TIDMJLP
RNS Number : 1140W
Jubilee Platinum PLC
10 November 2017
Registration number (4459850)
AltX share code: JBL
AIM share code: JLP
ISIN: GB0031852162
10 November 2017
Jubilee Platinum PLC
("Jubilee" or the "Company")
Notice of Annual General Meeting
Audited results for the year ended 30 June 2017
The directors of AIM traded Jubilee, the Mine-to-Metals company,
are pleased to release its audited results for the year ended 30
June 2017.
Notice of Annual General Meeting
The Company also hereby gives notice of the Company's 2017
Annual General Meeting, which will be held on 4 December 2017 at
11:00 am UK time at Fladgate LLP, 16 Great Queen Street, London,
WC2B 5DG to transact the business as stated in the notice of Annual
General Meeting. The Group's Annual Report for the year ended 30
June 2017 has been posted to the website, www.jubileeplatinum.com,
with the notice of the Company's 2017 Annual General Meeting.
Shareholders are advised that the Notice of Annual General Meeting,
including a Form of Proxy, for the year ended 30 June 2017 has been
posted to Jubilee shareholders today, 10 November 2017.
Highlights for period under review
Financial Highlights
-- Group revenue up to GBP 9.81 million (ZAR 169.59 million)(1)
((2016: GBP 1.47 million (ZAR 25.41 million))
-- Group loss for the year from continuing operations, excluding
once off non-cash items (2) , decreased by 61.87 % to GBP 2.10
million (ZAR 36.42 million) ((2016: loss of GBP 3.41 million (ZAR
58.97 million))
-- Group loss per share from operations, excluding once off
non-cash items(2) is 0.25 pence (ZAR 4.27 cents) ((2016: 0.38
pence) (2016: ZAR 8.07 cents))
-- Operating expenses from continuing operations down 26.69 % to
GBP 3.44 million (ZAR 59.46 million) ((2016: GBP 4.69 million) (ZAR
81.06 million))
(1= for income statement purposes conversions are at the average
GBP: ZAR rate for the period under review and for balance sheet
purposes conversions are at the closing rate as at the period end.
All other conversions are at rates as at the time announced.)
2= Impairment of intangible assets totaled GBP8.47 million, net
of tax, which if included equates to a group loss per share of 1.07
pence (ZAR 18.55 cents)
Operational Highlights
-- The DCM Operations deliver first full year of production with
total chrome concentrate produced of 78 588 tonnes, resulting in
revenue of GBP 9.37 million (ZAR 161.94 million)
-- The Hernic PGM and chrome project is bought into operation
and delivers its first saleable PGM concentrate in April 2017
producing 808 PGM(1) ounces by end June 2017 and resulting in
revenue of GBP 0.43 million (ZAR 7.43 million)
-- Jubilee acquires the rights to the PGMs contained in the
PlatCro material estimated at 1 400 000 tonnes of PGM containing
surface material
-- The Tjate Platinum project is awarded its mining right in March 2017
1= Precious Group Metals ( platinum, palladium, rhodium,
iridium, ruthenium and gold)
Highlights post the period under review
-- DCM chrome and PGM processing agreement replaced with a 50/50
partnership agreement on all chrome concentrate produced at DCM
while reaffirming its exclusive PGM right
-- 3(rd) Party chrome ore processing agreement executed with DCM
targeting the of up to 40 000 tonnes per month of chrome ore to
supplement the DCM material
-- Joint Venture agreement executed with BMR Group PLC for the
Kabwe lead, zinc and vanadium surface processing project estimated
to contain 6 400 000 tonnes of lead, zinc and vanadium rich
material at surface
-- Jubilee executes a USD 50 million funding agreement to
support the Company's targeted project build program
Overview
Jubilee has delivered a remarkable operational performance
during the period under review with continued strong growth post
the period under review. The period has seen Jubilee being awarded
the mining licence for the Tjate platinum project and ramping-up
the DCM chrome operation to reach 78 588 tonnes of saleable chrome
concentrate, while delivering the Hernic chrome and platinum
recovery plant targeting 660 000 feed tonnes per annum.
Post the period under review, Jubilee continued acquiring
further access to valuable surface resources which included the
acquisition of the PGMs contained in the surface material at
PlatCro Minerals ("PlatCro") in South Africa as well as entering
into a joint venture agreement with BMR Group PLC to execute the
Kabwe surface processing project targeting the recovery of lead,
zinc and vanadium from surface material in Zambia. These
transactions extended Jubilee's reach beyond the borders of South
Africa into both PGMs and base metals leveraging off its in-house
metallurgical skill, project execution track record and operational
performance.
Jubilee now holds a project portfolio containing low risk, high
return, short term projects which includes:
-- Platinum project to recover PGMs from the estimated 1 400 000
tonnes surface stock at PlatCro in South Africa
-- Platinum project to recover PGMs from the estimated 800 000
tonnes at surface at DCM in South Africa
-- Kabwe project to recover lead, zinc and vanadium from the
estimated 6 400 000 tonnes (3 200 000 tonnes JORC compliant)
surface tailings at the Kabwe operations in Zambia
The Company continues to actively pursue further projects
consistent with its stated mission to grow the Company's processing
capacity of at or near-surface material.
Jubilee has responded well to challenges in the global PGM
markets as reflected in PGM prices by diversifying its earnings
generation to include chrome and PGMs and expanding its project
portfolio into base metals such as lead, zinc and vanadium.
Jubilee's surface projects remain robust at these metal prices as
reflected in Jubilee's Q3 2017 update, recording a unit cost per
PGM ounce produced of USD 476, which is set to reduce further as
the project continues to increase its production. Jubilee's surface
projects has the benefit of not being exposed to mining cost or
associated mining risk.
Jubilee's operations
Hernic - South Africa
The Hernic project is the second of the Company's operating
PGM-bearing surface tailings projects and targets processing in
excess of 660 000 feed tonnes tailings per year. The project has
access to an estimated 3 000 000 tonnes of PGM material, to which
Hernic continues to add further current arisings material. The
project, which is estimated to contain in excess of 224 000 (3PGM +
Au) ounces, is the largest PGM beneficiation plant in South Africa
to process surface chrome tailings.
The Hernic project commenced construction in June 2016 with
commissioning starting in January 2017 and delivering its first PGM
ounces to market in April 2017. Total project capital spent on the
targeted 660 000 tonnes per annum chrome and PGM processing
facility reached GBP 12.97 million (ZAR 220 million) of which the
total debt burden of the project was reduced to GBP 2.98 million
(ZAR 50.54 million) as at the date of this report.
The data below in table 1 captures the commissioning and ramp-up
phases of the project with the data for Q3 2017 illustrating the
continued increase in production and earnings growth following the
period under review. The unit cost per PGM ounce produced has
reduced to USD 476 during Q3 2017 and is set to reduce further
in-line with the expected continued increase in production for Q4
2017.
