Interim Results

Interim Report

for the six months ended 31 December 2010

 

The Board of Jubilee Platinum, the AIM traded and JSE listed mine to metal specialist, is pleased to announce the interim results for the six months ended 31 December 2010.

 

Highlights

 

– First stage infill drilling programme for the Tjate project completed with exceptional results achieved

                                   

– Drill data confirm continuity of Merensky and UG2 Reefs, with significantly improved grade and thickness for the UG2 reef

 

– Application for a Mining Right for Tjate initiated on these encouraging drilling results

 

– Delivery times for long-lead items successfully negotiated to ensure new ConRoast 5MW DC Arc furnace remains on track for Q4 2011

 

– Existing ferroalloys processing infrastructure at Middelburg fully utilised and contributing to short-term cash flows

 

– Commenced installation of a new ferroalloy 5MW AC Arc furnace and capacity fully contracted

 

– MoU agreement entered into with Northam Platinum to evaluate joint venture using ConRoast process

 

– Drilling contract awarded to local Madagascan company for the Ambodilafa project

 

CHAIRMAN’S REPORT                                                        

 

Dear Shareholder,

 

The Company has enjoyed a very positive and successful period for the six months ended 31 December 2010, making significant progress in the implementation of its Mine-to-Metal business strategy.

 

In the period under review

 

The Company’s Tjate project completed (January 2011) its stage 1 infill-drilling programme, which achieved exceptional results that confirmed the quality of the project and its suitability for development. The results furthermore confirmed continuity of both the Merensky and the UG2 Reefs and in particular those for the UG2 showed both improved platinum group metals (“PGM”) grade and reef thickness compared with previous results. Encouraged by these results Tjate Platinum Corporation (Pty) Ltd commenced initiation of an application for a Mining Right for Tjate.

 

The Company was made good progress with its ConRoast project. It completed a detailed engineering design for a new ConRoast 5MW DC arc furnace, which is targeted for commissioning in Q4 2011 and which will be able to treat high chrome PGM-bearing material from, inter alia, Northam and Sylvania Resources.

The Company successfully concluded negotiations for delivery of the long lead

items for this furnace facility.

 

In developing its longer-term Mine-to-Metal strategy the Company entered into a Memorandum of Understanding with Northam Platinum to establish a joint venture to evaluate the construction of a second 5MW DC arc furnace facility using ConRoast technology specifically to smelt concentrate emanating from Northam’s developing Booysendal mine. The Company also continued to assess numerous small-scale near term mining opportunities, which are being presented to it, due to our ability to process platinum concentrates containing high chrome values. Processing of own platinum concentrates significantly enhances the business model for the Company.

 

The Company progressed its joint venture (smelting collaboration) with Sylvania resources – processing platinum concentrate from Sylvania’s developing Volspruit project. This collaboration remains on schedule with all roasting and smelting trials concluded as specified within the scoping study. The Company delivered the PGM-rich iron alloy from these trials to the CVMR company in Canada for refining trials.

 

The Company successfully concluded a feasibility study on CVMR refining of its own ConRoast product, the results of which demonstrated the ability to produce high purity nickel, iron and cobalt powders and a high grade PGM product at recoveries in excess of 99% for nickel, iron and PGMs. These base metal powders command premium market prices.

 

The Company strengthened the operational management at its 70% owned ferroalloy processing division (RST Metals (Pty) Ltd) in Middelburg with consequent improvement in short-term cash flow. In order to take advantage of the buoyant market for ferronickel, the Company commenced the installation of a new 5MW ferroalloy furnace, the capacity for which is fully contracted and which will increase the division’s contribution to the Company’s overall business plan when operational in Q2 of this year.

 

The Company acquired a majority control (51%) of Power Alt’s gas-fired 11MW power generator on the Middelburg site for R27 million (approximately GBP±2,425) with an option to acquire additional equity. This acquisition, which has the conditional rights to generate up to 33MW power, minimises the Company’s dependence on the national grid, offsets it power costs and has the potential to become a power supplier.

 

In Madagascar the Company awarded a contract to a local company to drill on its Ambodilafa concession. The local company commenced mobilising to site during Q1 2011.

 

During the period under review, the Company made a loss of £1,252,442 against a loss of £2,246,000 in the six months ended 31 December 2009. The loss per share for the period under review was 77 pence against a loss of 82 pence for the interim period ended 31 December 2009.

 

The platinum price has remained buoyant during the crisis and at the time of writing continues to demonstrate further price growth potential.

 

The Company’s satisfactory progress on its major ConRoast project, further definition of the Tjate mineral resource and peripheral projects provides a broad base and critical mass, from which to develop and further enhance shareholder value in a period of strong platinum price predictions.

