Interim Results

REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2012

 

 

The directors of JSE listed and AIM traded Jubilee, the ‘Mine-to-Metals’ exploration and development company, are pleased to announce the reviewed interim results for the six months ended 31 December 2012.

 

FINANCIAL HIGHLIGHTS

 

• Revenues continue to improve in-line with the ramp-up of the smelter operations. Revenue increased by 61.5% to £2.1 million for the half year under review compared to the equivalent period in 2011 financials (£1.3 million 2011).

 

• Gross profit increased to £750.000, which reflects the increased throughput achieved at the operations over the period under review (£214.000 2011).

 

• Sale of electricity commenced on 23 December 2012. The impact on the Company’s income statement of the private sale of 5.1MW of electricity will only be fully reflected in the next financial period of the Company.

 

OPERATIONAL HIGHLIGHTS

 

• The Company secured the rights to recover platinum group-elements (PGEs) from an estimated 800.000 tonnes of PGE-bearing chromite tailings (“Tailings”) and from current arisings on the Dilokong Chromite Mine in the Eastern Bushveld of South Africa.

 

• The Company’s subsidiary Pollux Investment Holdings (Pty) Limited (“Pollux”) formalised a binding and exclusive memorandum of understanding with Phokathaba Platinum (Pty) Limited (“Phokathaba”) to process the Tailings in its nearby Smokey Hills mine concentrator. Phokathaba is a subsidiary of the Australian Stock Exchange (“ASX”)-listed Platinum Australia Limited (“PLA”), which is currently under administration. This arrangement has accelerated the timeline for production from the Tailings by an estimated 18 months and eliminated the capital investment for a new concentrator.

 

• On 25 February 2013 the Company entered into an implementation deed and supporting transactional documents with PLA relating to the acquisition of PLA by Jubilee to be effected by way of a scheme of arrangement in terms of Australian law and subject to PLA and Jubilee shareholders’ approval under which:

 

–   Jubilee will acquire the entire issued share capital of Platinum Australia (“Acquisition”);

–   PLA will be delisted from the ASX and become a wholly-owned subsidiary of Jubilee;

–   Jubilee will undertake a specific issue of shares for cash to extinguish certain PLA creditors in accordance with the terms of a creditor compromise;

–   Jubilee will undertake a specific issue of shares for cash to extinguish approximately 50% of the debt held by the senior creditor in PLA; and

–   Jubilee will procure project funding for the recommissioning of Smokey Hills of approximately ZAR190 million. The funding is targeted at project level financing to minimise dilution of Jubilee shareholders.

A circular containing full details of the acquisition will be posted during April 2013.

 

• The Company increased its shareholding in PowerAlt (Pty) Ltd (“PowerAlt”) from 51% to 70% by way of issuance of Jubilee ordinary shares equivalent in value to ZAR13.1 million. Refer to note 13.1.

 

• PowerAlt received approval from the national energy provider of South Africa for the sale of up to 5.1 MW generated electricity to South Africa’s national power-generating company. Sale of electricity commenced in December 2012 and the full 5.1 MW sale target was achieved in January 2013. PowerAlt secured an option to increase the contracted sale of electricity generated to 10.7 MW.

 

• The Company increased its shareholding to 100% in its subsidiary Jubilee Smelting and Refining (Pty) Ltd through an earn-in agreement based on the capital invested by Jubilee. Jubilee consequently holds 100% of its smelting facility RST Special Metals (Pty) Ltd in Middelburg South Africa.

 

• The Company’s subsidiary Tjate Platinum Corporation (Pty) Ltd (“Tjate”) signed a term sheet in relation to a cash offer from a major mining company of ZAR75 million for Quartzhill farm portion. Quartzhill is considered non-core to Tjate’s long-term mining plan.

 

• The Company executed and formalised a heads of agreement with Australian registered and unlisted Indian Pacific Resources Ltd, for the Company to farm-in up to a 90% interest in an iron-ore prospect on the Company’s Ambodilafa tenement area in Madagascar. The farm-in excludes PGEs and all non-ferrous metals. The agreement permits exploration and drilling to continue on the Ambodilafa property without funding from Jubilee. Drilling is expected

to commence shortly.

 

• The Company commenced formalising its collaboration with Northam Platinum Ltd (“Northam”) in regard to Northam’s letter of intent to enter into an agreement to establish a joint venture to evaluate the construction of a dedicated 5 MW DC arc furnace facility using ConRoast technology specifically to smelt concentrate produced from Northam’s developing Booysendal mine in the Eastern Bushveld.

 

• On 19 October 2012 the Company placed 25 098 405 new ordinary shares to raise £1.73 million with major institutional investors.

 

 

 

 

CHAIRMAN’S REPORT

 

Dear Shareholder,

 

The South African platinum industry continued to suffer many challenges during the period under review. The underlying issues were continuing low platinum prices, adverse exchange rates and labour unrest on certain platinum mining operations in the Bushveld complex. The impact on major platinum producers was significant and has resulted in short-term corrective decisions which undoubtedly will have mid-term adverse effects on supply fundamentals.

