REG - Jubilee Metals Group - Unaudited interim results

Jubilee MetalsAnnouncement

26/03/2020 10:15

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 


262 




Closing balance


 


10 247 


5 768 


18 865 




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 diversify 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.
 
  END
 
 
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