 

Colin Bird

Chairman

 

28 March 2011

 

Consolidated Statement of Comprehensive Income                                

For the six months ended 31 December 2010                                    

                                                       For the               

                                       For the      six months               

                                    six months           ended            Year

                                         ended     31 Dec 2009           ended

                                   31 Dec 2010       Unaudited     30 Jun 2010

                                     Unaudited        Restated         Audited

                                         £’000           £’000           £’000

                                                                             

Revenue                                  3,567             237             950

Cost of sales                          (2,168)           (193)           (458)

                                         1,399              44             492

Negative goodwill                            –               –           1,615

Other administrative expenses          (2,697)         (1,791)         (4,503)

Total administrative expenses          (2,697)         (1,791)         (2,888)

Operating loss                         (1,298)         (1,747)         (2,396)

Finance income                              46              20             168

Profit on exchange rate                      –               –               –

Goodwill written off                         –           (519)               –

Impairment loss on intangibles             (1)               –               –

Loss before tax expense                (1,253)         (2,246)         (2,228)

Income tax expense                           –               –               –

Loss for the period after income                                              

tax expense                            (1,253)         (2,246)         (2,228)

Number of shares in issue          256,536,092     229,550,922     254,463,290

Weighted average number of shares                                             

in issue                           163,593,604     270,555,886     162,951,035

Diluted weighted average number of                                           

shares in issue                    165,558,569     275,900,886     164,916,000

Basic loss per share (pence)            (0.77)          (0.82)          (1.35)

Diluted loss per share (pence)          (0.76)          (0.81)          (1.35)

Headline loss per share (pence)         (0.76)          (0.81)          (1.35)

Reconciliation of headline loss:                                             

Loss attributable to                                                         

Jubilee Platinum Plc shareholders      (1,253)         (2,246)         (2,228)

Impairment of assets                         –               –               –

Loss on disposal of foreign subsidiary       –               –               –

Loss on disposal of plant and equipment      –               –               –

Headline loss                          (1,253)         (2,246)         (2,228)

Headline loss per share (pence)         (0.76)          (0.81)          (1.35)

  

Consolidated Statements of Financial Position

As at 30 December 2010

                                                   31 Dec 2009                

                                   31 Dec 2010        Restated     30 Jun 2010

                                     Unaudited       Unaudited         Audited

                                         £’000           £’000           £’000

ASSETS                                                              

Non-current assets                                                           

Intangible assets                       86,125          60,317          80,706

Property, plant and equipment           10,406           2,924             112

Other receivables                            –              54               –

Total non-current assets                96,531          63,295          80,818

Current assets                                                                

Trade and other receivables              3,025           1,244           8,359

Inventory                                  956             276             682

Cash and cash equivalents                9,987          16,572          12,997

Total current assets                    13,968          18,092          22,038

TOTAL ASSETS                           110,499          81,387         102,856

LIABILITIES                                                                  

Non-current liabilities                                                      

Deferred tax                          (16,575)               –        (16,575)

Current liabilities                                                          

Contingent/Deferred consideration      (1,400)               –         (1,400)

Trade and other payables               (4,226)         (2,121)         (1,731)

Total current liabilities              (5,626)         (2,121)         (3,131)

TOTAL LIABILITIES                     (22,201)         (2,121)        (19,706)

NET ASSETS                              88,298          79,266          83,150

EQUITY                                                                       

Share capital                            2,565           2,296           2,545

Share premium                           57,595          55,366          56,977

Merger reserve                          23,184          23,184          23,184

Share-based payments reserve             3,548           1,678           3,005

Currency translation reserve            15,607           9,703          10,387

Retained earnings                     (14,201)        (12,961)        (12,948)

TOTAL EQUITY                            88,298          79,266          83,150

 

Consolidated Statement of Changes in Equity                                  

For the six months ended 31 December 2010                                    

                                                           Share-            

                                                            based      Foreign

                        Share       Share      Merger     payment     exchange

                      capital     premium     reserve     reserve      reserve

                                                                              

Group                   £’000       £’000       £’000       £’000        £’000

Balance at 1 July 2009  1,184      33,855       4,970       1,678        6,776

Issue of share capital  1,112           –           –           –            –

Premium on issue of  

share capital               –      21,511      18,214           –            –

Goodwill translation        –           –           –           –          993

Net loss for the period     –           –           –           –            –

Currency translation 

difference                  –           –           –           –         (19)