 

Jubilee continued with its Mine-to-Metal strategy fully aware that the aforementioned difficulties might offer benefits to a small producer whose business model was dedicated to high chrome PGM sources and small mining operations. In general all opportunities explored were enhanced by the Company’s ownership of the ConRoast license.

 

Jubilee recognised the benefits to be offered by the Smokey Hills mine concentrator when it unfortunately ran out of feed because of the Smokey Hills mine closure. The acquisition of the right to use the concentrator accelerated our Mine-to-Metal strategy both in time and cost. A close examination of the Smokey Hills mine led management to the conclusion that a total acquisition would be more beneficial to our shareholders than a toll treatment arrangement. This rationale was further supported by the other small mining projects contained in the PLA portfolio of assets.

 

The completion of the scheme of arrangement between Jubilee and PLA will result in an Enlarged Group with excellent prospects in the smaller niche of the platinum industry. Projects being considered will generally have the use and benefits of our ConRoast license. With the exception of the Tjate underground mine, all of the enlarged Group’s projects will be small with limited mine life, low cost of entry and chrome based. We believe that this specific

business model presents extraordinary advantages in the mid-term, i.e. capital requirements are lower, manpower numbers are smaller and smelting issues currently being experienced in the industry can be overcome by the use of the ConRoast process. The PLA merger, whilst providing the aforementioned advantages, is driven by the early cash flow that the Dilokong tailings will be able to provide along with other possible input feeds being considered.

 

The board of the Company’s subsidiary Tjate approved a ZAR75 million cash offer (“Offer”) from a major mining company for the Quartzhill farm (“Quartzhill”), a portion of the Tjate Platinum’s Project and signed a Term Sheet in this regard. The parties to the Term Sheet have commenced formalising the Offer, which is still subject, inter alia, to regulatory approvals.

 

This Offer represents a pro rata premium of nearly double the original purchase price for the farm, which is not core to Tjate Platinum’s long-term mining plan for the project. 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.

 

The DMR is also still considering applications for Jubilee’s other projects including platinum mining right applications by the Company’s subsidiary Maude Mining and Exploration (Pty) Ltd to portions on Elandsdrift and Bokfontein farms and prospecting rights for platinum and chromite in a separate venture for farms comprising more than 64 other portions of the Bokfontein farm.

 

On 19 October 2012 the Company placed 25 175 439 new Jubilee ordinary shares to raise £1.73 million with major institutional investors at a price of 8.55 pence per share.

 

Post-period under review, the Company, on 10 January 2013, issued the 15 757 576 ordinary shares under a Standby Equity Distribution Agreement (“SEDA”) to raise £1.3 million (ZAR18 million) and 538 084 ordinary shares of 1 pence each in lieu of cash for corporate advisory fees. These shares were admitted to trading on AIM and the JSE on 17 January 2013.

 

Colin Bird

Chairman

28 March 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the 6 months ended 31 December 2012 Reviewed 

 

Reviewed

 Unaudited  

 Audited  

 Group  

 Group  

 Group  

 6 months  

 6 months  

 12 months  

 31 December 2012  

 31 December 2011  

 30 June 2012  

 £’000  

 £’000  

 £’000  

 Revenue  

 2 126  

 1 316  

 3 725  

 Cost of sales  

 (1 376)  

 (1 102)  

 (3 532)  

 Gross profit  

 750  

 214  

 193  

 Operating costs  

 (4 658)  

 (4 016)  

 (8 911)  

 Loss from operations  

 (3 908)  

 (3 802)  

 (8 718)  

 Other income  

 78  

 –  

 500  

 Operating loss  

 (3 830)  

 (3 802)  

 (8 218)  

 Finance income  

  

 15  

 249  

 Finance costs  

 (145)  

 (187)  

 (583)  

 Loss before taxation  

 (3 972)  

 (3 974)  

 (8 552)  

 Taxation  

 –  

 –  

 672  

 Loss for the period  

 (3 972)  

 (3 974)  

 (7 880)  

 Other comprehensive income  

 – Loss on translation of foreign subsidiaries  

 (2 679)  

 (5 251)  

 (6 844)  

 Total comprehensive loss for the period  

 (6 651)  

 (9 225)  

 (14 724)  

 Loss attributable to:  

 

 Owners of the parent  

 (4 127)  

 (3 348)  

 (6 783)  

 Non-controlling interest  

 155  

 (626)  

 (1 097)  

 (3 972)  

 (3 974)  

 (7 880)  

 Total comprehensive loss attributable to:  

 

 Owners of the parent  

 (6 806)  

 (8 599)  

 (13 627)  

 Non-controlling interest  

 155  

 (626)  

 (1 097)  

