Interim Report for the six months ended 31 December 2011

The Board of Jubilee Platinum, the AIM traded and JSE listed ‘mine-to-metals’ exploration and development company (the “Company” or “Jubilee”), is pleased to announce the interim results for the six months ended 31 December 2011.

 

HIGHLIGHTS IN THE PERIOD UNDER REVIEW

 

•    Company produced its initial platinum containing alloy for export, in March 2012 and will continue to increase the production of this material.

 

•    The new 5MVA furnace commissioned at Middelburg became operational in November 2011 with the Middelburg operation reaching a record production of 774 tonnes of ferroalloy in January 2012 and 818 tonnes in March 2012. Ramping up of the operation continues in order to reach targeted full production of 1200 tonnes of alloy per month.

 

•    The Middelburg site continues to increase revenues and generating cash flow in line with the ramp-up of the operation since November 2011.

 

•    Company focussed on advancing current and several new opportunities for ConRoast including potential rights to chromite tailings, existing joint ventures, securing prospecting and mining rights for its PGM-bearing chromite deposits in the western Bushveld.   

 

•    Tjate/Jubilee received a cash offer of ZAR75 million for Quartzhill farm portion of the Tjate platinum deposit – Quartzhill is considered not being core to Tjate’s long term mining plan.

 

•    A Mining Right Application has been submitted for the Tjate Platinum project.

 

•    Jubilee concluded a drilling program for new samples on the Leinster nickel sulphide tailings for testwork at Mintek South Africa.

 

•    The Company raised GBP4.422 million through a placing of 31 585 714 new Jubilee oridnary shares with major insitutional investors at a price of 14 pence (ZAR1.72)

 

Leon Coetzer, CEO of Jubilee Platinum commented: “The results for the six months period reflect the increased costs associated with the commissioning activities and operations ramp up of the new furnace installation. We are pleased to have reached measurable increases in production at the smelter operation on the back of the new furnace ramp up, reaching 818 tons of nickel rich ferroalloy in March 2012. We look forward to maintaining this momentum through the remainder of the financial year as we target 1200 tons per month of ferroalloy production. We continue with our plans to migrate the smelting  facility towards increasing the production of platinum rich alloy and to pursuing Tjate’s mining right application in order to advance the Tjate project.”

 

CHAIRMAN’S REPORT

 

Dear Shareholder,

 

The Company operated in a challenging six months period ending 31 December 2011 making significant positive progress in the implementation of its Mine-to-Metal business strategy.

 

In the period under review:

 

The Company on behalf of its subsidiary Tjate Platinum Corporation (Pty) Ltd (“Tjate Platinum”) received a ZAR75M cash offer from a major mining company for the Quartzhill farm, a portion of the Tjate Platinum’s Project. This offer represents a premium of nearly double the pro-rated original purchase price for the farm, which is not core to Tjate Platinum’s long-term mining plan for the project. This offer, which Jubilee is recommending to Tjate Platinum shareholders, is subject, inter alia, to the approval of 80% of Tjate Platinum shareholders, regulatory approvals and due diligence by the offeror. The offer is a vindication of Jubilee’s acquisition of a substantial interest in what is arguably the largest undeveloped block of platinum in the eastern Bushveld.

 

The Company awaits the Department of Mineral Resources’ (“DMR”) acceptance of Tjate Platinum’s application for a mining right.

 

Applications for other Jubilee projects being considered by the DMR include mining right applications by the Company’s subsidiary Maude Mining and Exploration for platinum to portions on Elandsdrift and Bokfontein farms; and a prospecting right for platinum and chromite in a separate venture for farms comprising more than 64 other portions of the Bokfontein farm.  

 

The Company’s new ferroalloy smelting furnace (5MVA AC) in Middelburg became operational in November 2011 with the Middelburg operation reaching in January 2012(post interims) a record 774 tonnes of ferroalloy production and a new high in March 2012 of 818 tonnes of ferroalloy. This steady progress in production ramp up of the new furnace reflects the successful use of improved refractory materials for the furnace shell lining and tap blocks resulting in materially less corrosion of the linings and in turn less furnace downtime. The increase in production has resulted in a strong increase in revenues generated by the operation (from November 2011 and post interims). The management continues to ramp up production towards its targeted design output of 1200 tonnes ferroalloy per month.