Balance at 31December

2009                    2,296      55,366      23,184       1,678        7,750

Issue of share capital    249           –           –           –            –

Premium on issue of  

shares                      –       2,685           –           –            –

Issue costs                 –     (1,074)           –           –            –

Share-based payment  

charge                      –           –           –       1,327            –

Total comprehensive  

income for the period       –           –           –           –        2,637

Balance at 30 June   

2010                    2,545      56,977      23,184       3,005       10,387

Issue of share capital     20           –           –           –            –

Premium on issue of  

share capital               –         618           –           –            –

Share-based payment  

charge                      –           –           –         543            –

Net loss for the     

period                      –           –           –           –            –

Currency translation        –           –           –           –        5,220

Balance at 31        

December 2010           2,565      57,595      23,184       3,548       15,607

 

                                   Other     Minority     Retained       Total

                                reserves     Interest     earnings      equity

                                                                             

Group                              £’000        £’000        £’000       £’000

Balance at 1 July 2009                 –            –     (10,720)      37,743

Issue of share capital                 –            –            –       1,112

Premium on issue of share      

capital                                –            –            –      39,725

Goodwill translation                   –            –            –         993

Net loss for the period                –            –      (2,241)     (2,241)

Currency translation difference        –            –            –        (19)

Balance at 31December 2009             –            –     (12,961)      79,266

Issue of share capital                 –            –            –         249

Premium on issue of shares             –            –            –       2,685

Issue costs                            –            –            –     (1,074)

Share-based payment charge             –            –            –       1,327

Total comprehensive income for 

the period                             –            –           13       2,650

Balance at 30 June 2010                –            –     (12,948)      83,150

Issue of share capital                 –            –            –          20

Premium on issue of share      

capital                                –            –            –         618

Share-based payment charge             –            –            –         543

Net loss for the period                –            –      (1,253)     (1,253)

Currency translation                   –            –            –       5,220

Balance at 31 December 2010            –            –     (14,201)      88,298

 

Condensed Consolidated Statement of Cash Flows

For the six months ended 31 December 2010

                                                       Six months            

                                        Six months          ended         Year

                                             ended         31 Dec        ended

                                            31 Dec           2009       30 Jun

                                              2010       Restated         2010

                                         Unaudited      Unaudited      Audited

                                             £’000          £’000        £’000

                                                                              

Cash flows from operating activities                                         

Loss for the period                        (1,253)        (2,246)      (2,228)

Finance income                                  46             20          168

Depreciation                                    22            320           74

Share-based payment                            543              –        1,327

Other non-cash movements                     5,220        (1,142)            –

Amortisation of intangibles                    545              –          327

Profit on sale of property, plant and  

equipment                                        –        (1,735)         (11)

Decrease/(Increase) in inventory             (274)          (277)          241

Decrease/(Increase) in receivables           5,334        (2,777)        1,128

(Decrease)/Increase in payables              2,459          1,573     (10,454)

Net cash used in operating activities       12,642        (6,264)      (9,428)

Cash flows from investing activities                                         

Increase in loans and investments            (465)              –            –

Acquisition of subsidiary, net of cash acquired  –              –          223

Proceeds from sale of property, plant  

and equipment                                    –              –           47

Funding of deposit account for business

combination                                      –              –      (7,652)

Purchase of intangible fixed assets        (5,419)          (112)        (888)

Purchase of property, plant and        

equipment                                 (10,406)              –         (25)

Net cash used in investing activities     (16,290)          (112)      (8,295)

Cash flows from financing activities                                         

Issue of shares and warrants                   638         15,307       23,992

Issue costs                                      –              –      (1,074)

Net cash generated from financing      

activities                                     638         15,307       22,918

Net increase/(decrease) in cash and                                          

cash equivalents                           (3,010)          8,931        5,195

Cash and cash equivalents                                                    

at beginning of the period                  12,997          7,641        7,641

Effects of foreign exchange on cash and                                       

cash equivalents                                 –              –          161

Cash and cash equivalents at end of the

period                                       9,987         16,572       12,997

 

Notes to the financial results

 

1. The interim financial information for the six months ended 31 December 2010 is unaudited. The interim accounts have been prepared in accordance with the recognition, measurement and presentation and disclosure requirements of International Financial Reporting Standards, including IAS 34: Interim Financial Reporting, AC 500 Standards, the Companies Act, 1973, and the JSE Limited Listings Requirements. The accounting policies have been applied

consistently through the Group and are consistent with those for the year ended 30 June 2010. The interim statement was approved by the Board on

29 March 2011.

 

2. Segmental analysis

Business segments

 

The Group’s only business segment is the exploration and development of Platinum Group Metals (PGMs) and associated metals.