 (6 651)  

 (9 225)  

 (14 724)  

 Weighted average number of shares (million)  

 293 785  

 270 269  

 279 147  

 Diluted weighted average number of shares (million)  

 293 785  

 270 269  

 288 922  

 Basic and headline loss per share (pence)  

 (1.40)  

 (1.24)  

 (2.43)  

 Diluted loss and headline loss per share (pence)  

 (1.40)  

 (1.24)  

 (2.43)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 December 2012 

 

 Reviewed  

 Unaudited  

 Audited  

 Group  

 Group  

 Group  

 6 months  

 6 months  

 12 months  

 31 December 2012  

 31 December 2011  

 30 June 2012  

 £’000  

 £’000  

 £’000  

 ASSETS  

 

 Non-current assets  

 

 Property, plant and equipment  

 10 338  

 13 445  

 11 878  

 Intangible assets  

 78 872  

 84 277  

 81 917  

 Deferred tax  

 270  

 519  

 287  

 89 480  

 98 241  

 94 082  

 Current assets  

 

 Inventories  

 –  

 884  

 256  

 Current tax receivable  

 22  

 –  

 22  

 Trade and other receivables  

 1 024  

 1 762  

 1 413  

 Cash and cash equivalents  

 1 046  

 2 315  

 1 063  

 2 092  

 4 961  

 2 754  

 Current tax receivable  

 22  

 –  

 22  

 Trade and other receivables  

 1 024  

 1 762  

 1 413  

 Cash and cash equivalents  

 1 046  

 2 315  

 1 063  

 2 092  

 4 961  

 2 754  

 Total assets  

 91 572  

 103 202  

 96 837  

 EQUITY AND LIABILITIES  

 

 Equity attributable to equity holders of parent  

 Share capital  

 67 151  

 64 582  

 64 425  

 Reserves  

 33 083  

 37 607  

 35 739  

 Accumulated loss  

 (31 687)  

 (24 405)  

 (27 840)  

 68 547  

 77 784  

 72 324  

 Non-controlling interest  

 377  

 1 266

  795  

 68 924  

 79 050  

 73 119  

 LIABILITIES  

 

 Non-current liabilities  

 

 Other financial liabilities  

 803  

 1 690  

 1 164  

 Deferred tax liability  

 17 484  

 18 231  

 17 789  

 18 287  

 19 921  

 18 953  

 Current liabilities  

 

 Loans from related parties  

 971  

 1 455  

 2 164  

 Other financial liabilities  

 1 216  

 –  

 873  

 Trade and other payables  

 1 999  

 2 776  

 1 526  

 Deferred income  

 175  

 –  

 202  

 4 361  

 4 231  

 4 765  

 Total liabilities  

 22 648  

 24 152  

 23 718  

 Total equity and liabilities  

 91 572  

 103 202  

 96 837  

 Number of shares in issue (million)  

 321 134  

 288 122  

 288 122  

 Net asset value per share (pence)  

 21.46  

 27.44  

 25.38  

 Net tangible asset value per share (pence)  

 (3.10)  

 (1.81)  

 (3.05)  

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

for the 6 months ended 31 December 2012 

 

 

 

 Reviewed  

 Unaudited 

 Audited 

 Group  

 Group 

 Group 

 6 months  

 6 months 

 12 months 

 31 December 2012  

 31 December 2011 

 30 June 2012 

 £’000  

 £’000 

 £’000 

Cash flows from operating activities

Loss for the period before taxation

                       (3 972)

(3 802)

(8 552)

Adjustments for:

Interest received

                                (3)

(15)

(249)

Interest paid

                             145

187

583

Depreciation

                             870

727

1750

Deferred income

                              (14)

                 –  

               –  

Profit on Sale of Property plant and equipment

                              (7)

                 –  

               –  

Share-based payment

                               23

                 –  

(275)

Amortisation of intangibles

                             514

520

1152

Operating loss before working capital changes

                        (2 445)

             (2 383)

      (5 591)

Working capital changes

                          1 119

                  3

        1 233

Decrease/(Increase) in inventory

                             256

(54)

574

Decrease in receivables

                             389

1359

1708

Increase/(decrease) in payables

                             474

(1302)

(1049)

Cash generated by operations

                       (1 326)

        (2 380)

      (4 358)

Interest received

                                  3

                15

           249

Interest paid

                           (145)

           (187)

         

(583)

Net cash from operating activities

                        (1 468)

        (2 552)

      (4 692)

Cash flows from investing activities

Purchase of intangible assets

                          (169)

(899)

(80)

Purchase of property, plant and equipment

                                –  

(663)

(740)

Net cash used in investing activities

                         (169)

        (1 562)

          (820)

Cash flows from financing activities

Issue of shares

                          2 354

4 422

4 422

Issue costs

                                –  

                 –  

(158)

Deferred income

                                –  

                 –  

202

Loans advanced from shareholders

                        (1 193)