Table 1 below presents the operational performance of the Hernic
operations for the period under review (Q2 2017) and the following
quarter Q3 2017:
Tailings PGM Project Project Project Project Jubilee Jubilee Unit
processed ounces revenue revenue(2) earnings(3) earnings attributable attributable cost
tonnes delivered (1) (ZAR'000) (GBP'000) (ZAR'000) earnings earnings / PGM
(GBP'000) (GBP'000) (ZAR'000) ounce
(USD)
------- ---------- ---------- ---------- ----------- ------------ ---------- ------------- ------------- ------
Q2 80
2017 828 808 459(4) 7.604 (110) (1.928) (110) (1.928) 901
------- ---------- ---------- ---------- ----------- ------------ ---------- ------------- ------------- ------
Total
Q3 105
2017 673 2 874 1.539 26.581 496 8.592 496 8.592 476
------- ---------- ---------- ---------- ----------- ------------ ---------- ------------- ------------- ------
(1= Revenue from the current project phase - 100% attributable
to Jubilee until full capital recovery. Revenue is projected based
on latest average PGM market prices and USD exchange rates and
results are only final once final Quotational Period has
passed)
(2= Average monthly conversion rates used)
(3= Project Earnings include all incurred operational costs
including management services and mineral royalties)
(4 = Figures as per quarterly updates announced. The annual
total can differ from the annual audited result due to different
conversion rates used.)
Dilokong Chrome Mine (DCM) - South Africa
Jubilee's subsidiary, Jubilee Tailings and Treatment Company
Proprietary Limited ("JTTC"), holds the exclusive rights to
beneficiate the PGMs and chrome from the platinum and
chrome-containing surface material at Dilokong Chrome Mine
Proprietary Limited ("DCM") a subsidiary of ASA Metals Proprietary
Limited ("DCM Platinum Project, Processing Agreement").
The Processing Agreement gives Jubilee access to more than 800
000 tonnes (Sept 2012) of surface material containing 74 000 ounces
4E PGM (platinum, palladium, rhodium and gold). JTTC achieved
stable project target design operations during Q4 2016. In February
2016 Jubilee executed a further processing agreement ("the
Processing Agreement") to expand and operate on DCM's behalf the
chrome beneficiation plant.
Immediately following the period under review, and in an ongoing
co-operation with DCM, Jubilee executed a new framework treatment
of tailings and chrome ore agreement ("New Agreement") with DCM,
thereby cancelling and superseding all existing agreements in
respect of chrome processing and PGM recovery at DCM. The New
Agreement transforms Jubilee's DCM operations as an equal joint
venture with DCM, on all chrome ore including 3rd party chrome ore.
This New Agreement now affords Jubilee the right to 50 % of all
chromite earnings generated from the processing of third party or
other Chromite Ore. This New Agreement captures the growth of the
DCM project from initially Jubilee holding no rights to earnings
from chromite ore at the outset of the DCM project. The New
Agreement further secures Jubilee's unencumbered PGM rights from
all material processed at DCM irrespective of source.
Jubilee further executed an ore processing agreement ("Ore
Agreement") in addition to the New Agreement, in terms of which
Jubilee is contracted to toll process up to 40 000 tonnes per month
of 3rd party Chrome Ore for an initial three year term period -
mutually extendable. Under the terms of the Ore Agreement Jubilee
also secured the rights to the PGMs in the 3rd party Chrome Ore
which further supplements the existing PGMs already contained in
the surface material at DCM. DCM plant's spare capacity will be
utilized for this processing, which has the potential to more than
double current DCM's operational throughput. The additional PGMs
secured provides Jubilee the opportunity to expand its PGM recovery
strategy at DCM and materially add to the Company's earnings, since
the fixed cost element of DCM's operation would remain relatively
unchanged. This Ore Agreement continues Jubilee's organic growth in
this field and is a step in its stated intent to consolidate chrome
and platinum retreatment in the region.
During the period under review the DCM operations performed well
with its first full year of operation under the terms of the
Processing Agreement. The New Agreement as announced on 5 September
2017, between DCM and Jubilee became effective on 1 September 2017.
The effect of this New Agreement together with the ramp-up of
processing 3rd party ore at the DCM operations will reflect in the
2018 financial period.
The table below presents the operational performance of the DCM
operations for the period under review and the following quarter Q3
2017:
Chromite Project Project Project Project Jubilee Jubilee
concentrate revenue revenue earnings(2) earnings attributable attributable
produced (GBP'000) (1) (GBP'000) (ZAR'000) earnings earnings
tonnes (ZAR'000) (GBP'000) (ZAR'000)
--------------- ------------- ----------- ----------- ------------- ----------- -------------- --------------
Total Q3
2016 26 848 2.141 38.368 1.581 28.320 587 10.505
--------------- ------------- ----------- ----------- ------------- ----------- -------------- --------------
Total Q4
2016 19 108 2.642 45.714 1.714 29.668 368 6.367
--------------- ------------- ----------- ----------- ------------- ----------- -------------- --------------
Total Q1
2017 14 973 3.372 55.224 2.407 38.862 408 6.664
--------------- ------------- ----------- ----------- ------------- ----------- -------------- --------------
Total Q2
2017 17 659 1.348 22.731 386 6.504 399 6.727
--------------- ------------- ----------- ----------- ------------- ----------- -------------- --------------
Total for
period
under review 78 588 9.503(3) 162.037 6.088 103.354 1.762 30.263
--------------- ------------- ----------- ----------- ------------- ----------- -------------- --------------
Total Q3
2017 15 134 1.129 19.526 184 3.173 356 6.139
--------------- ------------- ----------- ----------- ------------- ----------- -------------- --------------
(1= Average monthly conversion rates used)
(2 = Project earnings include project expenditure on plant and
equipment)
(3) (= Figures as per quarterly updates announced. The annual
total can differ from the annual audited result due to different
conversion rates used.)
Chairman's statement
Dear Shareholder,
The year under review has been an exceptional period of growth
for Jubilee. Jubilee established itself as a diversified producer
of metals entering both the chrome and platinum industry through
the ramp-up of its DCM operations and commissioning of the Hernic
project while the Tjate platinum project was awarded its mining
license. Jubilee continued its drive to grow post the period under
review with the acquisition of the surface PGMs at PlatCro and
joint venture agreement with BMR Group PLC to execute the Kabwe
surface project in Zambia.
At the commencement of the year, the Hernic plant was
approximately 50 % built with the Company gaining significant
financial contribution from Dilokong enjoying the benefits of
increasing chrome prices and our participation in chrome
benefits.
We announced on 6 February 2017 that the Hernic plant commenced
production and that the first chromite concentrate had been
produced. In the same announcement shareholders were advised, that
focus had now moved to the commissioning of the PGM recovery plant.
The commissioning of the PGM circuit was completed towards the end
of March 2017 and we announced PGM production on 29 March 2017.
Thereafter we saw increased production of chromite and PGMs as the
various circuits underwent troubleshooting and optimisation.
Throughout the period under review the Hernic contribution improved
month on month and at the time of writing this report, we had
reached a total of 3 682 ounces of PGM production. A significant
financial performance was the PGM production cost of USD 476 per
ounce for the third quarter 2017. This demonstrates that the
operation is extremely resilient to the volatile and depressed PGM
prices experienced during the year. We continue to optimise at
Hernic and are confident of reduced cost throughout the operation,
improving productivity and significant financial contribution to
the group.