 

The Company continued its dialogue with Northam Platinum under its Memorandum of Understanding to establish a joint venture to evaluate the construction of a dedicated 5MW DC arc furnace facility using ConRoast technology specifically to smelt concentrate produced from Northam’s developing Booysendal mine in the eastern Bushveld.

 

The Department of Economic Development, Environment and Tourism issued the Company’s subsidiary Jubilee Smelting and Refining (Pty) Ltd. (“JSR”) in Middelburg with an Atmospheric Emission Licence in respect of its current and submitted new planned operations. JSR’s smelter operation is now fully permitted for the implementation of the ConRoast process and associated refining of the PGM containing alloy. This, together with maximising cash flow from the ferroalloy smelting process, significantly advances JSR’s medium term mission for the implementation of the complete ConRoast platinum smelting process and further strengthens its position in negotiations in sourcing PGM-rich chromite tailings.

 

The Company has continued to assess and enter into dialogue with owners of near-term PGM-rich chromite mining and tailings retreatment opportunities. Jubilee is in a unique position to avail itself of these opportunities due to its ability to process platinum concentrates containing high chrome values. The Company has submitted a bid for the processing of a platinum-bearing chromite tailings opportunity and expects the outcome of the bid to be announced within Quarter 2 of 2012. Processing of own platinum concentrates significantly enhances the business model for the Company.

 

In Madagascar, the Company’s 2011 planned drilling programme for the Ambodilafa project has been delayed due to difficulties with the local drilling contractor. The Company continues to review its strategic options for continued exploration in the country.

 

Jubilee’s Australian subsidiary, Braemore Nickel (Pty) Ltd (“Braemore”) concluded a drilling program on the Leinster nickel sulphide tailings to obtain fresh samples for testwork at Mintek South Africa, in order to refine the scoping flowsheet on the Nickel Tailings Project.

 

During the period under review, the Company made a loss attributable to shareholders of  £3,347,944 compared to a loss of £1,252,442 in the six months ended 31 December 2010.  The loss per share for the period under review was 1.24 pence against a loss of 0.76 pence for the interim period ending 31 December 2010. Of this 1.24 pence loss per share, depreciation accounted for 0.27 pence per share.

 

In October 2011, the Company raised £4.422 million gross through a placing with major institutions of 31,585,714 new ordinary shares of 1 pence each in the Company at 14p per share representing a 12% premium to the then prevailing market price.

 

 

Colin Bird

CHAIRMAN

29 March 2012

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the period ended 31 December 2011

Six months ended

Year ended

 

 

 

31 DEC 2011

Unaudited

£’000

 

31 DEC 2010

Unaudited

£’000

 

30 JUN 2011

Audited

£’000

 

Revenue

1 316

3 567

5 503

Cost of Sales

(1 102)

(2 168)

(5 241)

214

1 399

262

Negative goodwill

Other administrative expenses

(4 016)

(2 697)

(6 772)

Total administrative expenses

(4 016)

(2 697)

(6 772)

Operating loss

(3 802)

(1 298)

(6 510)

Finance income

15

46

149

Finance cost

(187)

(648)

Impairment loss on intangibles

(1)

Loss before  tax expense

(3 974)

(1 253)

(7 009)

Tax

–  

(580)

Loss for the year  after  tax expense

(3 974)

(1 253)

(7 589)

OTHER COMPREHENSIVE INCOME

Exchange gain on translation of foreign subsidiaries

(5 251)

4 116

Total comprehensive loss for the year

(9 225)

(3 473)

Loss attributable to:

 

Equity shareholders

(3 348)

(1 253)

(6 821)

Non-controlling interest

(626)

(768)

(3 974)

(1 253)

(7 589)

Total comprehensive income attributable to:

Equity shareholders

(8 599)

(1 253)

(2 705)