                 –  

884

Repayment of other financial liabilities

                               84

                 –  

(1 448)

Net cash generated from financing activities

                          1 245

          4 422

        3 902

Net (decrease)/increase in cash and cash equivalents

                           (392)

             308

      (1 610)

Cash and cash equivalents at beginning of the year

                          1 063

2007

2007

Effects of foreign exchange on cash and cash equivalents

                             374

666

Cash and cash equivalents at the end of the period

                          1 045

          2 315

        1 063

 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

as at 31 December 2012 

 

 

 Total  

 Share-

attributable

 Total  

 based  

 Currency  

 Accumu-

 to equity  

 Non-

 Share  

 Share  

 share  

 Merger  

 payment  

 translation  

 Total  

 lated  

 share-

 controlling  

 Total  

 capital  

 premium  

 capital  

 reserve  

 reserve  

 reserve  

 reserves  

 loss  

 holders  

 interest  

 equity  

 £’000  

 £’000  

 £’000  

 £’000  

 £’000  

 £’000  

 £’000  

 £’000  

 £’000  

 £’000  

 £’000  

 Balance at  

 30 June 2011  

 2 565  

 57 595  

 60 160  

 23 184  

 5 171  

 14 503  

 42 858  

 (21 057)  

 81 961  

 1 892  

 83 853  

 Changes in equity  

 Loss for the period  

 –  

 –  

 –  

 –  

 –  

 –  

 –  

 (6 783)  

 (6 783)  

 (1 097)  

 (7 880)  

 Other comprehensive  

 loss for the period  

 –  

 –  

 –  

 –  

 –  

 (6 844)  

 (6 844)  

 –  

 (6 844)  

 –  

 (6 844)  

 Total comprehensive  

 loss for the period  

 –  

 –  

 –  

 –  

 –  

 (6 844)  

 (6 844)  

 (6 783)  

 (13 627)  

 (1 097)  

 (14 724)  

 Issue of share capital net of  

 share issue expenses  

 316  

 3 948  

 4 264  

 –  

 –  

 –  

 –  

 –  

 4 264  

 –  

 4 264  

 Share-based payment  

 credit  

 –  

 –  

 –  

 –  

 (275)  

 –  

 (275)  

 –  

 (275)  

 –  

 (275)  

 Total changes  

 316  

 3 948  

 4 264  

 –  

 (275)  

 (6 844)  

 (7 119)  

 (6 783)  

 (9 638)  

 (1 097)  

 (10 735)  

 Balance at  

 30 June 2012  

 2 881  

 61 543  

 64 424  

 23 184  

 4 896  

 7 659  

 35 739  

 (27 840)  

 72 323  

 795  

 73 118  

 Changes in equity  

 Loss for the period  

 –  

 –  

 –  

 –  

 –  

 –  

 –  

 (4 127)  

 (4 127)  

 155  

 (3 972)  

 Other comprehensive  

 loss for period  

 –  

 –  

 –  

 –  

 –  

 (2 679)  

 (2 679)  

 –  

 (2 679)  

 –  

 (2 679)  

 Total comprehensive  

 loss for period  

 –  

 –  

 –  

 –  

 –  

 (2 679)  

 (2 679)  

 (4 127)  

 (6 806)  

 155  

 (6 651)  

 Issue of share capital net of  

 share issue expenses  

 330  

 2 397  

 2 727  

 –  

 –  

 –  

 –  

 –  

 2 727  

 –  

 2 727  

 Share-based payment  

 charge  

 –  

 –  

 –  

 –  

 23  

 –  

 23  

 –  

 23  

 –  

 23  

 Surplus on minority  

 buy outs  

 –  

 –  

 –  

 –  

 –  

 –  

 –  

 280  

 280  

 –  

 280  

 Acquisition of non-

 controlling interest  

 –  

 –  

 –  

 –  

 –  

 –  

 –  

 –  

 –  

 (573)  

 (573)  

 Total changes  

 330  

 2 397  

 2 727  

 –  

 23  

 (2 679)  

 (2 656)  

 (3 776)  

 (4 016)  

 (418)  

 (4 194)  

 Balance at  

 31 December 2012  

 3 211  

 63 940  

 67 151  

 23 184  

 4 918  

 4 980  

 33 083  

 (31 687)  

 68 547  

 377  

 68 924  

 

 

 

 

NOTES TO THE REVIEWED CONDENSED INTERIM RESULTS

 