The Dilokong operation continued to grow its earnings with
upgraded platinum concentrate stockpiles being accumulated at the
operation. During the early part of this year, we advised
shareholders that Dilokong financial results would be considerably
advanced by the acquisition of third party ore to be processed at
Dilokong and towards the end of the first quarter of 2017 we
processed our first third party ore.
Post the closing of this review period, we announced a
significant new partnership agreement for third party ore which
will provide for an additional 40 000 tonnes of ore per month for a
minimum three year period. The financial effect of this contract
will be very positive to the Dilokong operation and to the
attributable income for Jubilee.
In terms of the Middelburg smelter and power station disposal,
final proceeds were received mid-March 2017 after full and final
settlement post arbitration.
A major milestone for the Company was achieved on 2 March 2017
when we announced that the Tjate Platinum project had been awarded
its mining right. The project represents an extremely, large PGM
metal resource and in terms of the fourth generation of new
platinum mines is favourably positioned in terms of depth, grade
continuity and is relatively geologically untroubled compared to
its peers. We are now busy carrying out all things necessary to
maintain compliance with the terms and conditions of the mining
right order. The board are fully aware that new mine development in
the platinum industry is not immediately evident, but remain
convinced that Tjate will play a significant role in the future
growth of South Africa's platinum industry in general and this
Company in particular.
Our new business development in the past has been proactive and
responsive and once projects have been acquired, financing
structures were sought to achieve the acquisition or earn-in
requirements. The board considered this to be a less than
satisfactory arrangement and commenced a search for a funding
partner who knew our business and shared our aspirations for its
growth.
Post balance sheet in August 2017, we announced an agreement
with Riverfort Capital Group Limited for a project funding
agreement of USD 50 million. We have not yet used this agreement
for any new projects but are highly encouraged that we have the
arrangement in place as we enter more and more discussions for new
projects.
A further major post balance sheet announcement was made on 23
October 2017, which involved the joint venture with BMR Group PLC
("BMR"). This joint venture is based in Zambia and relates to the
Kabwe lead, zinc and vanadium historical surface deposits. This
project involves Jubilee investigating, developing flow sheets and
if appropriate building a treatment plant in joint venture with
BMR. The surface deposits are large and entail at least 6 400 000
tonnes of material of which 50 % is JORC compliant. The joint
venture entails that Jubilee, stage advances up to GBP 2.30 million
and thereafter shares some 40 % of the beneficial earning arising
from the project. This agreement is very important on the basis
that the Company is now involved in a different company, country
and in different commodities thus providing a hedge to the Bushveld
complex and South Africa.
In terms of PGM metal prices we remain somewhat disappointed as
to their volatility and low top range. This being despite more cars
being built and a prosperous new global economy with good signs for
emerging markets. There is much talk about the electric car being
the answer and therefore displacing the need for fuel cell powered
motor cars. The Jubilee board believes that the electric car is an
interim step and the emergence of the fuel cell will significantly
enhance the fortunes of the platinum producing industry.
In any event we are seeing the normal supply demand attrition
and supply response which is a cycle common to all commodities.
Jubilee has emerged, at the time of writing this report as a
diversified producer with many significant opportunities currently
being investigated and negotiated at an advanced level. A number of
these opportunities, if brought to completion, could change the
short-term prospects for Jubilee and make the mid-cap space, to
which I often allude, a reachable target.
Jubilee, having completed two projects, is now at a very
important stage in its evolution and the board has to consider the
merits of organic growth against corporate acquisition growth or
combination thereof. We are mindful that the resource world has not
rebounded from the woes of the past and that major opportunities
exist for companies committed to growth. Jubilee is one of those
companies.
Although the board expects to realise the value of the Nickel
Tailings Project, the board felt it prudent to impair the asset
until the legal impasse with BHP is resolved. The Group reported a
loss per share from continuing operations for the period under
review, excluding impairments of intangible assets, of 0.25 pence
(ZAR 4.27 cents) compared to a loss of 0.38 pence (ZAR 8.07 cents)
for the comparative period. Impairment of intangible assets totaled
GBP 8.47 million, net of tax, which if included equates to a group
loss per share of 1.07 pence (ZAR 18.55 cents).
Finally I would like to thank everyone concerned at whatever
level in Jubilee who have assisted in taking the Company to its
current position. In particular I would like to thank the Chief
Executive Officer Leon Coetzer and his immediate team for their
commercial prowess and intellectual and managerial contribution to
our projects. Their efforts have been instrumental in creating the
Jubilee brand, which is now exportable, credible and achieving
global recognition.
Colin Bird
Non-Executive Chairman
Financial statements for the year ended 30 June 2017
Consolidated statement of comprehensive income for the year
ended 30 June 2017
Figures in Sterling 2017 2016
9 805 1 473
Continuing operations 701 921
(8 038
Revenue Cost of sales 731) (608 309)
----------------------------------------- --------- -------------
1 766
Gross profit 970 865 612
Other income 348 10 725
(3 439 (4 690
Operating expenses 040) 862)
----------------------------------------- --------- -------------
(1 671 (3 814
Operating loss 722) 525)
Investment revenue 18 673 144 077
Gain on non-current assets
held for sale or
disposal groups - 84 680
Impairment of intangible (18 570
assets 584) -
(198
Finance costs 565) (13 418)
----------------------------------------- --------- -------------
(20 422 (3 599
Loss before taxation 198) 186)
9 849
Taxation 606 201 901
----------------------------------------- --------- -------------
(10 572 (3 397
Loss from continuing operations 592) 285)
Discontinued operations
Loss from discontinued
operations - (276 660)
----------------------------------------- --------- -------------
(10 572 (3 673
Loss for the year 592) 945)
Other comprehensive income:
Exchange differences on translating 6 104 2 653
foreign operations 352 926
----------------------------------------- --------- -------------
(4 468 (1 020
Total comprehensive loss 240) 019)
----------------------------------------- --------- -------------
Attributable to:
Owners of the parent:
(10
Loss for the year from continuing 570 (3 412
operations 058) 174)
Loss for the year from discontinuing
operations - (283 749)
----------------------------------------- --------- -------------
(10
Loss for the year attributable 570 (3 695
to owners of the parent 058) 923)
----------------------------------------- --------- -------------
Non-controlling interest:
(Loss)/profit for the year from
continuing operations (2 534) 14 889
Profit for the year from discontinuing
operations - 7 089
----------------------------------------- --------- -------------
Profit for the year attributable
to non-controlling interest (2 534) 21 978
----------------------------------------- --------- -------------
Total comprehensive loss attributable
to:
(4 878 (1 009
Owners of the parent 961) 610)
Non-controlling interest 410 721 (10 409)
----------------------------------------- --------- -------------
(4 468 (1 020
240) 019)
----------------------------------------- --------- -------------
Basic and diluted loss per share
(pence) - continuing
operations (1.07) (0.38)
Basic and diluted loss per share
(pence) - discontinued
operations - (0.03)
----------------------------------------- --------- -----------
