 December 2022 Number of options | Average exercise price per share option | Year ended 31 December 2021 Number of options |
| At the beginning of the year | - | 37,844,444 | - | 9,000,000 |
| Warrants issued 19 February 2021 | - | - | 0.09 | 694,444 |
| Surrendered share options 3 March 2021 | - | - | 0.02 | (250,000) |
| Share Options exercised 30 March 2021 | - | - | 0.02 | (2,600,000) |
| Share warrants issued 10 August 2021 | - | - | 0.08 | 1,000,000 |
| Share options issued 10 August 2021 | - | - | 0.08 | 30,000,000 |
| Share options surrendered 17 January 2022 | 0.02 | (3,000,000) | - | - |
| At the end of the year |
| 34,844,444 |
| 37,844,444 |
On 17 January 2022, the Company entered into an agreement whereby an option holder agreed to surrender 3,000,000 options, with a grant date of 1 December 2019 and an expiry date of 1 December 2024 with an exercise price £0.02 per option share, for consideration of £105,000 (USD$129,354). The amounts were payable in 15 equal monthly instalments of £7,000 (USD$8,624). On the same date the options were cancelled by the Company. As at the date of this report 12 of the monthly instalments have been paid in the current reporting year and the remaining 3 instalments were paid in the subsequent reporting year.
|
|
|
| ||||
|
|
|
| As at 31 December 2022 | As at 31 December 2021 | ||
|
|
|
| $'000 | $'000 | ||
| Share based payments reserve | | | | | ||
| At beginning of year | | | 734 | - | ||
| Share based payments surrendered | | | (25) | - | ||
| Share based payments expense1 | | | - | 734 | ||
| Closing balance at 31 December | | | 709 | 734 | ||
1 For the year ended 31 December 2022, the Directors have estimated that the vesting conditions related to 20,250,000 director and employee options cannot be achieved. Therefore, $nil (2021: $0.7m) expense has been recognised in the Statement of Comprehensive Income.
Share options and warrants outstanding at the end of the year have the following expiry date and exercise prices:
|
Grant date |
Expiry date |
Exercise price £ | Share options/warrants 31 December 2022 | Share options/warrants 31 December 2021 | |
| 1 December 2019 | 30 November 2024 | 0.02 | 3,150,000 | 6,150,000 |
|
| 19 February 2021 | 19 February 2024 | 0.09 | 694,444 | 694,444 |
|
| 10 August 2021 | 10 August 2025 | 0.08 | 31,000,000 | 31,000,000 |
|
The fair value at grant date is independently determined using an adjusted form of the Black Scholes Model that takes into account the exercise price, the term of the option, the impact of dilution (where material), the share price at grant date and expected price volatility of the underlying share, the expected dividend yield, the risk-free interest rate for the term of the option and the correlations and volatilities of the peer group companies. In addition to the inputs in the table above, further inputs as follows:
The model inputs for the 694,444 broker warrants granted for consulting services during the year included:
(a) warrants are granted for no consideration and vested warrants are exercisable for a year of three years after the grant date: 19 February 2021.
(b) expiry date: 19 February 2024.
(c) share price at grant date: 9.6 pence.
(d) expected price volatility of the company's shares: 70.24%.
(e) risk-free interest rate: 0.70%.
The model inputs for the 30,000,000 director and Brazilian employee options and 1,000,000 third party warrants granted for consulting services during the year included:
(a) 30,000,000 options are granted and split into two Tranches, whereby 20,250,000 tranche A options have vesting conditions linked to performance and 9,750,000 Tranche B options vest immediately.
(b) Tranche A is split further with 9,450,000 options vesting once all necessary permits required to commence production are received and then a further 10,800,000 options vest upon commencement of production at the Pitombeiras Vanadium Project.
(c) The 9,450,000 options have a vesting period of two years from grant date and the 10,800,000 options have a vesting period of three years from the grant date.
(d) 1,000,000 warrants are granted for no consideration and vested warrants are exercisable for a period of three years after the grant date: 10 August 2021.
(e) expiry date: 10 August 2025.
(f) share price at grant date: 8.0 pence.
(g) expected price volatility of the company's shares: 70.24%.
(h) risk-free interest rate: 0.591%.
| 18. | Subsidiary |
|
The details of the subsidiaries of the Company, which have been included in these consolidated financial statements are:
| | Name | Country of incorporation | Proportion of ownership interest | |
| | VTF Mineração Ltda. | Brazil | 99.99% | |
| | Jangada Services Plc | United Kingdom | 100.00% | |
| | Allexcite Enterprises Pty Ltd | Australia | 100.00% | |
|
|
| ||
| 19. | Related party transactions |
| |
During the year the Company entered into the following transactions with related parties.
|
| Year ended 31 December 2022 | Year ended 31 December 2021 |
|
| $'000 | $'000 |
| Garrison Capital (UK) Limited: | | |
|
Purchases made on Company's behalf and administrative fees expensed during the year | - | 20 |
| Nicholas von Schirnding: | | |
|
Investment in Fodere Titanium Limited of which Nicolas von Schirnding is the Chairman | - | 490 |
| FFA Legal Ltda: | | |
| Legal and accountancy services expensed during year | 89 | 90 |
FFA Legal Ltda is a related party to the Group due to having a director in common with Group companies. At the year-end they were owed $nil (2021: $nil).
Harvest Minerals Limited is a related party to the Group due to having directors in common with Group companies. At the year-end they held 1,250,000 options (2021: 1,250,000), which were acquired from various option holders on 3 March 2021 at an aggregate sum of £77,000 (USD$107,175).
Directors' remuneration is disclosed within note 9.
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|
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| 20. | Subsequent Events |
In May 2023, the Company purchased an additional 2,000,000 shares in Blencowe Resources PLC and paid £0.05 per share. The Company also received 1,000,000 warrants with an exercise price of £0.08 per share and expiry date of 23 May 2026.
At the year end, the Company had a loan receivable from KEFI Gold and Copper Plc ("KEFI") for $0.25 million, which was subsequently converted post year end into 35,714,285 shares in KEFI and is a liquid investment on the London Stock Exchange.
There have been no other significant subsequent events since the reporting date.
| 21. | Ultimate controlling party |
The Directors consider that the Company has no single controlling party.
**ENDS**
For further information please visit www.jangadamines.com or contact:
| Jangada Mines plc | Brian McMaster (Chairman) | info@jangadamines.com |
| Strand Hanson Limited (Nominated & Financial Adviser) | Ritchie Balmer James Spinney | Tel: +44 (0)20 7409 3494 |
| | | |
| Tavira Securities Limited (Broker) | Jonathan Evans | Tel: +44 (0)20 7100 5100 |
| | | |
| St Brides Partners Ltd (Financial PR) | Ana Ribeiro Isabel de Salis | jangada@stbridespartners.co.uk |
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