1. Basis of preparation

The Group reviewed condensed interim results for the 6 months ended 31 December 2012 have been prepared using the accounting policies applied by the company in its 30 June 2012 annual report which are in accordance with International Financial Reporting Standards (IFRS and IFRC interpretations) issued by the International Accounting Standards Board (“IASB”) as adopted for use in the EU(“IFRS, including the SAICA financial reporting guides as issued by the Accounting Practices Committee, IAS 34 – Interim Financial Reporting, the Listings Requirements of the JSE Limited, the AIM rules of the London Stock Exchange and the Companies Act 2006 (UK). These condensed consolidated interim financial report does not include all notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2012 and any public announcements by Jubilee Platinum Plc. All monetary information is presented in the presentation currency of the Company being Great British Pound. The Group’s principal accounting policies and assumptions have been applied consistently over the current and prior comparative financial period. The financial information for the year ended 30 June 2012 contained in this interim report does not constitute statutory accounts as defined by section 435 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor’s report on those accounts was unqualified and included a reference to going concern by way of emphasis of matter without qualifying their report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

 

2. Financial review

The Group reported a loss and headline loss for the six months ended 31 December 2012 of £4.127 million (2011: loss and headline loss of £3.348 million). This is divided by the weighted average number of ordinary shares in issue of 293 785 million (2011: 270 270 million) resulting in a basic loss and headline loss per share of 1.40 pence (2011: basic loss and headline loss of 1.24 pence). As no options were granted during the period under review (2011: nil) there is no dilution effect on the loss for the period. The Group reported a net asset value of 21.46 (2011: 27.44) pence per share and a net negative tangible asset value per share of 3.1 (2011: 1.8) pence per share. The total shares in issue as at 31 December 2012 were 321 134 million (2011: 288 122 million). Other comprehensive income only comprises foreign currency translation differences which can be

reclassified to profit and loss in future.

 

3. Auditor’s review opinion

These reviewed condensed interim results have been reviewed by the Group’s auditors, BDO South Africa Inc. and their review report is available for inspection at the Company’s registered office.

 

4. Other financial liabilities

Included in other financial liabilities is an amount of £565 000 relating to an increase in Jubilee’s investment in PowerAlt through the issue of new Jubilee shares post the reporting period. Refer to note 13.1 for details of the increased investment.

 

5. Commitments and contingencies

There are no material contingent assets or liabilities as at 31 December 2012.

 

Total operating lease commitments at 31 December 2012:

 

 

 6 months ended  

 6 months ended  

 Year ended  

 31 December  

 31 December  

 30 June  

 2012  

 2011  

 2012  

 £’000  

 £’000  

 £’000  

 Less than one year

102

22

78

Longer than one year 

 – 

48

102

 Total  

 102  

 70  

 180  

 

 

6. Dividends

No dividends were declared during the period under review (2011: nil).

 

7. Board

No changes were made to the Board of Directors during the period under review.

 

8. Reconciliation of heading earnings

There are no reconciling items between earnings and headline earnings.

 

9. Business segments

In the opinion of the Directors, the operations of the Group companies comprise six 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”);

• the development of Platinum Group Elements (PGEs) and associated metals (“PGE development”) in South Africa;

• Base Metal Smelting in South Africa; and

• Electricity Generation in South Africa.

• 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.

 

Segment report for the 6 months ended 31 December 2012

 

 South Africa  

 Evaluation  

 Australia  

 South Africa  

 South Africa  

 South Africa  

 and  

 Nickel  

 PGE  

 Corporate  

 Base Metal  

 Electricity  

£’000  

Development

 Tailings  

 Development  

 (Unallocated)  

 Smelting  

 Generation  

 Total  

 Total revenues  

 324  

 –  

 –  

 40  

 2 761  

 1 188  

 4 313  

 Less: Inter-company revenue  

 –  

 –  

 –  

 –  

 (1 054)  

 (1 133)  

 (2 187)  

 Revenue from external customers  

 324  

 –  

 –  

 40  

 1 707  

 55  

 2 126  

 Loss before taxation  

 (1 939)  

 (95)  

 (1 410)  

 (865)  

 (2 623)  

 (303)  

 (7 235)  

 Taxation  

 –  

 –  

 –  

 –  

 –  

 –  

 –  

 Loss after taxation  

 (1 939)  

 (95)  

 (1 410)  

 (865)  

 (2 623)  

 (303)  

 (7 235)  

 Interest received  

  

 –  

 –  

  

 –  

 –  

  

 Interest paid  

 –  

 –  

 –  

 (26)  

 (1)  

 (118)  

 (145)  

 Depreciation and amortisation  

 (519)  

 –  

 (4)  

 –  

 (675)  

 (186)  

 (1 384)  

 Total assets  

 15 847  

 8 696  

 39 871  

 2 574  

 17 501  

 7 083  

 91 572  

 Total liabilities  

 (864)  

 –  

 (56)  

 (3 053)  

 (14 603)  

 (4 072)  

 (22 648)  

 

 

 

Segment report for the 6 months ended 31 December 2011 

 

 

 South Africa 

 Evaluation 

 Australia 

 South Africa 

 South Africa 

 South Africa 

 and 

 Nickel 

 PGE 

 Corporate 

 Base Metal 

 Electricity 

 £’000 

 Development 

 Tailings 

 Development 

 (Unallocated) 