Loss per share (1.07) (0.41)
----------------------------------------- --------- -----------
Consolidated statement of financial position as at 30 June
2017
Figures in Sterling 2017 2016
Assets
Non-current assets
Property, plant and equipment 13 161 021 4 977 784
Intangible assets 48 166 942 61 838 764
218
Deferred tax - 345
------------------------------- --------------------------- ------------ ----------------
61 327 67 034
963 893
------------------------------------------------------------ ------------ ------------
Current assets
Inventories 44 789 -
Other financial assets - 555 159
Current tax receivable 15 870 15 870
Trade and other receivables 3 222 150 1 074 509
Cash and cash equivalents 4 635 636 4 414 908
------------------------------- --------------------------- ------------ ------------
7 918 445 6 060 446
------------------------------------------------------------ ------------ ------------
69 246
Total assets 408 73 095 339
------------------------------------------------------------ ------------ ------------
Equity and liabilities
Equity attributable to equity
holders of parent
Share capital 87 674 940 82 515 169
Reserves 23 078 043 17 997 713
Accumulated loss (57 261 760) (46 799 127)
------------------------------- --------------------------- ------------ ------------
53 491 223 53 713 755
Non-controlling interest 2 867 039 2 456 318
------------------------------------------------------------ ------------ ------------
56 358 262 56 170 073
------------------------------------------------------------ ------------ ------------
Liabilities
Non-current liabilities
Other financial liabilities 688 000 -
Deferred tax 5 362 500 14 677 152
------------------------------------------------------------ ------------ ------------
6 050 500 14 677 152
------------------------------------------------------------ ------------ ------------
Current liabilities
Other financial liabilities 3 083 581 -
Trade and other payables 3 754 065 2 248 114
6 837 646 2 248 114
------------------------------------------------------------ ------------ ------------
Total liabilities 12 888 146 16 925 266
------------------------------------------------------------ ------------ ------------
Total equity and liabilities 69 246 408 73 095 339
------------------------------------------------------------ ------------ ------------
The financial statements were authorised for issue and approved
by the Board on 9 November 2017 and signed on its behalf by:
Leon Coetzer
Chief Executive Officer
Company number 04459850
Consolidated statement of changes in equity for the year ended
30 June 2017
Total
attributable
Foreign to equity
currency Share-based holders Non-
Figures Share translation Merger Payment Total Accumulated of the controlling
in Sterling capital reserve reserve reserve reserves loss Group interest Total equity
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Balance
at 1 July 75 896 (11 640 23 184 5 199 16 742 (43 495 49 142 365
2015 582 768) 000 026 258 910) 930 071 49 508 001
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Changes
in equity
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Total
comprehensive
income for 2 686 2 686 (3 695 (1 009 (10
the year - 313 - - 313 923) 616) 409) (1 020 019)
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Issue of
share capital 6 618 6 618
net of costs 587 - - - - - 587 - 6 618 587
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Disposal
of 1 820 1 820 (1 820 (397
subsidiaries - 818 - - 818 818) - 268) (397 268)
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Warrants 304 304
issued - - - 925 925 - 304 925 - 304 925
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Options
issued under 1 155 1 155 1 155
new scheme - - - 847 847 - 847 - 1 155 847
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Option
cancelled
under old (4 450 (4 450 4 450
scheme - - - 210) 210) 210 - - -
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Warrants (258 (258
exercised - - - 306) 306) 258 306 - - -
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Warrants
lapsed - - - (3 932) (3 932) 3 932 - - -
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Adjustment (2 498 (2 498 2 498
to NCI - - - - - 923) 923) 923 -
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
6 618 4 507 (3 251 1 255 (3 303 4 570 2 091
Total changes 587 131 - 676) 455 216) 826 246 6 662 072
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Balance
at 1 July 82 515 (7 133 23 184 1 947 17 997 (46 799 53 713 2 456
2016 169 637) 000 350 713 126) 756 317 56 170 073
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Total
comprehensive
income for 5 691 5 691 (10 572 (4 878 410
the year - 097 - - 097 592) 961) 721 (4 468 239)
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Issue of
share capital
net of costs 5,159,771 - - - - - - - -
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Warrants
issued - - - 22,025 22,025 - 22,025 - 22,025
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Warrants
exercised - - - (632,792) (632,792) 632,792 - - -
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Increase
in investment - - - - - (525,367) (525,367) - (525,367)
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
5 691 5 080 410
Total changes 5,159,771 097 - (610,767) 330 (13,374,298) (255 066) 721 188,190
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Balance
at 30 June 87 674 (1 442 23 184 1 336 23 078 (57 261 53 491 2 867
2017 940 540) 000 583 043 760) 223 039 56 358 262
-------------- --------- ----------- -------- ------------ --------- ------------ ------------ ----------- -------------
Consolidated statement of cash flow for the year ended 30 June
2017
Figures in Sterling 2017 2016
Cash flows from operating activities (160 100) (688 883)
Cash used in operations 18 673 144 077
Interest income Finance costs (384 935) (13 418)
------------------------------------------------------------------------ ---------------- ----------------------
Net cash from operating activities 526 362 (558 224)
------------------------------------------------------------------------ ---------------- ----------------------
Cash flows from investing
activities
Purchase of property, plant (4 548
and equipment (7 161 323) 858)
Sale of property, plant
and equipment 19 145 -
Purchase of other intangible
assets (37 685) (4 239)
Net cash flow from disposal 3 986
of discontinued operations - 126
Decrease/(increase) in
loans 555 159 (555 159)
Payments in advance for
tailings (1 179 220) -
------------------------------------------- --------------------------- ---------------- ----------------------
(1 122
Net cash from investing activities (7 803 924) 130)
------------------------------------------------------------------------ ---------------- ----------------------
Cash flows from financing activities
5 865
Net proceeds on share issues 5 159 771 560
(2 986
Proceeds from other financial liabilities 434) (102 490)
Repayment of other financial liabilities 6 135 647 -
------------------------------------------------------------------------ ---------------- --------------------------
5 763
Net cash from financing activities 8 308 984 070
------------------------------------------------------------------------ ---------------- --------------------------
4 082
Total cash movement for the year 21 302 716
Total cash at the beginning of the 4 414
year 908 360 829
Effect of exchange rate movement on
cash balances 242 030 (28 637)
------------------------------------------------------------------------ ---------------- --------------------------
Total cash at end of the 4 635 4 414
year 636 908
------------------------------------------- --------------------------- ---------------- --------------------------
NOTES TO THE AUDITED RESULTS FOR THE YEARED 30 JUNE 2017
1. Statement of accounting policies
The Group and Company results for the year ended 30 June 2017
have been prepared using the accounting policies applied by the
Company in its 30 June 2016 annual report which are in accordance
with International Financial Reporting Standards (IFRS and IFRC
interpretations) issued by the International Accounting Standards
Board ("IASB") as adopted for use in the EU (IFRS, including the
SAICA financial reporting guides as issued by the Accounting
Practices Committee and the Companies Act 2006 (UK). They are
presented in Pound Sterling.