Non-controlling interest

(626)

(768)

(9 225)

(1 253)

(3 473)

Earnings per share

Basic and diluted loss per share (pence)

            (1.24)

(0.76)

(2.67)

‘000

‘000

‘000

Number of shares in issue

288 122

256 536

256 536

Weighted average number of shares in issue

270 269

165 593

255 835

CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION

As at 31 December 2011

31 DEC 2011

31 DEC 2010

30 JUN 2011

Unaudited

Unaudited

Audited

‘000

‘000

‘000

ASSETS

Intangible assets

84 277

86 125

88 222

Property, Plant and equipment

13 445

10 406

15 360

Deferred tax

519

519

Total non-current assets

98 241

96 531

104 101

Current assets

Trade and other receivables

1 762

3 025

3 121

Inventory

884

956

830

Cash and cash equivalents

2 315

9 987

2 007

Total current assets

4 961

13 968

5 958

TOTAL ASSETS

103 202

110 499

110 059

LIABILITIES

Non-current liabilities

Loans to and from related parties

Long-term liabilities

(1 690)

(2 504)

Deferred tax

(18 231)

(16 575)

(18 240)

Total non-current liabilities

(19 921)

(16 575)

(20 744)

Current liabilities

Contingent/Deferred consideration

(1 400)

Loans to and from related parties

(1 455)

(1 280)

Trade and other payables

(1 273)

(4 226)

(2 575)

Short term Liabilities

Tax

(878)

(625)    

(981)

 (625)

Total current liabilities

(4 231)

(5 626)

(5 461)

TOTAL LIABILITIES

(24 152)

(22 201)

(26 205)

NET ASSETS

79 050

88 298

83 854

 

EQUITY

Share capital

2 881

2 565

2 565

Share premium

61 701

57 595

57 595

Merger reserve

23 184

23 184

23 184

Share based payments reserve

5 171

3 548

5 171

Currency translation reserve

9 252

15 607

14 503

Retained deficit

(24 405)

(14 201)

(21 057)

TOTAL EQUITY

77 784

88 298

81 962

Equity interest of non-controlling interest

1 266

1 892

NET EQUITY

79 050

88 298

83 854



CONSOLIDATED AND COMPANY STATEMENTS OF CASH FLOWS 

For the period ended 31 December 2011

Six months ended

Year ended

31 DEC 2011

31 DEC 2010

30 JUN 2011

Unaudited

Unaudited

Audited

‘000

‘000

‘000

Cash flows from operating activities

Loss for the year

(3 974)

(1 253)

(7 009)

Finance income

(15)

46

(149)

Finance expense

187

648

Depreciation

727

22

1 278

Share based payment

543

766

Other non-cash movements

5 220

Impairment of intangibles

Amortisation of intangibles

520

545

1 221

Profit on sale of property, plant and equipment

(Increase) / Decrease  in inventory

(54)

(274)

(148)

(Increase) / Decrease in receivables

1 359

5 334

(2 191)

(Decrease) / Increase in payables

(1 302)

2 459

(1 321)

Net cash from operating activities

(2 552)

12 642

(6 905)

Cash flows from investing activities

Increase in loans and investments

(465)

Acquisition of subsidiary, net of cash acquired

(6 578)

Acquisition of non-controlling interest

Proceeds from sale of property, plant and equipment

Funding of deposit account for business combination

7 652

(Purchase) / disposal of intangible fixed assets

(899)

(5 419)

(2 284)

Purchase of property, plant and equipment

(663)

(10 406)

(1 472)

Net cash used in investing activities

 

 

(1 562)

(16 290)

(2 682)

Cash flows from financing activities

Issue of shares and warrants

4 422

638

Issue costs

Acquisition of non-controlling interest

(1 640)

Net cash generated from financing activities

4 422

638

(1 640)

Net (decrease) / increase in cash and cash equivalents

308

(3 010)

(11 227)

Cash and cash equivalents at beginning of the year

2 007

12 997

12 997

Effects of foreign exchange on cash and cash equivalents

237

Cash and cash equivalents at the end of the year

2 315

9 987

2 007



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the period ended 31 December 2011