 Smelting 

 Generation 

 Total 

 Total revenues 

 – 

 – 

 – 

 – 

 2 263 

 1 181 

 3 444 

 Intercompany revenue 

 – 

 – 

 – 

 – 

 (947) 

 (1 181) 

 (2 128) 

 Revenue from external customers 

 – 

 – 

 – 

 – 

 1 316 

 – 

 1 316 

 (Loss)/profit before taxation 

 (690) 

 (54) 

 (143) 

 (805) 

 (2 772) 

 490 

 (3 974) 

 Taxation 

 – 

 – 

 – 

 – 

 – 

 – 

 – 

 (Loss)/profit after taxation 

 (690) 

 (54) 

 (143) 

 (805) 

 (2 772) 

 490 

 (3 974) 

 Interest received 

 10 

 – 

 – 

 

 – 

 – 

 15 

 Interest paid 

 – 

 – 

 – 

 10 

 – 

 177 

 187 

 Depreciation and amortisation 

 525 

 – 

 

 

 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) 

 

 

Segment report for the year ended 30 June 2012 

 

 South Africa 

 Evaluation 

 Australia 

 South Africa 

 South Africa 

 South Africa 

 and 

 Nickel 

 PGE 

 Corporate 

 Base Metal 

 Electricity 

 £’000 

 Development 

 Tailings 

 Development 

 (Unallocated) 

 Smelting 

 Generation 

 Total 

 Total revenues 

 – 

 – 

 604 

 – 

 5 369 

 2 397 

 8 370 

 Inter-company revenue 

 – 

 – 

 – 

 – 

 (2 248) 

 (2 397) 

 (4 645) 

 Revenue from external customers 

 – 

 – 

 604 

 – 

 3 121 

 – 

 3 725 

 (Loss)/profit before taxation 

 (3 712) 

 66 

 (4 714) 

 (1 524) 

 (6 702) 

 1 190 

 (15 396) 

 Taxation 

 (6) 

 – 

 – 

 – 

 884 

 (206) 

 672 

 (Loss)/profit after taxation 

 (3 718) 

 66 

 (4 714) 

 (1 524) 

 (5 818) 

 984 

 (14 724) 

 Interest received 

 – 

 – 

 10 

 

 – 

 231 

 249 

 Interest paid 

 – 

 – 

 – 

 – 

 (243) 

 (340) 

 (583) 

 Depreciation and amortisation 

 (10) 

 – 

 (1 163) 

 (1) 

 (1 250) 

 (539) 

 (2 963) 

 Non-current asset additions 

 – 

 – 

 80 

 – 

 740 

 – 

 820 

 Total assets 

 50 438 

 9 074 

 19 724 

 1 556 

 11 361 

 4 396 

 96 549 

 Total liabilities 

 (48) 

 (12) 

 (299) 

 (98) 

 (17 555) 

 (5 419) 

 (23 431) 

 

10. Shares issued

The Company issued the following shares during the period and up to the date of this announcement:

– on 19 October 2012, 25 098 405 ordinary shares at an average price of 9.10 pence per share in terms of a placing of its shares;

– on 14 December 2012, 7 913 799 ordinary shares at 7.25 pence per share in terms of a general issue of shares for cash;

– on 18 January 2013, 15 757 576 ordinary shares at 9.00 pence per share in terms of a general issue of shares for cash;

– on 18 January 2013, 538 805 ordinary shares at 9.00 pence per share to settle advisory fees;

– on 29 January 2013, 7 679 730 ordinary shares at 8.05 pence per share in terms of a placing of its shares; and

– on 27 February 2013, 1 194 455 ordinary shares at 7.86 pence per share in terms of a placing of its shares.

 

11. Going concern

The directors have adopted the going-concern basis in preparing the financial statements. An emphasis was placed on the capability of the Company to continue as a going-concern in the 2012 annual results. This emphasis arose at a particular time within the implementation of the Company’s stated business plan of establishing an operational Mine-to-Metal platinum company. The implementation strategy of the business plan has been clearly stated and focuses on establishing an operational smelter and refining entity with secured low cost power that will be migrated off tolling contracts onto the Company’s self-produced platinum containing material. The Company will secure its own platinum material by initially focusing on surface and shallow near surface material before targeting more traditional platinum mining.