This financial report does not include all notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the annual report for the
year ended 30 June 2017 and any public announcements by Jubilee
Platinum PLC after that date to the date of publication of these
results.
All monetary information is presented in the functional currency
of the Company being Great British Pound. The Group's principal
accounting policies and assumptions have been applied consistently
over the current and prior comparative financial period. The
financial information for the year ended 30 June 2016 contained in
this report does not constitute statutory accounts as defined by
section 435 of the Companies Act 2006. A copy of the statutory
accounts for that year has been delivered to the Registrar of
Companies. The auditor's report on those accounts was unqualified
did not contain a statement under section 498(2)-(3) of the
Companies Act 2006.
2. Financial review
The Group reported a loss per share from continuing operations
for the period under review, excluding impairments of intangible
assets, of 0.25 pence (ZAR 4.27 cents) compared to a loss of 0.38
pence (ZAR 8.07 cents) for the comparative period. Impairment of
intangible assets totaled GBP 8.47 million, net of tax, which if
included equates to a group loss per share of 1.07 pence (ZAR 18.55
cents). The impairment relates to the Group's interest in its
Nickel Tailings Project in Australia. Although the board expects to
realise the value of the Nickel Tailings Project, the board felt it
prudent to impair the asset until the legal impasse with BHP is
resolved.
The Group managed to continue to tightly control costs. Total
operating expenses from continued operations is down 26.69 % to GBP
3.44 million (ZAR 59.46 million) ((2016: GBP 4.69 million) (ZAR
81.06 million)).
Earnings per share for the year ended 30 June 2017 were as
follows: 2017
2016
Basic loss for the year - continuing
operations (GBP'000) (10 570) (3 412)
Basic loss for the year - discontinuing
operations (GBP'000) - (283)
------------------------------------------ -------- -------
Total loss for the year (GBP'000) (10 570) (3 695)
------------------------------------------ -------- -------
Weighted average number of shares in
issue ('000) 984 780 906 241
Loss per share - continuing operations
(pence) (1.07) (0.38)
Loss per share - discontinuing operations
(pence) - (0.03)
------------------------------------------ -------- -------
(1.07) (0.41)
------------------------------------------ -------- -------
Loss per share - continuing operations
(ZAR cents) (18.55) (8.07)
Loss per share - discontinuing operations
(ZAR cents) - (0.67)
------------------------------------------ -------- -------
(18.55) (8.74)
------------------------------------------ -------- -------
The Group reported a net asset value of 5.04 pence (ZAR 85.54
cents) (2016: 5.65 pence (ZAR 112.38 cents) per ordinary share. The
total shares in issue as at 30 June 2017 were 1 118 360 942 (2016:
991 087 994). Refer to note 6 below for details of shares issued
during the period under review.
3. Dividends
The Board did not declare any dividends for the period under
review. (2016: Nil)
4. Auditor's review opinion
These results have been audited by the Group's auditors, Saffery
Champness LLP and their report is available for inspection at the
Company's registered office. A copy of the report is also attached
to the back of this announcement as annexure 1.
5. Board
There were no changes to the board during the period under
review and up to the date of this announcement.
6. Share capital
30 June 30 June
Authorised 2017 2016
The share capital of the Company
is divided into an unlimited number
of ordinary shares of 1 pence
each.
Issued
Ordinary shares of 1 pence each
(GBP)
Share premium (GBP)
11 183 609 9 910 872
76 491 331 72 604 297
--------------------------------------- --------------- -----------------
Total issued capital (GBP) 87 674 940 82 515 169
--------------------------------------- --------------- -----------------
Number of shares in issue
Ordinary shares 1 118 360 942 991 087 194
--------------------------------------- --------------- -----------------
The Company issued the following shares during the period and up
to the date of this annual report:
Number Issue price
of - Purpose
Date of the
shares Pence issue
----------------------------------- --------- ----------- -------------
991 087
Opening balance 194
----------------------------------- --------- ----------- -------------
25 000
21 November 2016 000 3.55 Warrants
----------------------------------- --------- ----------- -------------
Director
21 November 2016 1 848 167 2.44 remuneration
----------------------------------- --------- ----------- -------------
23 January 2017 2 300 000 3.16 Warrants
----------------------------------- --------- ----------- -------------
31 January 2017 2 500 000 3.15975 Warrants
----------------------------------- --------- ----------- -------------
10 550
03 February 2017 581 3.23 Warrants
----------------------------------- --------- ----------- -------------
09 February 2017 2 500 000 3.15975 Warrants
----------------------------------- --------- ----------- -------------
14 February 2017 2 000 000 3.15975 Warrants
----------------------------------- --------- ----------- -------------
17 February 2017 2 000 000 3.15975 Warrants
----------------------------------- --------- ----------- -------------
22 February 2017 1 450 000 3.15975 Warrants
----------------------------------- --------- ----------- -------------
27 February 2017 625 000 2.0 Warrants
----------------------------------- --------- ----------- -------------
27 February 2017 500 000 2.5 Warrants
----------------------------------- --------- ----------- -------------
10 000
10 March 2017 000 4.725 Warrants
----------------------------------- --------- ----------- -------------
66 000 Issue
23 March 2017 000 5.0 for cash
----------------------------------- --------- ----------- -------------
1 118 360
Closing balance at year-end 942
----------------------------------- --------- ----------- -------------
Balance as at the last practicable 1 118 360
date 942
----------------------------------- --------- ----------- -------------
The Company did not issue any shares after year-end to the date
of this report.
During the year transaction costs accounted for as a deduction
from equity amounted to GBP 314 050.
At year-end and at the last practicable date the Company had the
following warrants outstanding:
Subscription End of Spot at
Issue
price exercise Volatility date
Number of Issue
warrants date pence period % pence
---------- ---------- ------------ ---------- ---------- -------
3 591 742 2015-08-12 4.750 2018-08-12 77.49 4.48
8 244 825 2016-03-23 4.725 2019-03-23 83.81 2.94
----------
11,836,567
----------
The fair value of these warrants was determined using the
Black-Scholes Valuation Model with the inputs illustrated in the
table above. A risk free rate of 0.5 % were applied in the
valuation. The company recognised a share-based payment charge
against the share-based payment reserve in the amount of GBP22 025
(2016: GBP304 925) in accordance with section 610 (2) of the United
Kingdom Companies Act 2006. This charge relates to equity placings
successfully completed.
7. Business segments
In the opinion of the Directors, the continuing operations of
the Group companies comprise of four reporting segments (including
those reported on for the comparative period) being:
- the beneficiation of Platinum Group Metals ("PGMs") and
development of PGM smelters utilising exclusive commercialisation
rights of the ConRoast smelting process, located in South Africa
("PGM beneficiation and development");
- the evaluation of the reclamation and processing of sulphide
nickel tailings at BHP Billiton's Leinster, Kambalda and Mount
Keith properties in Australia (Nickel tailings);
- the exploration and mining of Platinum Group Metals ("PGMs") (Exploration and mining);
- the parent company operates a head office based in the United
Kingdom, which incur certain
administration and corporate costs.