Share capital

 

Share

premium

Merger reserve

Share based payment reserve

Currency translation reserve

Retained deficit

 

 

Non- controlling interest

Total equity

Group

£’000

 

£’000

£’000

£’000

£’000

£’000

£’000

£’000

Balance at 1 July 2010

2 545

56 977

23 184

3 005

10 387

(12 948)

83 150

Issue of share capital

20

618

638

Share-based payment charge

766

766

Deferred consideration transferred

1 400

1 400

Total comprehensive loss for the year

4 116

(6 821)

(768)

(3 473)

Acquistion of subsidiary

3 012

3012

Acquisition of non-controlling interest

(1 288)

(352)

(1 640)

Balance at 30 June 2011

2 565

57 595

23 184

5 171

14 503

(21 057)

1 892

83 854

Issue of share capital

316

4 106

4 422

Share-based payment charge

Total comprehensive loss for the year

(5 251)

(3 348)

(626)

(9 225)

Acquisition of subsidiary

Acquisition of non-controlling interest

Balance at 31 December 2011

2 881

61 701

23 184

5 171

9 252

(24 405)

1 266

79 050

Notes to Interim Financial Statements

1. Basis of preparation

These financial statements have been prepared in accordance with the framework concepts and the measurement and recognition requirements of IFRS and the AC 500 standards as issued by the accounting practices board and containing the information required by IAS 34: Interim Financial Reporting. 

The accounting policies have been applied consistently throughout the Group and are consistent with those for the financial year ended 31 June 2011.

 

2. Commitments and contingencies                                                

There are no material contingent assets or liabilities at 31 December 2011.

        

Capital commitments at 31 December 2011

DEC 2011

JUN 2011

£’000

£’000

Not longer than one year

22

22

Longer than one year and not longer than five years

48

 59

Total

70

81

 

3. Dividend                                             

No Dividends were declared during the period ended 31 December 2011.

 

4. Board                                             

No changes were made to the Board of Directors.

 

5. Business segments                                              

In the opinion of the Directors, the operations of the Group companies comprise five reporting segments, being

 

·      the evaluation and development of PGM smelters utilising exclusive commercialisation rights of the ConRoast smelting process, located in South Africa (“Evaluation 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”), and

·      Development of Platinum Group Elements (PGE’s) and associated metals (“PGE development”).

·      Base Metal Smelting in South Africa

·      Electricity Generation

 

 

The Parent Company operates a head office based in the United Kingdom which incurred certain administration and corporate costs.  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.

 

South Africa

Evaluation and development

Year ended

31 December

2011

Australia

Nickel tailings

Year ended

31 December

2011

South Africa

PGE development

Year ended

31 December

2011

Corporate

(Unallocated)

Year ended

31 December

2011

South Africa

Base Metal Smelting

Year ended

31 December

2011

South Africa

Electricity Generation

Year ended

31 December

2011

Total

Year ended

31 December

2011

£

£

£

£

£

£

£

Total revenues

2,263

1,181

3,444

Intercompany revenue

(947)

(1,181)

(2,128)

Revenue from external customers

1,316

1,316

Loss before taxation

(690)

(54)

(143)

(805)

(2,772)

490

(3,974)

Taxation

Loss after taxation

(690)

(54)

(143)

(805)

(2,772)

490

(3,974)

Interest received

10

5

15

Interest paid

10

177

187

Depreciation and Amortisation

525

5

1

507

209

1,247

Total assets

46,164

23,756

11,929

2,943

12,117

6,293

103,202

Total liabilities

(6)

(14)

(18,785)

(5,344)

(3)

(24,152)

 

 

 

South Africa

Evaluation and development

Year ended

30 June

2011

Australia

Nickel tailings

Year ended

30 June

2011

South Africa

PGE development

Year ended

30 June

2011

Corporate

(Unallocated)