This will enable the Company to continuously grow its earnings capability in the short term while requiring only modest capital investment. The Company has progressed significantly with the implementation of its business plan during the period under review which has continued post the period under review, achieving the following key milestones:

– The Company continued with the ramp-up of the newly commissioned ARC furnace to achieve targeted throughput in the third quarter of 2012 which is reflected in the growth of both the revenue and gross profit margin achieved by the smelter operation;

– The Company secured the rights to recover platinum group-elements (PGEs) from an estimated 800.000 tonnes of PGE-bearing chromite tailings (“Tailings”) and from current arisings on the Dilokong Chromite Mine in the Eastern Bushveld of South Africa;

– The Company’s subsidiary Pollux formalised a binding and exclusive memorandum of understanding with Phokathaba to toll process the Tailings in its nearby Smokey Hills mine concentrator. This arrangement has accelerated the timeline for production from the Tailings by an estimated 18 months and eliminated the capital investment for a new concentrator;

– The Company entered into a private power purchase agreement with the national energy provider of South Africa for the sale of 5.1MW of power and commenced delivery of power on 23 December 2012. This has the effect of increasing both the Company’s revenue generation and improving the profitability of the smelter operation as the cost of power used by the smelters are offset against the sale of private power;

– In January 2013 the Company entered into an extension to the private power purchase agreement allowing the sale of up to 10.1MW of power to the national energy provider of South Africa. The contract is valued at approximately ZAR98 million (£7.3 million) per annum. The Company is required to upgrade its power infrastructure to deliver on the increased power estimated at a cost of approximately ZAR5.1 million (£0.38 million); and

– On 25 February 2013 the directors announced that the Company had entered into an implementation deed and supporting transactional documents with PLA relating to the acquisition of PLA by the Company. This confirms the last remaining component for the Company to build a fully integrated Mine-to-Metal platinum company.

The Company also secured the continued support from a SEDA backed financing facility during the period under review to ensure that it has access to the required funding to implement the stated business plan in the short term. The directors of the Company are of the opinion that the Company’s business plan has been embedded sufficiently during the period under review and the period to date to enable the Company to continue with its operations as a going concern.

 

12. Events subsequent to reporting date

12.1 Acquisition of the entire issued capital of Platinum Australia Limited

A proposed transaction to merge the assets held by PLA with those held by Jubilee (“Enlarged Group”) brings together a set of complementary assets that achieves Jubilee’s set strategy of forming a fully integrated Mine-to-Metal company that is funded to bring the operational mine back into full production. The transaction is opportunistic in nature and made available by the prevailing platinum market during the start-up and operation of PLA’s Smokey Hills mine. It is the view of the Jubilee Board that the fundamentals underpinning the current platinum markets have improved significantly since the commissioning of the Smokey Hills mine driven primarily by the reduction in forecasted world-wide platinum production and the continued recovery and growth in new car sales from the United States and China.

 

The proposed transaction also affords Jubilee the opportunity to acquire ownership of a fully operational platinum mine and processing plant supported by a shallow platinum-bearing UG2 reef. The mine’s location in the Eastern Bushveld Igneous Complex of South Africa’s platinum region offers significant potential for both extending the existing mine life by partnering with bordering mining companies as well as processing of third-party material.

 

The Company’s pipeline of platinum projects combines both short-term, shallow assets in Kalplats and Rooderand with the worldclass large Tjate platinum asset. This enables the Company to react in-line with the improving platinum markets by focusing initially on the exploitation of the smaller shallow resources, requiring relatively smaller capital to bring the projects into production while continuing with the feasibility study of the cornerstone Tjate project for the longer term.

 

The proposed structure for the transaction to form the Enlarged Group ensures that the Company is funded to resume production at its Smokey Hills mine. The mine ramp-up is expected to achieve full production within the first eight months of operation which enables the Company to continue investment into its project pipeline from self-generated funds.

 

The transaction will propel Jubilee into a fully integrated, operational platinum mining company underpinned by Jubilee’s current asset portfolio and complemented by the near-term shallow platinum projects currently held by Platinum Australia, offering both short-term and long-term growth of the current operations.

 

Jubilee’s three core business focus areas and asset classes are each significantly enhanced by the proposed transaction:

1. Exploration – World-class Tjate platinum project – Attributable 16Moz 6PGE*+Au (SAMREC Code), first mine and attributable 44Moz 6PGE+Au targeted over total area** (*Platinum Group Elements **before geological losses)

2. Processing – PGM processing rights of Dilokong Chrome mine (DCM). Estimated to be 800.000 tons of platinum-bearing surface material. The DCM operation is adjacent to Platinum Australia’s Smokey Hills mining and processing operation. The project requires a processing plant to upgrade the platinum in the DCM material prior to smelting the platinum concentrate.

3. Smelting and Refining – Middelburg Smelting operation (Jubilee Smelting and Refining) (“JSR”). JSR currently operates as a toll smelting operation with its newly commissioned furnace fully contracted. Jubilee’s strategy is to migrate the new furnace from smelting ferroalloy material to smelting platinum concentrates in the near term. The smelter process is underpinned by the ConRoast process to which Jubilee holds the exclusive rights.