The results of the discontinued operations comprise of two
segments which have been combined into one segment referred to as
Disposal Group being:
- base metal smelting in South Africa; and
- electricity generation in South Africa.
The Group's operations span five countries, South Africa,
Australia, Madagascar, Mauritius and the United Kingdom. There is
no difference between the accounting policies applied in the
segment reporting and those applied in the Group financial
statements. Mauritius and Madagascar do not meet the qualitative
threshold under IFRS 8, consequently no separate reporting is
provided.
Segment report for the year ended 30 June 2017
Total
Figures in PGM beneficiation Nickel Exploration Other continuing Disposal
Sterling and development tailings and mining operations operations group
------------------ ----------------- --------- ----------- ----------- ----------- ---------
(9 805 (9 805
Total revenues 702) - - - 702) -
8 038 8 038
Cost of sales 731 - - - 731 -
Forex losses 47 714 - - 24 704 72 418 -
Loss before 1 511 18 566 20 883
taxation 175 747 71 118 734 887 927 (461 728)
(10 099 (9 849
Taxation 250 303 909) - - 605) -
Loss after 1 761 8 466 11 034
taxation 478 838 71 118 734 887 322 (461 728)
Interest received (11 609) - (760) (6 304) (18 673) -
Interest paid 198 565 - - - 198 565 -
Depreciation,
amortisation 1 108 18 554 19 679
and impairments 866 683 15 901 - 451
------------------ ----------------- --------- ----------- ----------- ----------- ---------
24 149 15 131 26 524 3 440 69 246
Total assets 529 292 677 910 408
------------------ ----------------- --------- ----------- ----------- ----------- ---------
(7 138 (2 275 (2 414 (1 059 (12 888
Total liabilities 099) 862) 659) 526) 146)
------------------ ----------------- --------- ----------- ----------- ----------- ---------
Segment report for the year ended 30 June 2016
Total
Figures in PGM beneficiation Nickel Exploration Other continuing Disposal
Sterling and development tailings and mining operations operations group
------------------ ----------------- --------- ----------- ----------- ----------- --------
(1 127 (1 473 (1 420
Total revenues 880) - - (346 041) 921) 145)
Cost of sales 589 290 - - 19 019 608 309 682 365
Forex losses (7 658) - - 77 571 69 913 -
Loss before 2 784 3 599
taxation 787 554 10 711 16 174 748 187 276 660
Taxation - - - - - -
Loss after 2 784 3 599
taxation 787 554 10 711 16 174 748 187 276 660
Interest received (120 301) - (75) (23 701) (144 077) (193)
Interest paid 5 - - 13 413 13 417 -
Depreciation
and amortisation 597 613 - 838 - 598 451 -
------------------ ----------------- --------- ----------- ----------- ----------- --------
14 004 31 666 23 626 3 797 73 095
Total assets 569 391 458 622 339 -
------------------ ----------------- --------- ----------- ----------- ----------- --------
(2 904 (9 656 (3 885 (16 925
Total liabilities 304) 474) 972) (478 516) 267) -
------------------ ----------------- --------- ----------- ----------- ----------- --------
8. Going concern
The Directors have adopted the going-concern basis in preparing
the financial statements.
The period under review was transformational for the Jubilee
Group of companies and it has continued to successfully implement
its Metals Recovery Strategy which is advancing at an encouraging
pace and the Board is confident that the Group can make further
acquisitions to complement its existing projects and extend its
brand and capabilities into other global surface projects.
The objectives of Jubilee's Metals Recovery Strategy are
threefold:
- Secure low risk, low capital intensive, long-term commodity
production from mine waste at an attractive point on the global
cost curve by using advanced, environmentally sustainable metal
recovery techniques;
- Diversify across multiple commodities including platinum,
cobalt, copper and gold to hedge income risk and to align with
global trends; and
- Rehabilitate the adverse footprint left by legacy mining in
accordance with International Environmental Standards.
The field of extractive metallurgy has made substantial
technological progress in the last 10 years increasing the ability
to profitably re-process materials that contain metals and minerals
missed by the initial recovery path. For several years now, Jubilee
has developed successful proprietary processing techniques to
optimise metal recovery in an environmentally friendly and
sustainable manner for many companies including large blue-chip
mining houses. Jubilee Processing is well positioned to capitalise
on its in-house expertise to become a global leader in this
field.
-- On 9 August 2017, Jubilee secured a project funding
structure, provided by RiverFort Capital Group Limited
("RiverFort"), which is modelled on the successful Hernic platinum
and chrome recovery project which was also financed through
RiverFort.
The key features of the Agreement are:
- Funding will be provided at project-level directly to the
Jubilee project subsidiary by RiverFort
- USD 50 million pre-approved debt funding targeting multiple
surface based metal recovery projects based on established
individual project criteria
- The funding commitment is for an initial 33-month period with
the flexibility for mutual extension
- In recognition of the funding commitment, RiverFort has been
granted the right to exercise a 2.5 % maximum preference equity
stake in the subsidiary Jubilee Processing
-- As previously announced on 31 March 2016, the remaining
purchase consideration of the Middelburg Disposal was calculated at
approximately GBP 0.39 million (ZAR 8.90 million) net of closing
adjustments including stock and supplier adjustments. The final
settlement amount of GBP 0.46 million (ZAR 7.40 million) has been
received by Jubilee in March 2017. These proceeds strengthened the
Group's cash flow and its ability to fund its projects.
-- During March 2017 the Company successfully completed a
placing of 66 000 000 new ordinary shares of 1 pence each
("Ordinary Shares") in Jubilee (the "Placing Shares") at a price of
5.0 pence (ZAR 78.70 cents) per share to raise approximately GBP
3.30 million before expenses (ZAR 51.90 million at current
conversion rates).
The Directors are of the opinion that the Group and Company are
funded sufficiently to enable it to continue with its operations as
a going concern.
9. Events after the reporting period
9.1 PlatCro Platinum and Chrome Tailings Project ("PlatCro
project")
Post the period under review the Company executed a Framework
and Processing of Tailings Agreement ("the Agreement") with PlatCro
in March 2017 for the acquisition of new platinum, palladium,
rhodium and gold ("4E PGMs") bearing surface material existing at
PlatCro as well as all future surface material at PlatCro. The
existing surface material is estimated at 1 250 000 tonnes with an
estimated grade of 2.7 g/t 4E PGMs. This ensured Jubilee the sole
right to future earnings from the platinum bearing material.
The PlatCro project will target a processing rate of 25 000
tonnes per month to complement Jubilee's surface tailings platinum
production by a further 14 200 ounces of PGMs per annum. This
projects a total production target at stable operations of
approximately 50 000 ounces of PGMs per annum for Jubilee from all
its surface tailings and 3(rd) party ore projects.
Under the Agreement Jubilee will acquire the existing material
for a total consideration of GBP 3.13 (ZAR 50.00) per tonne of
surface material remaining after on-going further recovery of
residual chromite by PlatCro. Approximately 79 % of the material is
estimated to remain following chromite removal, which equates to a
4E PGM acquisition value of GBP 3.50 million (ZAR 55.40
million).