Year ended

30 June

2011

South Africa

Base Metal Smelting

Year ended

30 June

2011

South Africa

Electricity Generation

Year ended

30 June

2011

Total

Year ended

30 June

2011

£

£

£

£

£

£

£

Total revenues

2,515

4,404

1,890

8,808

Intercompany revenue

(1,416)

(1,890)

(4,793)

Revenue from external customers

2,515

2,988

5,503

Loss before taxation

(482)

60

(1,451)

(1,756)

(3,608)

288

(7,009)

Taxation

(24)

(1)

(419)

(136)

(580)

Loss after taxation

(482)

36

(1,451)

(1,756

(4,027)

92

(7,589)

Interest received

68

72

9

149

Interest paid

4

643

647

Depreciation and Amortisation

11

6

1,168

8

1,090

216

2,499

Total assets

48,141

24,964

12,438

3,127

11,931

6,563

107,163

Total liabilities

(756)

(3)

(310)

(18,731)

(3,971)

(3,359)

(27,131)

 

 

 

 

South Africa

Evaluation

and

development

Australia

Nickel

tailings

South Africa

PGE

development

Corporate

(Unallocated)

South Africa

Base Metal

Smelting

South Africa

Electricity

Generation

Total

Year ended

31 December

Year ended

31 December

Year ended

31 December

Year ended

31 December

Year ended

31 December

Year ended

31 December

Year ended

31 December

2010

2010

2010

2010

2010

2010

2010

£

£

£

£

£

£

£

Loss on ordinary activities

40

(95)

(1,198)

(1,253)

Total assets

18,396

64,177

5,725

88,298

 

 

6. Loss per share and headline loss per share

The loss at 31 December 2011 to shareholders is £3,348 million (31 DEC 2010 loss £1,253 million). This is divided by the weighted average number of ordinary shares in issue calculated to be 270,269,750  (31 DEC 2011  163,593,604).

 

The fully diluted loss per share is based on the loss for the financial year divided by the weighted average number of shares and potential shares being 270,269,750 (DEC 2010: 163,593,604) in issue during the year. As the options are non-dilutive, no diluted loss per share has been calculated.

 

DEC 2011

‘000

DEC 2010

‘000

Ordinary shares (weighted average)

270,270

163,594

Effect of options issued at fair value (weighted average)

270,270

163,594

 

RECONCILIATION OF HEADLINE LOSS

 

DEC 2011

‘000

DEC 2010

‘000

Loss attributable to Jubilee Platinum Plc shareholders

(3,348)

(1,253)

Impairment of assets

Loss on disposal of foreign subsidiary

Loss on disposal of plant and equipment

Headline loss

(3,348)

(1,253)

Headline loss per share (pence)

(1.24)

(0.76)

Diluted loss earnings per share (pence)

(1.24)

(0.76)

 

7. Shares Issued                                             

In October, the Company raised £4.422 million through a placing with major institutions of 31,585,714 new ordinary shares of 1 pence each in the Company at 14 p per share representing a 12% premium to the then prevailing market price.

8. Interim Report                                              

Copies of the interim report are available to the public free of charge from the Company at 4th Floor, Cromwell Place, London, SW7 2Je and from Building B, 1st Floor, corner Witkoppen Road and Waterford Place, Paulshof, Johannesburg, during normal office hours for 30 days from the date of this report and available for download from www.jubileeplatinum.com

Enquiries:

 

Jubilee Platinum plc                          

Colin Bird/Leon Coetzer/Andrew Sarosi         

Tel +44 (0) 20 7584 2155 / Tel +27 (0) 11 465 1913/+44 (0) 1752 221937

 

finnCap Ltd

Matthew Robinson/Ben Thompson – corporate finance

Joanna Weaving – corporate broking

Tel +44 (0) 20 7220 0500

 

Shore Capital Stockbrokers Limited (Joint Broker)

Jerry Keen/ Edward Mansfield

Tel: +44 (0) 20 7 408 4090

 

Sasfin Capital

Leonard Eiser /Sharon Owens

Tel +27 (0) 11 809 7500

 

Bishopsgate Communications Ltd

Nick Rome/Shabnam Bashir

Tel +44 (0) 20 7562 3350