 

The Platinum Australia asset classes:

 

1. Exploration – Two shallow platinum-based projects. Each based on open pit mining projects;

i. Shallow Kalplats platinum project – 6.7Mozs 3E* (*3E – Platinum, Palladium and Gold) project starting at surface with a projected maximum depth of 350 metres with a concluded feasibility study; and

ii. Shallow Rooderand Project – 4.5Mozs 4E* project starting at surface with projected maximum depth of 500 metres with a concluded drill programme and feasibility report being drafted.

 

2. Mining – Smokey Hills mining operation, bordering the Dilokong Chrome Mine and nearby Tjate exploration project. Targeted to produce 60.000 ozs 4E* per annum (*4E – Platinum, Palladium, Rhodium and Gold). The operation holds a design capacity of 720.000 tons per annum and was commissioned in 2009. The operation reached design capacity in October 2009 on open pit material. The total project capital invested was ZAR678 million (£50 million at approximated exchange rate of ZAR13.56 to £1), that was made up of processing plant capital ZAR318 million; mine capital of ZAR271 million (2008/09) and project infrastructure capital (power, water, roads, etc) of ZAR89 million (2008/09).

 

3. Processing – The Smokey Hills operation includes a processing plant designed to process 720.000 tons of material per annum. The plant is suited to process chrome-rich platinum containing tailings material as well as UG2 and Merensky platinum ores. Both Jubilee’s and Platinum Australia’s mining and exploration projects are significantly enhanced by Jubilee’s ability to further beneficiate concentrates from these projects through its smelting and refining ability underpinned by the exclusive ConRoast process. The combination of both large long-term assets with smaller, shallow near-term assets, requiring relatively low capital to bring to operation, ensures that the current operational assets within the enlarged Group are supported by a strong pipeline of assets that are capable of driving the growth in the company in the near term.

 

13. Acquisition of non-controlling interest

13.1 Increased investment in PowerAlt

To increase Jubilee’s exposure to the profitable sales of power by PowerAlt, which in turn increases the Company’s profitability for the coming financial year, the Company entered into a binding memorandum of understanding (“MOU”) with ASTRA Group Holding (Pty) Limited (“ASTRA”), a shareholder in PowerAlt, regarding the purchase of shares in PowerAlt.

 

Under the terms of this MOU the Company will acquire ASTRA’s shareholding in PowerAlt amounting to 19% of the issued share capital, valued at ZAR13.139.000 (£988.000) (“Value”) in three tranches. The value is payable at Jubilee’s sole discretion, in cash or through the issue to ASTRA, of new ordinary shares in Jubilee of equivalent cash value. The transaction will result in the Company owning a 70% interest in PowerAlt.

 

As at 31 December 2012 the Company had a 58.6% interest in PowerAlt.

 

The following shares were issued:

1. In the first tranche, on 15 October 2012, the Company acquired shares from ASTRA, amounting to 7.6% of the issued share capital of PowerAlt, for a consideration of ZAR5.255.600 (£395.000) (40% of value);

2. In the second tranche, on 29 January 2013, the Company acquired shares from ASTRA, amounting to 9.5% of the issued share capital of PowerAlt, for a consideration of ZAR6.569.500 (£470.943) (50% of value); and

3. In the final tranche, 27 February 2013, the Company acquired shares from ASTRA, amounting to 1.9% of the issued share capital of PowerAlt, for a consideration of ZAR1.313.900 (£94.189) (10% of value).

The above issues were effected at an issue price equal to the 30 business days’ volume weighted average price on the Johannesburg Stock Exchange Limited, preceding the two business days before the respective settlement for issuance.

 

PowerAlt was awarded the tender in August 2012 (as announced 8 August 2012) to supply power to South Africa’s national power generating company and commenced sale of electricity in December 2012.

 

13.2 Increased investment in Jubilee Smelting and Refining (Pty) Ltd (“JSR”)

 

On 31 July 2012 Jubilee increased its interest to 100% in it subsidiary JSR, the holding company of its Middelburg Smelting company RST Special Metals (Pty) Ltd via a claim settlement agreement with JSR’s shareholders under the terms of its shareholders’ agreement.

 

14. 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 Block 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

 

Andrew Sarosi, Technical Director of Jubilee, who holds a B.Sc. Metallurgy and M.Sc. Engineering, the University of the Witwatersrand and is a member of The Institute of Materials, Minerals and Mining, is a ‘qualified person’ as defined under the AIM Rules for Companies. The technical parts of this announcement have been prepared under Andrew Sarosi’s supervision and he has approved the release of this announcement.

 

 

 

Jubilee Platinum Plc

Colin Bird Tel +44 (0) 20 7584 2155

Leon Coetzer Tel +27 (0)11 465 1913

Andrew Sarosi Tel +44 (0) 1752 221937

 

finnCap Ltd (Nomad)

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 (JSE sponsor)

Leonard Eiser/Sharon Owens Tel +27 (0) 11 809 7500

 

Bishopsgate Communications Ltd

Nick Rome/Anna Michniewicz/Ivana Petkova Tel +44 (0) 20 7562 3350