The Agreement allows for a two-stage payment over an estimated
three month period following the conclusion of the Agreement.
Future material will be acquired at a value of GBP 3.13 (ZAR 50.00)
per tonne of material post chromite removal. The surface material
is located within trucking distance of Jubilee's Hernic operation,
thereby offering the opportunity to process the additional material
at the Company's existing Hernic plant for PGM recovery. Jubilee
also holds the option to acquire property located adjacent to the
surface material for the construction of a dedicated platinum
processing plant, if deemed appropriate, and at Jubilee's
election.
On 9 May 2017 Jubilee executed the first payment of GBP 1.16
million (ZAR 20 million) as part of the PlatCro project. The
PlatCro project includes the upfront acquisition of all PGMs
contained in surface material as well as future PGMs from further
processing and mining operations.
The final payment for the existing surface PGMs is subject to
the completion of the surface drill programme and receiving
regulatory approval to commence with the processing of the PGMs.
The first payment was recognised in the statement of financial
position as a prepayment until such time as the necessary
conditions have been met. On 31 July 2017 Jubilee notified PlatCro
that it has undertaken and completed a survey of the dam as
provided for in the Agreement.
9.2 Project funding secured
On 9 August 2017, Jubilee secured a USD50 million project
funding structure, provided by RiverFort Capital Group Limited
("RiverFort"), which is modelled on the successful Hernic platinum
and chrome recovery project which was also financed through
RiverFort.
10. Contingencies and commitments
Other than disclosed below, there are no material contingent
assets or liabilities as at 30 June 2017.
10.1 PlatCro Platinum and Chrome Tailings Project ("PlatCro
project")
Jubilee executed a framework and processing of tailings
agreement ("the Agreement") with PlatCro Proprietary Limited
("PlatCro"). The Agreement provides for the acquisition of the
platinum, palladium, rhodium and gold ("4E"or "PGMs") contained in
the existing surface material as well as all future material at the
PlatCro. Existing surface material is estimated to be 1.25 million
tonnes at an estimated grade of 2.7 g/t 4E PGMs. On 9 May 2017
Jubilee executed the first payment of GBP 1.16 million (ZAR 20
million) as part of the PlatCro project.
The PlatCro project includes the upfront acquisition of all PGMs
contained in surface material as well as future PGMs from further
processing and mining operations of which the first payment equates
to approximately 50 % of the acquisition value. The final payment
for the existing surface PGMs is subject to the completion of the
surface drill programme and receiving regulatory approval to
commence with the processing of the PGMs. The first payment was
recognised in the statement of financial position as a prepayment
until such time as the necessary conditions have been met. On 31
July 2017 Jubilee notified PlatCro that it has undertaken and
completed a survey of the dam as provided for in the Agreement. As
at the period end Jubilee recognised the first payment of the
acquisition value as a prepayment in an amount of GBP 1.16 million
(ZAR 20 million).
Contacts
Jubilee Platinum PLC
Colin Bird/Leon Coetzer
Tel +44 (0) 20 7584 2155 / Tel +27 (0) 11 465 1913
Andrew Sarosi
Tel +44 (0)1752 221937
JSE Sponsor
Sasfin Capital, (a member of the Sasfin group)
Sharon Owens
Tel +27 (0)11 809 7500
Nominated Adviser
SPARK Advisory Partners Limited
Mark Brady/Andrew Emmott
Tel: +44 (0)203 368 3551
Broker
Beaufort Securities Limited
Jon Belliss
Tel: +44 (0) 20 7382 8300
Annexure 1
Jubilee Platinum Plc
Independent auditors' report to the members
Opinion
We have audited the financial statements of Jubilee Platinum Plc
for the year ended 30 June 2017 which comprise the Consolidated and
Company Statements of Comprehensive Income, the Consolidated and
Company Statements of Financial Position, the Consolidated and
Company Statements of Changes in Equity, the Consolidated and
Company Statements of Cash flows and notes to the financial
statements, including a summary of significant accounting policies
set out on pages 30 to 71. The financial reporting framework that
has been applied in their preparation is applicable law and
International Financial Reporting Standards ("IFRS") as adopted by
the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of affairs of the
Group and of the parent company as at 30 June 2017 and of their
losses for the period then ended;
-- have been properly prepared in accordance with IFRS as
adopted by the European Union; and
-- have been prepared in accordance with the requirements of the Companies Act 2006.
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditors' report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you
where:
-- the Directors' use of the going concern basis of accounting
in the preparation of the financial statements is not appropriate;
or
-- the Directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the company's ability to continue to adopt the going
concern basis of accounting for a period of at least twelve months
from the date when the financial statements are authorised for
issue.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statement as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. This is not a
complete list of all risks identified by our audit.
Key audit matter How our audit addressed
the key audit matter
---------------------------------------------------------------- -------------------------------------------------------------
Carrying value of intangible
assets Our audit procedures included
The carrying value of the following:
intangible assets included * Assessing the methodology used by the Directors to
in the Group's balance calculate recoverable amounts and evaluated if it
sheet at 31 December 2017 complies with the requirements of IAS 36;
was stated at GBP48.2m,
contained within 3 cash
generating units ("CGUs"). * Assessing the viability of the platinum group
elements ("PGE") exploration asset by analysing
The Directors assess at future projected cash flows used in the value in use
each reporting period calculations for the CGU to determine whether the
end whether there is any assumptions used in projecting the cash flows are
indication that an asset reasonable and supportable given the current
may be impaired and intangible macroeconomic climate;
assets with an indefinite
life must be tested for
impairment on an annual * Performing sensitivity analysis on key assumptions
basis. The determination and testing the mathematical accuracy of models;
of recoverable amount,
being the higher of value-in-use
and fair value less costs * Comparing foreign exchange rates used in management's
to dispose, requires judgement calculations against third party sources;
on the part of management
in both identifying and
then valuing the relevant * Understanding the commercial prospects of the assets,
CGUs, especially for projects and where possible comparison of assumptions with
where the there is an external data sources;
uncertain timeframe.
Deferred tax liabilities * Reviewing correspondence and other sources for
are recognised on certain evidence of impairment;
intangible assets following
business combinations
and these liabilities * Reviewing the recoverability of intercompany loans
are re-evaluated at each within the parent company and indicators of
reporting period end. impairment in investments in subsidiaries;
Any impairment in these
CGUs could lead to subsequent * Assessing the appropriateness and completeness of the
impairments in the parent related disclosures in note 8, intangible assets, of
company investments in the group financial statements; and
subsidiaries or intercompany
loans to these subsidiaries.
* Recalculating the deferred tax liability relating to
Due to the significance specific intangible assets and assessing applicable
of the intangible assets tax rates.
to the consolidated financial
statements, the significant
judgements involved in
these calculations and Based on our procedures,
the potential impact to we noted no material exceptions
parent company investments and considered management's
and intercompany loans, key assumptions to be within
the carrying value of reasonable ranges.
intangible assets is a
key audit matter.