 

Geographical segments

 

An analysis of loss on ordinary activities before taxation, net assets and exploration expenditure by geographical area is given below:

 

                                              Six months ended      Year ended

                                                       31 Dec 2009      30 Jun

                                       31 Dec 2010        Restated        2010

                                             £’000           £’000       £’000

                                                                              

Loss on ordinary activities                                                  

                                                                             

United Kingdom                             (1,198)         (1,406)     (3,168)

South Africa                                  (48)         (1,042)       (430)

Australia                                       40             165       1,370

Madagascar                                    (46)              38           –

Mauritius                                      (1)             (1)           –

Total loss                                 (1,253)         (2,246)     (2,228)

 

Net assets by location

                                              Six months ended

                                   31 Dec 2010     31 Dec 2009     30 Jun 2010

                                         £’000           £’000           £’000

United Kingdom                           5,725          42,769           3,477

                                                                              

South Africa                            63,862          33,185          61,277

Australia                               18,396           2,999          18,396

Madagascar                                 315             305               –

Mauritius                                    –               8               –

Total net assets                        88,298          79,266          83,150

 

3. Loss per share

 

                                  Six months        Six months               

                                       ended      ended 31 Dec      Year ended

                                 31 Dec 2010     2009 Restated     30 Jun 2010

                                       £’000             £’000           £’000

                                                                             

Loss for the financial period        (1,253)           (2,246)         (2,228)

Weighted average number of      

shares in issue                  163,593,604       270,555,886     162,951,035

Dilutive effect of share options   1,964,965         5,345,000       1,964,965

Basic loss per share (pence)          (0.77)            (0.82)          (1.35)

Diluted loss per share (pence)        (0.76)            (0.81)          (1.35)

 

4. No dividend was declared during the period ended 31 December 2010 (December 2009: Nil).

 

5. On 22 December 2010, the Group allotted and issued 1,222,004 new ordinary shares of 1p each in Jubilee. These shares were issued as payment for the feasibility study of the CVMR project.

 

On 17 August 2010, the Group allotted and issued 850,798 new ordinary shares of 1p each in Jubilee. These shares were issued following the deemed achievement of K-Plats performance hurdle. These shares were the final payment in settling the K-Plats contract.

 

6. No changes were made to the Board of Directors to date.

 

7. During the period under review Saffery Champness resigned as Auditors of the Company and BDO Spencer Steward (JHB) Inc. were appointed in their stead.

 

8. 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

 

9. The profit on exchange, £1,953,000, previously stated as an income in the interim report of 31 December 2009, was restated during June 2010 and capitalised to the currency translation reserve.

 

Enquiries:                                                                    

                                                                             

Jubilee Platinum plc                                                         

Colin Bird, Chairman

Leon Coetzer, CEO                                         +27 (0) 11 465 1913

Jubilee Platinum plc                                                         

Andrew Sarosi                                             +44 (0) 1752 221937

finnCap                                                                      

Matthew Robinson, Corporate Finance                      +44 (0) 20 7600 1658

Joanna Weaving, Corporate Broking 

                                           

Sasfin Capital                                                               

Leonard Eiser, Corporate Finance                          +27 (0) 11 809 7738

Bishopsgate Communications Ltd                                               

Nick Rome                                                +44 (0) 20 7562 3350

Michael Kinirons                                                              

 

Administrative information:

 

Directors

              

Colin Bird (Chairman)

Dr M Phosa (Non-Executive Director)

Leon Coetzer (Chief Executive Officer)

Andrew Sarosi (Executive Director)

Chris Molefe (Non-Executive Director)

Eduard Victor (Financial Director)

                                                                           

Secretary

                  

Stephen Ronaldson (UK)

Fusion Corporate Secretarial Services (Pty) Ltd (SA)

(Represented by Melinda van den Berg)

 

Registered office

    

United Kingdom   

4th Floor        

2 Cromwell Place 

London SW7 2JE   

 

South Africa

Building B

1st Floor

Corner Witkoppen Road and Waterford Place, Paulshof, 2191

 

Auditors

                

United Kingdom            

BDO Stoy Hayward LLP      

55 Baker Street           

London W1U 7EU            

United Kingdom            

 

South Africa

BDO Spencer Steward (JHB) Inc

13 Wellington Road

Parktown

Johannesburg, 2193

 

Nominated adviser and broker

              

finnCap

60 New Broad Street

London EC2MIJJ

 

Sponsor

                 

Sasfin Capital

Sasfin Place

29 Scott Street

Waverley 2090

 

Bankers 

                   

National Westminster Bank plc

246 Regent Street

London W1B 3PB

 

Registrars

            

United Kingdom              

Capita Registrars 

Northern House

Woodsome Park Fenay Bridge  

Huddersfield HD8 0GA

 

South Africa

Computershare Investor Services

(Pty) Ltd

70 Marshall Street

Johannesburg, 2001

 

Solicitors 

              

United Kingdom               

Fasken Marineau             

17 Hanover Square           

London W1S 1HU              

 

South Africa

Eversheds

22 Fredman Drive

Sandton, 2196