---------------------------------------------------------------- -------------------------------------------------------------
Key audit matter How our audit addressed
the key audit matter
---------------------------------------------------------------- -------------------------------------------------------------
Revenue recognition
Revenue for the year was Our audit procedures included
GBP9.8m, representing the following:
a significant increase * Evaluating the Group's revenue recognition policy and
on 2016. Additionally, management's current year accounting assessment for
this is the first year the fair value of consideration receivable;
of production at Hernic,
leading to the recognition
of revenue from platinum * Confirming the implementation of the Group's policy
group metals ("PGM") concentrate to both PGM concentrate sales at Hernic and chromite
sales as well as chromite concentrate sales at DCM by performing tests to
concentrate. confirm our understanding of the process by which
revenue is calculated;
As required by IFRS as
adopted by the European
Union, an entity is required * Confirming that fair value measurements are
to recognise revenue at determined in accordance with IFRS 13;
the fair value of the
consideration received
or receivable when the * Comparing foreign exchange rates used in management's
following conditions have calculations;
been satisfied:
* the entity has transferred to the buyer the * Substantive tests agreeing concentrates to
significant risks and rewards of ownership of the weighbridge tickets and underlying calculations to
goods; terms stipulated in individual customer contracts ;
and
* the entity retains neither continuing managerial
involvement to the degree usually associated with * Assessing the appropriateness of the related
ownership nor effective control over the goods sold; disclosures in notes 1.1 and 3, revenue recognition
accounting policy and revenue split by commodity, of
the group financial statements.
* the amount of revenue can be measured reliably;
* it is probable that the economic benefits associated Based on our procedures,
with the transaction will flow to the entity; and we noted no material exceptions
and considered management's
key assumptions to be within
* the costs incurred or to be incurred in respect of reasonable ranges. We consider
the transaction can be measured reliably. that revenue recognition
has been recognised appropriately
and is in accordance with
the Group's revenue recognition
For the sale of chromite policy.
concentrate and PGM concentrate,
revenue is initially recognised
at the fair value of the
consideration receivable,
which is an estimate of
the final sales price
(see note 1.11, revenue
recognition accounting
policy, for the full revenue
recognition policy).
Due to the significance
of revenue to the consolidated
financial statements,
the judgement involved
in estimating consideration
receivable and this being
the first year of revenue
generated at the Hernic
project, revenue recognition
is a key audit matter.
---------------------------------------------------------------- -------------------------------------------------------------
Key audit matter How our audit addressed
the key audit matter
----------------------------------- --------------------------------------------------------------
Accounting for project
finance raised in the year
Our audit procedures included
The carrying value of project the following:
finance liabilities at * Reviewing loan agreements to determine all individual
30 June 2017 was GBP3.8m. cash flows necessary to calculate the effective
Funding was raised in the interest rate required to hold the loans at amortised
year to finance the construction cost;
and working capital of
the Hernic project.
* Recalculating the effective interest rate and the
These borrowings are required total liability as at 30 June 2017;
to be held at amortised
cost under IAS 39. Additionally,
when the conditions for * Reviewing loan agreements and other third party
borrowing costs to be capitalised evidence to determine when the conditions under IAS
are met these are required 23 where met to commence and cease capitalisation of
to be capitalised in accordance borrowing costs;
with IAS 23.
Due to the introduction * Recalculating the borrowing costs required to be
of new, and significant, capitalised during the year;
liabilities during the
year, together with the
requirement to capitalise * Comparing foreign exchange rates used in management's
certain elements of borrowing calculations; and
costs, accounting for project
finance is a key audit
matter. * Assessing the appropriateness and completeness of the
related disclosures in notes 19 and 21, other
financial liabilities and financial instruments.
Based on our procedures,
we noted no material exceptions
and considered that disclosures
relating to project finance
have been made appropriately.
----------------------------------- --------------------------------------------------------------
Our application of materiality
We apply the concept of materiality in planning and performing
our audit, in evaluating the effect of any identified misstatements
and in forming our opinion. Our overall objective as auditor is to
obtain reasonable assurance that the financial statements as a
whole are free from material misstatement, whether due to fraud or
error. We consider a misstatement to be material where it could
reasonably be expected to influence the economic decisions of the
users of the financial statements.
We have determined a materiality of GBP620,000 (2016:
GBP500,000) for both the Group and Company financial statements.
This is based on 1% of net assets prior to audit.
An overview of the scope of our audit
We tailored the scope of our audit to ensure that we obtained
sufficient evidence to support our opinion on the financial
statements as a whole, taking into account the structure of the
Group and the Company, the accounting processes and controls and
the industry in which the Group operates.
As Group auditors we carried out the audit of the Company
financial statements and, in accordance with ISA 600, obtained
sufficient evidence regarding the audit of seven subsidiaries
undertaken by component auditors in South Africa and Australia.
These seven subsidiaries were deemed to be significant to the Group
financial statements either due to their size or their risk
characteristics. The Group audit team directed, supervised and
reviewed the work of the component auditors in South Africa and
Australia, which involved issuing detailed instructions, holding
regular discussions with component audit teams, performing detailed
file reviews and visiting South Africa to attend local audit
meetings with management. Audit work in South Africa and Australia
was performed at materiality levels of GBP100,000, lower than Group
materiality.
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the Directors made
subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. We also
addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the
Directors that represented a risk of material misstatement due to
fraud.
Other information
The Directors are responsible for the other information. The
other information comprises the information included in the Annual
Report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information; we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the Strategic Report and the
Directors' Report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the Strategic Report and the Directors' Report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the Strategic Report or
the Directors' Report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements are not in agreement with the
accounting records and returns; or
-- certain disclosures of Directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we
require for our audit.
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities
Statement set out on page 20, the Directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the Directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
.........................................
Andrew Gaskell (Senior Statutory Auditor)
for and on behalf of Saffery Champness LLP
Chartered Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
9 November 2017
Annexure 2 - Headline earnings per share
Accounting policy
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
2/2013 issued by the South African Institute of Chartered
Accountants (SAICA).
30 June 2017 30 June 2016
Headline loss per share comprises
the following:
Continuing operations
Loss from continuing operations for
the period attributable to ordinary
shareholders (10 570) (3 412)
Impairment of other financial assets
net of tax 8 522 856
Loss on sale of property plant and
equipment - 1
Loss on exchange differences 72 81
------------------------------------------- -------- -------
Headline loss from continuing operations (1 976) (2 474)
------------------------------------------- -------- -------
Weighted average number of shares
in issue 984 780 906 241
Headline loss per share from continuing
operations (pence) (1.07) (0.27)
Headline loss per share from continuing
operations (ZAR cents) (18.55) (5.85)
Discontinued operations
Loss from discontinued operations
for the period attributable to ordinary
shareholders - (283)
Headline loss from discontinued operations - (283)
------------------------------------------- -------- -------
Weighted average number of shares
in issue 984 780 906 241
Headline loss per share from discontinued
operations (pence) - (0.03)
Headline loss per share from discontinued
operations (ZAR cents) - (0.67)
Average conversion rate used for
the period under review GBP:ZAR 0.05786 0.04667
------------------------------------------- -------- -------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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